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Swedish CSR Made in Taiwan - A case study of cross-cultural management
within IKEA and Scania
Authors: Frida Magnusson International Business Kristoffer Pettersson International Business
Tutor:
Petter Boye
Examiner: Hans Jansson
Subject: International Business
Level and semester: Master Thesis Spring 2012
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ACKNOWLEDGEMENTS
In the process of writing this thesis many people have contributed to its establishment.
We are very grateful for the inspiration and support we have received, and would like to
express our appreciation to the following:
First and foremost, we would like to thank our supervisor, Petter Boye, for his
assistance, constructive criticism, and intellectual advise throughout the process of the
research. This is the second time Petter Boye is our supervisor, and we are sincerely
grateful for the feedback he has provided.
Further, we also want to thank our interview respondents for sharing their experiences
and for devoting their time to participate in our research. We are truly appreciative for
the honesty and openness they showed in the interviews.
Finally, we want to thank our peers who during three seminars gave us relevant
feedback, which contributed to make this thesis to what it is today. Last but not least,
we want to acknowledge the following people for their help and inspiration: Joachim
Erlandsen, William Graham, and Louise Byström.
Taipei, 24th of May 2012
Frida Magnusson Kristoffer Pettersson
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ABSTRACT
The purpose of this thesis is to analyze, describe, and explain how Swedish managers
engage their Taiwanese employees in the organization’s CSR. In order to reach the
intention of the thesis, a qualitative case study has been conducted, which involved
personal interviews with respondents at IKEA and Scania in Taiwan.
The theoretical framework comprehends theories concerning CSR, culture, and
communication, which are all relevant to contribute to the analysis, in order to answer
the research questions. The empirical findings contain the interview respondents’ view
on the firms’ CSR activities, how they perceive and manage cultural differences, and
how they communicate CSR to their Taiwanese employees.
In the analysis a theoretical synthesis is applied in order to analyze the empirical
findings. Our analysis demonstrates that both case firms take economic, legal, and
ethical responsibilities, while only one firm pursues philanthropic responsibilities.
Further, our analysis reveals that there are several cultural differences and
communicational barriers to overcome, when engaging employees in CSR.
The conclusion of the thesis shows that Swedish managers actively try to engage their
Taiwanese employees in CSR by continuously communicating their perception of the
firm’s social responsibilities. Moreover, combining CSR that is embraced by Asian
culture with managerial efforts to increase employee participation, result in effective
CSR practices in Taiwan.
Keywords: Cross-‐cultural leadership, CSR, Taiwan, Sweden, Carroll’s CSR pyramid,
Hofstede model, High-‐ and low-‐context communication.
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TABLE OF CONTENT
1 INTRODUCTION 1
1.1 CORPORATE SOCIAL RESPONSIBILITY 1 1.2 EMPLOYEE ENGAGEMENT 2 1.3 CROSS-‐CULTURAL LEADERSHIP 3 1.4 PROBLEM DISCUSSION 4 1.5 RESEARCH QUESTIONS 4 1.6 PURPOSE 5 1.7 DISPOSITION OF THE THESIS 6
2 METHODOLOGY 7
2.1 CHOICE OF SUBJECT 7 2.2 RESEARCH APPROACH 8 2.3 RESEARCH METHOD 9 2.3.1 RESEARCHERS’ FRAME OF REFERENCE 9 2.4 LITERATURE REVIEW 10 2.5 RESEARCH STRATEGY 10 2.5.1 RESEARCH DESIGN 11 2.5.2 SELECTION PROCESS OF CASES 12 2.6 DATA COLLECTION METHODS 13 2.6.1 INTERVIEWS 13 2.6.2 OBSERVATIONS 14 2.6.3 DOCUMENTATION 14 2.7 ACCESS TO THE COMPANIES 14 2.8 RESEARCH QUALITY 15 2.8.1 CREDIBILITY 15 2.8.2 CONSISTENCY 16 2.8.3 TRANSFERABILITY 17
3 THEORETICAL FRAMEWORK 19
3.1 CORPORATE SOCIAL RESPONSIBILITY 19 3.1.1 CARROLL’S CSR PYRAMID 19 3.1.2 CSR IN ASIA 21 3.2 CULTURE 22 3.2.1 THE HOFSTEDE MODEL 22
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3.2.2 THE CHINESE BUSINESS CULTURE 27 3.2.3 LEADERSHIP STYLES IN DIFFERENT CULTURES 27 3.3 COMMUNICATION 29 3.3.1 HIGH-‐ AND LOW-‐CONTEXT COMMUNICATION 29 3.3.2 COMMUNICATING CSR TO EMPLOYEES 32 3.4 THEORETICAL SYNTHESIS 32
4 EMPIRICAL FINDINGS 35
4.1 IKEA 35 4.1.1 CSR IN TAIWAN 36 4.1.2 CULTURE AND LEADERSHIP 38 4.1.3 EMPLOYEE COMMUNICATION 40 4.2 SCANIA 41 4.2.1 CSR IN TAIWAN 42 4.2.2 CULTURE AND LEADERSHIP 43 4.2.3 EMPLOYEE COMMUNICATION 44
5 ANALYSIS 47
5.1 CSR IN TAIWAN 47 5.1.1 SUMMARY 49 5.2 CULTURE AND LEADERSHIP 50 5.2.1 SUMMARY 54 5.3 EMPLOYEE COMMUNICATION 54 5.3.1 SUMMARY 56
6 CONCLUSIONS 57
6.1 ANSWERS TO THE RESEARCH QUESTIONS 57 6.2 LIMITATIONS OF THE RESEARCH 59 6.3 APPLICABILITY OF THE FINDINGS 60 6.4 SUGGESTIONS FOR FURTHER RESEARCH 60
7 BIBLIOGRAPHY 61
Attachment 1: Interview Guide (Swedish)
Attachment 2: Interview Guide (English)
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LIST OF FIGURES AND TABLES FIGURES Figure 2.1 Bachelor-‐ and Master theses. 8
Figure 2.1 Basic types of designs for case studies. 11
Figure 3.1 The CSR pyramid. 20
Figure 3.2 Comparison of Sweden and Taiwan. 26
Figure 3.3 Regions on the continuum of low-‐ and high-‐context. 31
Figure 3.4 Theoretical synthesis. 34
TABLES Table 1.1 Disposition of the Thesis 6
Table 3.1 The dimensional values of Sweden and Taiwan. 25
INTRODUCTION
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1 INTRODUCTION
This chapter will introduce the topic of the thesis, followed by a discussion of the
research problem. Thereafter, the research questions and the purpose of the thesis
will be stated. Last, in order to provide an overview of what the thesis will cover, a
disposition of the thesis is presented.
1.1 Corporate Social Responsibility
According to Edwards et al. (2007), the process of globalization has resulted in
raised concerns that multinational corporations (MNCs) might pursue profit at
the expense of vulnerable workforce or the environment. In response to such
concerns, MNCs are increasingly taking steps to show their social responsibility
as a business organization and one development has been the elaboration and
implementation of Corporate Social Responsibility (CSR) codes and programmes
(Collier & Esteban, 2007; Edwards et al., 2007). The Commission of the European
Communities defines CSR as followed:
“A concept whereby companies integrate social and environmental concerns in
their business operations and in their interaction with their stakeholders on a
voluntary basis.” (Prieto-‐Carrón et al., 2006, p. 978)
Several authors argue that CSR to a large extent is undertaken by organizations
characterized by high risk and valuable reputations, and with a direct connection
to the consumer market (Pollach et al., 2012; Borglund et al., 2009; Grafström et
al., 2008; Trebeck, 2008). Borglund et al. (2009) and Grafström et al. (2008)
further claim that the most effective CSR policies are those with strong
connections to the organizations core operations and values.
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One of the purposes of the CSR codes is to guide employees’ behavior in
accordance with the image of the firm (Edwards et al., 2007). This is the
principal way for MNCs to achieve consistency across borders and operations.
However, Von Weltzien Hoivik (2007) argues that the value concepts in Western
firms’ codes of ethics do not necessarily work in other cultures, mainly because
the values stated rest on deeply rooted cultural characteristics and Western
concepts of duty. Therefore, these concepts may not work in Asian cultures that
are predominately relationship-‐oriented.
Based on the statement that Swedish companies are regarded as global leaders
when it comes to advanced CSR policies (Grafström et al. 2008), one could
assume that Swedish firms have plenty to share concerning CSR activities both at
home and abroad.
1.2 Employee Engagement
Employees are the people that deliver the firms' end objectives, wherefore their
investment and understanding in CSR are of importance (Walton & Rawlins,
2011; Munslow, 2010; Simmons, 2008). Collier and Esteban (2007) argue that it
is the employees who carry most of the burden regarding the responsibility of
implementing the ethical behavior of the company throughout their daily work.
Achieving the desired outcomes will therefore mainly depend on employee
willingness to collaborate (Morsing et al., 2008; Collier & Esteban, 2007).
According to Munslow (2010) such involvement cannot be realized through
newsletters or intranet, but effective employee engagement in activities must be
in place within the organization to ensure that the staff not only understands the
purpose of CSR, but also what it requires of them. Walton and Rawlins (2011)
explain that when employees believe that they can act as ambassadors for their
firm’s CSR efforts their commitment and conviction spread. The issue of
employee engagement becomes even more significant in companies that operate
in several markets where it is a necessity that the employees’ values and visions
are fully aligned with the organization in order to handle ethically complex
situations effectively (Collier & Esteban, 2007).
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1.3 Cross-‐Cultural Leadership
The world is increasingly becoming more and more interconnected; hence an
even further progressive globalization of companies and organizations is
occurring (Javidan & House, 2001). This opens up many opportunities, but also
complex challenges for businesses becoming transnational. Cultural interactions
have been stated as problems, with leadership efforts as solutions (Holmberg &
Åkerblom, 2006; Javidan & House, 2001). Traditionally, leaders were valued for
their consistency, but due to globalization today’s leaders are valued for seeking,
valuing, and leveraging different perspectives and invite dissent (Bindra, 2012).
Javidan and House (2001) further argue that due to complex challenges the most
important factor for business success is competent global leaders whom are
flexible and respond positively and effectively to practices and values that are
different from what they are familiar to. Newman and Nollen (1996) explain, that
management practices that reinforce national culture are more likely to yield
predictable behavior, self-‐efficiency, and high performance, since consistent
management practices are coherent with behavioral expectations and routines
that surpass the workplace. Moreover, global leaders need to understand the
importance of creating cross-‐cultural trust and understanding in their company
(Boot, 2011), and also realize that good staff communication is essential to
business success (Javidan & House, 2001; http://www.inc.com). Furthermore,
communication is the essential tool for managing people (Kurpritz & Cowell,
2011) and building trust (Thomas et al., 2009).
In the following statement Percy Barnevik, the former CEO of ABB, presented his
view on the characteristics of a global manager.
“Global managers have exceptionally open minds. They respect how different
countries do things, and they have the imagination to appreciate why they do them
that way. ” (Javidan & House, 2001, p. 292)
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1.4 Problem Discussion
The research on CSR communication has mainly focused on external
communication (Uusi-‐Rauva & Nurkka, 2010; Nielsen & Thomsen, 2009), with
the main approach being quantitative content analysis (Nielsen & Thomsen,
2009). Pollach et al. (2012) agree, and add that there is an absence of empirical
research on the relationship between internal communication and CSR.
Furthermore, Dhanesh (2012) claims that employees have received hardly any
research focus within this field of research. Despite the vast interest in the
concept of CSR, we find that there are still many unanswered questions,
especially concerning internal communication of CSR, within organizations
across countries.
Chong and Thomas (1997) explain that cultural differences between the leader
and the follower may result in communication difficulties, which can reduce
effectiveness and potentially cause conflict; yet, Silberg (2012) argue that
managers are a crucial part of making the firm’s CSR efforts understood among
the employees. Moreover, Tanova and Nadiri (2009) explain that differences in
communication styles are especially apparent when comparing people from
Scandinavia and Asia. The increasing presence of Swedish companies in Asia and
the importance of the market (handelskammaren.se) make it significant to study
problems that these firms encounter. Moreover, CSR, being a highly essential
part of numerous Swedish MNCs’ operations (Grafström et al. 2008), contributes
to stressing the importance of this field of research.
The topics of CSR, culture, and communication have been widely researched
independently, but it was the interconnection that raised our curiosity.
Accordingly, this thesis seeks to enrich this relatively unexplored part in the
research on CSR, in order to make a contribution to the literature.
1.5 Research Questions
Primary research question
How do Swedish managers in Taiwanese subsidiaries engage employees in CSR?
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Secondary research questions
We believe that in order to answer our primary research question we first need
to answer the following sub questions:
With the first sub question we aim to describe to what extent the case firms take
social responsibility in Taiwan, in order to gain further understanding of what
kind of CSR the companies engage their employees in.
In the second sub question we intend to gain knowledge of how Swedish leaders
manage the cultural differences in the Taiwanese subsidiaries, in order to be
effective leaders.
With the third sub question we aim to answer how Swedish managers
communicate the firms’ social responsibilities to their Taiwanese employees.
1.6 Purpose
The purpose of this thesis is to:
§ Analyze and explain how Swedish managers perceive and manage cultural
differences in their Taiwanese subsidiaries, and how they communicate
CSR with their Taiwanese employees, in order to engage them in their
CSR practices.
§ Provide knowledge and inspiration on how companies more effectively can
engage their oversea employees in their CSR practices.
To what extent do Swedish firms take social responsibility in Taiwan?
How do Swedish managers perceive and manage cultural differences in their Taiwanese
subsidiaries?
How do Swedish leaders manage the communication regarding CSR in relation to their
Taiwanese employees?
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§ Increase knowledge dispersion that could result in more effective CSR,
which would not only be valuable for the company, but for society as a
whole.
1.7 Disposition of the Thesis
Table 1.1 Disposition of the thesis
Chapter 1 Introduction
Introduces the readers to the topic of the thesis, to why there is a need for this research, and the purpose of the study.
Chapter 2 Methodology
Explains the methods applied, how the literature was selected, the access to the firms, and how the data was collected. Lastly, the quality of the thesis is discussed.
Chapter 3 Theoretical Framework
Presents theories concerning CSR, culture, and communication, which are the core concepts of the thesis. The chapter concludes with a theoretical synthesis, which describes how the theories will be applied in the analysis.
Chapter 4 Empirical Findings
Provides the data collected through the interviews with the Swedish managers.
Chapter 5 Analysis
In this chapter, the empirical findings are analyzed using the theoretical synthesis presented in chapter three.
Chapter 6 Conclusions
In the last chapter the research questions are answered, based on the analysis in the previous chapter. Last, the limitations of the thesis, its applicability, and suggestions for further research will be presented.
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2 METHODOLOGY
In this chapter the methodology of the thesis will be presented. We will explain the
choice of subject, followed by the various methods applied. Thereafter we will
present the case firms, data collection procedures, account for our access to the
firms, and end with stating the quality of the research.
2.1 Choice of Subject
The choice of subject for this thesis came natural to us since we both strive to
work in Asia in the future, and believe that the knowledge obtained from this
research will enable us to become better employees with a broader
understanding of people from different cultural backgrounds. Both of us have
experienced cultural clashes in our travels around the world and as exchange
students in North America, Asia and Australia, and we are certain that we will
experience several more in our careers. This has awakened a curiosity of how
such cultural clashes are dealt with within business organizations, and since our
present location is Taiwan, the research will be conducted there.
During the research for our Bachelor thesis (Swedish CSR with Chinese
Characteristics – A case study of four Swedish firms’ CSR engagement in their
Chinese supply chains) we found that all our respondents experienced severe
difficulties when managing their Chinese supplier relations regarding CSR
(Magnusson & Pettersson, 2011). We concluded that one of the issues in this
matter concerned the level of involvement, which in the Chinese case firms were
considered as too low in order to fully implement the intended CSR activities.
These statements and conclusions resulted in personal curiosity for how
Swedish leaders in Asia manage their relationship with the firms’ employees,
who they have a closer relationship to, and especially concerning the aspect of
CSR and how it is communicated.
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Figure 2.1 Bachelor-‐ and Master theses.
2.2 Research Approach
In the early beginning of this thesis we had a few theories we knew would
contribute to the analysis, but we were also aware of that after the interviews
were completed, we would need new insights and theories in order to make a
complete analysis. Therefore, neither the deductive nor the inductive approach
was chosen, instead we decided to use the abductive research approach. Dubois
and Gadde (2002) define this approach as systematic combining and a constant
movement between the theoretical framework and the empirical findings. Using
an abductive research approach enabled us to constantly move between the two,
and assisted us to gain insights both from theory and reality during the process.
We began our research by searching for articles focusing on cross-‐cultural
context, and found three main areas of theories, those being CSR, culture, and
communication. When the interviews were conducted we needed to find more
theories within these areas to complete the theoretical framework. Therefore,
Supply chain management
Internal CSR management
How do Swedish firms implement CSR in their Chinese supply
chains?
How do Swedish managers in Taiwanese
subsidiaries engage employees in CSR?
Corporate Social
Responsibility
Bachelor Thesis Master Thesis
Swedish firms in Asia
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we believe that the abductive approach served as an inspiration during the
research process.
2.3 Research Method
Lauring and Thomsen (2010) claim that in order to investigate the ambiguous,
debatable and disputed concept of CSR, researchers need to apply a fairly
sensitive data collection tool, which the qualitative research method provides.
This method facilitates a deeper understanding of the phenomenon studied
compared to a quantitative research method (Merriam, 2009). A qualitative
method is more concerned with “how” and “why”, rather than with “how much”
or “how many”. It is also a method concerned with how people interpret what
they experience (Merriam, 2009), which is the most important aspect of our
research.
2.3.1 Researchers’ frame of reference
When conducting a qualitative research it is impossible for the authors to be
completely objective (Gummesson, 2007). Subjectivity is ever-‐present in
everything we do and impossible to avoid. Therefore, we find it important to
state our frame of reference in this field of research. Both of the authors have
studied four years of international business in mainly Sweden and Taiwan. We
have studied in multi-‐cultural environments, and worked in companies with
people belonging to different cultural backgrounds. Moreover, we have
completed a few courses in leadership, the most recent relating to cross-‐cultural
leadership. We have prior experience regarding conducting research on CSR
(“Swedish CSR with Chinese Characteristics – a case study of four Swedish firms’
CSR engagement in their Chinese supply chains”). Before writing the Bachelor
Thesis mentioned above, we completed a course in CSR in order to obtain more
insight into the concept. Further, we find it important to clarify that we are
biased about firms’ implementation of CSR, and consider it to be of great
importance especially in emerging economies. However, during the interviews
we did not state any of this information, and we acted objective in order to
collect the interview respondents own view of the phenomenon studied.
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2.4 Literature Review
Researchers who do not review previous literature on the subject may miss an
opportunity to make a contribution to their field of research (Merriam, 2009).
The author (2009) further explains that conducting a literature review will
create an overview of the topic with the intention to identify major studies and
theories that can contribute to the researchers’ knowledge domains. Therefore,
in the initial stage of our research we studied articles and theses written on the
subjects of interest, in order to find a gap in the research area. We found that
there is a lack of research related to how companies communicate CSR
internally, in cross-‐cultural contexts. Proceeding from there, we used key words
such as: CSR, cross-‐cultural, communication, culture, leadership, Taiwan,
Sweden, and Asia, in order to create the introduction and theoretical framework
of this thesis. We selected scientific journals and literature relevant to the topic,
and did so by using valid sources and selecting theories widely accepted by other
researchers.
2.5 Research Strategy
Yin (2009) presents five different strategies for conducting a research, those are;
archival analysis, experiments, surveys, history, and case studies. In order to
choose between the five strategies the research question acts as a key
differentiator. Case studies are preferably based on “how” and “why” questions
that describes a present circumstance (Merriam, 2009; Yin, 2009), which CSR in
Taiwan is. Further, case studies are in-‐depth descriptions and analysis of various
cases, and qualitative case studies are characterized as being particularistic and
descriptive (Merriam, 2009). According to Schell (1992), the case study is the
most flexible of all research strategies, which in turn allowed us to retain the
holistic characteristics of the real life events investigated. According to
Gummesson (2007) case studies contain an interaction between the researchers,
the object of study, and its actors, and Yin (2009) further emphasizes interviews
and observations to be the main strengths of this research strategy. The case
study strategy enabled us to visit the firms, and use triangulation when collecting
data, which further made an in-‐depth analysis of the two case firms’ internal CSR
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management possible. We therefore received a more holistic view of the
phenomenon studied, and were able to form an interesting conclusion to this
thesis.
The greatest concern with case studies is lack of rigor, mainly depending on the
authors’ subjectivity (Yin, 2009). In order for this thesis to remain credible we
have stated our frame of reference (2.3.1), our applied methods, and followed
structural recommendations given by Yin (2009) and Merriam (2009). Merriam
(2009) further argues that when studying a complex phenomenon, the strengths
of using a case study design are greater than its limitations, since it is the one
strategy that in-‐depth can explain a complex phenomenon.
2.5.1 Research design
Yin (2009) presents four different designs for case studies, which are illustrated
in Figure 2.1. We decided to conduct a holistic multiple-‐case design, since we
wanted to interview more than one company in order to be able to receive a
more generalizable result. Furthermore, evidence collected from multiple cases
is considered more compelling, and the overall study will become more robust
compared to a single-‐case study (Yin, 2009). Additionally, the analytical benefits
from having more than one case are substantial.
Figure 2.2 Basic types of designs for case studies (modified from Yin, 2009).
Single-‐Case Design
Multiple-‐Case Design
Con-‐text
Con-‐text Case
Context Case Case
Holistic
Context Case
Unit
Unit
Embedded Con-‐text
Con-‐text
Case Case
Unit
Unit
Unit
Unit
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2.5.2 Selection process of cases
When deciding upon which companies to include in the research, our main goal
was to find Swedish companies established in Taiwan with a stated CSR policy
on their website. Further, having a Swedish manager and Taiwanese employees
was a necessity in order to find an answer to our research questions. Therefore,
we decided to focus on companies considered large, i.e. more than 250
employees and revenues exceeding €40 million (europa.eu). By using the
Swedish Chamber of Commerce’s and the Swedish Trade Council’s lists of
Swedish companies established in Taiwan (cci.se; swedishtrade.se), we found
firms that matched our criteria.
We approached the companies by telephone and explained the intentions of the
thesis, why they were chosen, and asked whether they were interested in
participating. After this process, the following two companies were willing to
contribute:
IKEA
Founded in 1943 by Ingvar Kamprad, IKEA today employs 131 000 people in 41
countries (ikea.se). In 2011 IKEA maintained stable growth and profitability, and
increased their revenues by 6.9 percent from the year before, to a total of EUR
24,7 billion. IKEA’s business concept focuses on providing their customers with
home furnishing products at low prices. As of the 31st of August 2011 the
company had 287 stores in 26 countries around the world, Taiwan being one of
those countries. Our respondent at IKEA is the CEO of the Taiwan, Hong Kong,
and Indonesia divisions, Mr. Martin Lindström.
Scania
Scania was established in 1900 and is today one of the leading manufacturers of
trucks, industrial-‐ and maritime engines, and buses (scania.se). The firm
operates in approximately 100 countries and the number of employees exceed
35 000. Scania has not experienced any annual losses since 1934, and in 2011
their revenues increased by 12.2 percent from the year before, to a total of USD
87,686 million. An interview was conducted with the manager of the regional
production unit in Taiwan and South Korea.
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2.6 Data Collection Methods
In order to understand how managers engage their Taiwanese employees in CSR
we conducted interviews and observations in the field, and used various
documentations to confirm our findings. These are common tools utilized in a
qualitative research since they offer increased understanding of underlying
aspects and data that might be critical in order to understand the entire concept
(Merriam, 2009). Quotations from the interviews were also collected since those
will contribute to a more descriptive research.
2.6.1 Interviews
The primary source of data collections was interviews conducted by the authors.
According to Merriam (2009), interviews provide the most useful information
when conducting a qualitative research. We decided to conduct semi-‐structured
interviews since this method assumes that the interview respondents define the
phenomenon in unique ways. A semi-‐structured interview requires questions to
be flexibly worded and ordered which allows the interviewer to respond to each
situation at hand (Merriam, 2009). Additionally, interviews were conducted in
Swedish, which reduced the possibility of confusion and misunderstandings
since both the authors and interviewees are of Swedish origin. Moreover, as
recommended by Glaser and Strauss (1967) we made every attempt to begin our
interviews with an open mind. The interviews, which were conducted on the 18th
of May 2012 at the case companies offices, each lasted for approximately one and
a half hours, were digitally recorded, and later reviewed by both respondents.
Moreover, the opportunity to remain anonymous were declared in both cases,
and our respondent at Scania decided that he did not want to have his name
published in the thesis, wherefore the fictitious name of Mr. Andersson is used
instead.
According to Merriam (2009), there are limitations when conducting interviews,
the most prominent being the interviewers’ biases. Therefore, that is discussed
under heading 2.3.1 Researchers’ frame of reference.
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2.6.2 Observations
Observations were used as a complement to the interviews, since combined with
documentation and interviews it allows for holistic interpretations of the
phenomenon studied (Merriam, 2009). Gummesson (2007) states that
observations are under-‐exploited in researches, and further argues that a major
share of communication is non-‐verbal. Yin (2009) further stresses that in order
to enhance the validity of observations there should be more than a single
observer making the observations.
During our visits to Scania and IKEA we identified various non-‐verbal
communication, which will be revealed in the empirical findings.
2.6.3 Documentation
The most important use of documents is to confirm evidence from other sources
(Yin, 2009). Documentation, such as e-‐mails, verifications of case firms’
economic data, and spelling matters have been used to a limited extent, and only
in the selection process of case firms and in order to confirm data from the
interviews.
2.7 Access to the Companies
Access is defined as the opportunities available to find information and empirical
data, and is considered a critical problem when conducting a study (Gummesson,
2000). Through our contact at the Swedish Chamber of Commerce, Mrs. Louise
Byström, we were introduced to the case firms of interest for this research. We
believe this made the interview respondents more comfortable with having us
interviewing them.
Gummesson (2000) emphasizes that the choice of research methods and the
researcher’s competence are of great importance regarding access to companies.
We find that our previous proficiency of writing a thesis abroad has given us the
experience and knowledge on how to conduct a second thesis in a similar
context. We both felt more confident when approaching the companies this time
since we had previous practice.
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2.8 Research Quality
In order to have an effect on the practice or the theory in the field of research,
the thesis need to provide insight and conclusions that sound true to the reader
and other researchers (Merriam, 2009). Our goal throughout the writing of this
thesis has been to contribute with knowledge that is trustworthy and believable.
The quality of this thesis has been tested through credibility, consistency, and
transferability, and it has been achieved through constant concern and attention
to the data that has been collected, analyzed, interpreted, and presented, as
suggested by Merriam (2009) and Yin (2009).
2.8.1 Credibility
The credibility criterion focuses on how research findings match the reality
(Merriam, 2009). In qualitative research, human beings are the primary
instrument of data collection and analysis; hence, interpretations of the reality
are accessed through their interviews and observations. Merriam (2009)
therefore claims qualitative studies to be closer to reality, than if a data
collection tool had been interjected between the researchers and the
participants. Therefore, viewed in this manner, credibility is seen as a strength of
qualitative research. However, we had to acknowledge that qualitative research
could never capture an objective reality. Thus, we have applied five strategies
suggested by Merriam (2009) in order to enhance the credibility of this thesis.
First, two types of triangulation suggested by the author were used in order to
increase the credibility of the study. Those triangulations were multiple methods
and multiple investigators. Regarding the use of multiple methods of data
collection, we have applied interviews, observations, and documentation in
order to be able to crosscheck the accuracy of the data. Investigator triangulation
was also applied since both of the authors participated in collecting and
analyzing the data.
The second strategy to ensure the credibility of the thesis is called respondent
validation (Merriam, 2009). This is a strategy to rule out that the findings and
interpretations made by the researchers are not misinterpreted or
misunderstood. This strategy has been accomplished through feedback from our
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interview respondents after the interviews were transformed into empirical
data.
Adequate engagement in data collection is the third strategy suggested by
Merriam (2009). This implies making sure to receive the right amount of data
needed to reach a truthful conclusion. The data collection process was finished
after reaching a point of saturation, indicating that we came across the same
things over and over again.
The fourth strategy recommended by Merriam (2009) is called researcher’s
position. The author indicates that the researchers have to clarify their biases,
dispositions, experiences, and theoretical orientation regarding the research.
This kind of clarification will enable the readers to better understand how the
researchers might have arrived at the interpretations of the data. This
information is found under the heading 2.3.1 Researchers’ frame of reference.
Finally, as advised by Merriam (2009), we applied a strategy called peer review.
During the process of writing this thesis we have participated in three seminars
where four or more people have read and commented on our thesis. Further, an
experienced advisor was contacted regularly, in order to give us feedback on the
material.
2.8.2 Consistency
Consistency refers to the extent to which research findings can be replicated
(Merriam, 2009). This is considered problematic in qualitative researches since
human behavior is never static; yet, it is conducted in a way that human behavior
cannot be isolated. Therefore, replication of qualitative studies will not yield the
same results, but this does not discredit the result of any qualitative study since
there can be numerous interpretation of the same data. The more important
question in a qualitative research is therefore whether the results are consistent
with the data collected. This can be improved through researcher’s training and
practice concerning data collection, methodologies, and experience. We find that
our previous research gave us the adequate experience, and our four years of
METHODOLOGY
17
university studies have prepared us well for this thesis to be considered
dependable.
2.8.3 Transferability
According to Merriam (2009), transferability indicates to which extent the
findings of a study can be applied to other situations and how generalizable the
results are. We decided to apply extrapolations, which are modest speculations
on the likely applicability of the results to other situations under similar, but not
identical, conditions. Merriam (2009) argues that the general lies in the
particular, indicating that what one learns in a particular situation can be
generalized in similar situations. It is up to the reader to decide whether the
findings of this thesis is applicable to their situations, although, it is the
researchers’ responsibility to provide enough detailed description of the study’s
context to support the readers to compare the fit with their own situations. The
transferability of this thesis is stated under heading 6.3 Applicability of the
findings.
Transferability can be enhanced through thick descriptions, implying highly
descriptive, detailed presentations of the settings and findings of the study
(Merriam, 2009). We have done this by presenting the companies and the
interview respondents, using quotes from the interviews, by carefully and clearly
presenting the data collected, and lastly re-‐reading it several times before final
completion. Another way of enhancing transferability is by carefully selecting the
cases to study. As stated under heading 2.5.2 Selection process of cases, we
deployed several criteria in order to find the ultimate companies to interview.
THEORETICAL FRAMEWORK
19
3 THEORETICAL FRAMEWORK
In the following chapter the theoretical framework of the thesis will be presented.
The framework is divided into four parts, CSR, culture, communication and
theoretical synthesis. Initially, Carroll’s CSR pyramid will be introduced followed by
Hofstede’s model on national cultural characteristics. Thereafter low-‐ and high-‐
context communication will be explained, followed by the theoretical synthesis.
3.1 Corporate Social Responsibility
Faisal (2010) explains that CSR is a wide concept which has resulted in a variety
of definitions based on the extent to which a firm stretches its acceptance of
responsibility beyond its primary role as a an economic institution to include
social duties. A description of CSR was presented in the introduction of the thesis
but a more narrow definition of the subject will be introduced in the next
paragraph.
3.1.1 Carroll’s CSR pyramid
One of the first, and yet the most widely accepted conceptualization of CSR is
defined by Archie Carroll (Dhanesh, 2012; Galbreath, 2009; Qu, 2009), who
states that CSR is a multi-‐dimensional construction, consisting of four types of
firm responsibilities: economic, legal, ethical, and philanthropic (Carroll, 1979).
Carroll (1991) further suggests that these four elements of social responsibilities
compose the total CSR. Together the four dimensions form a pyramid, where the
responsibilities rest upon each other (Figure 3.1). However, the four layers are
not mutually exclusive, but are shown in this way to easier grasp the context. The
total responsibilities of organizations include simultaneous fulfillment to earn
profit, obey the law, be ethical, and be a good corporate citizen.
THEORETICAL FRAMEWORK
20
Figure 3.1 The CSR pyramid (modified from Carroll, 1991).
Historically, business organizations were the basic units of society with a main
purpose to produce goods and services needed by consumers, in order to earn
profit (Trebeck, 2008; Carroll, 1991). The other business responsibilities are
established upon the economic responsibility of the organization, since without
it the other elements become unlikely considerations (Carroll, 1991).
Organizations do not only operate according to the profit motive, but is at the
same time expected to comply with the regulations and laws declared by the
state (Carroll, 1991). Hence, organizations are expected to pursue profit within
the context of the law. The legal elements are the next layer of the CSR pyramid,
but are appropriately comprehended as coexisting with the economic
responsibilities.
The third layer of the CSR pyramid is the ethical responsibilities, which embrace
those practices and activities that are expected or forbidden by the members of
society even though they are not codified into laws (Carroll, 1991). Thus, the
ethical responsibilities embody standards, expectations, or norms that reflect a
concern for what the community, shareholders, employees, and consumers
regard as fair. These values and norms reflect a higher standard than that
required by law, and are often vague in definition. Therefore, they are
considered difficult for organizations to deal with.
Economic Responsibilities
Legal Responsibilities
Ethical Responsibilities
Philanthropic
Responsibilities
THEORETICAL FRAMEWORK
21
Philanthropic responsibilities are in response to society’s expectations that
organizations should be good corporate citizens (Carroll, 1991). Such
responsibilities include engaging in programs to promote human welfare or
goodwill, and making financial contributions to the community. The
philanthropic element is not expected in an ethical or moral sense, but is desired
by the community. However, organizations that do not engage in philanthropic
responsibilities are not considered unethical, and it is merely a voluntary choice
made by the firm (Azmat & Zutshi, 2012; Carroll, 1991).
The most outspoken proponent to this view of organizations’ responsibilities is
the economist Milton Friedman (Carroll, 1991), who argues “The only
responsibility of businesses is to make as much money as possible while conforming
to the basic rules of society, both those embodied into law and those embodied in
ethical custom” (Friedman, 1970). However, Carroll (1991) argues that
Friedman’s statement embrace three components of the CSR pyramid, being
economically, legally, and ethically responsible. Hence, leaving only the
philanthropic responsibilities for Friedman to reject. Nevertheless, Carroll’s
framework of CSR has been utilized by several theorists, empirical researchers,
and numerous businesses (Azmat & Zutshi, 2012; Barnett, 2012; Galbreath,
2009; Qu, 2009; Matten & Moon, 2008; Schwartz & Carroll, 2003).
3.1.2 CSR in Asia
CSR is an ambiguous term lacking a unanimous meaning (Azmat & Zutshi, 2012).
People interpret the term CSR differently based on their culture, and what makes
the term even more difficult to understand is that it is context-‐bound and
influenced by the environment in which an organization operates (Ardichvili et
al., 2012; Azmat & Zutshi, 2012). Hence, the term CSR is not universally shared
around the world (Ardichvili et al., 2012), but is perceived differently to different
people at different places, at different times (Azmat & Zutshi, 2012).
A positive relationship has been reported between countries with high levels of
economic development, and the importance of CSR to consumers in those
countries (Becker-‐Olsen et al., 2011). However, there is an evident movement
THEORETICAL FRAMEWORK
22
towards an increased emphasis on CSR across all markets (Azmat & Zutshi,
2012; Becker-‐Olsen et al., 2011).
One dimension of CSR is commonly implemented in Asia, that being the
philanthropic responsibilities (Azmat & Zutshi, 2012; worldbank.org). This is
mainly due to cultural traditions originating from religions (Azmat & Zutshi,
2012). Furthermore, Asian businesses engaging in philanthropic responsibilities
seldom participate in ethic responsibilities, such as employee training and
development, work place safety, or responsibilities in their supply chain
(worldbank.org). In conclusion, there are several difficulties to implement CSR in
Asian organizations, some of those being the confusion between CSR and
philanthropy, poor definition of CSR, lack of commitment from senior executives,
and lack of support from the local governments.
3.2 Culture
Hofstede (1980, p. 43) defines culture as “the collective mental programming of
the people in an environment”. He further explains that culture is not a
characteristic of individuals, but encompasses a number of people who were
conditioned in the same life experience and education. Hence, culture refers to a
mental programming that people have in common. National cultures share a
national character, which is usually more apparent to foreigners than to the
nationals themselves. Treven et al. (2008) add that people from different
cultures often do things in different ways, and further emphasize that one way to
explain variations in behavior is the idea of culture. Cultural variations do not
only exist in nations, but in regions, organizations, and individuals over time.
However, not everyone in a culture believe or behave in the same ways, and
sometimes differences within single cultures are greater than across cultures.
3.2.1 The Hofstede model
Hofstede’s research is considered one of the most well known and has together
with other researchers found evidence that national cultures vary and that a
range of management practices, such as leadership style, strategic decision-‐
making, and human resource management differ by national culture (De Mooij &
THEORETICAL FRAMEWORK
23
Hofstede, 2010; Kachelmeier & Shehata, 1997). Hofstede focused his attention on
work-‐related values in his study of culture (Treven et al., 2008). The Hofstede
model distinguished four different categories of values where national cultures
differ (Hofstede, 1980), and later a fifth category was added (Treven et al., 2008).
These categories are power distance, uncertainty avoidance, individualism-‐
collectivism, masculinity–femininity, and long-‐ and short-‐term orientation.
However, it is important to keep in mind that these dimensions do not describe
individuals, but the common characteristics within a national culture (Hofstede,
1980).
Power distance refers to the differences in power and status that are accepted in
a culture (De Mooij & Hofstede, 2010; Treven et al., 2008; Hofstede, 1980). In
cultures with high power distance everyone has his or her place in a social
hierarchy, and one’s social status must be clear in order for other people to show
proper respect (Hofstede, 1980). In organizations, power distance impacts the
amount of formal hierarchy, the degree of centralization, and the amount of
participation in decision-‐making (Newman & Nollen, 1996). The authors add
that employee participation is less likely in high power distance cultures, and
they view participative management with fear, disrespect, and distrust, since
participation is not consistent with their national culture. Managers who
encourage participations in high power distance cultures are seen as weak and
incompetent.
Uncertainty avoidance indicates the extent to which people feel threatened by
ambiguous and uncertain situations, and try to avoid such situations (Treven et
al., 2008; Hofstede, 1980). In societies with high uncertainty avoidance, there is a
need for formality and rules to structure life. Further, people in high uncertainty
avoidance cultures are less open to change and innovations than people from a
low uncertainty avoidance culture. In organizations, uncertainty avoidance is
manifested by the clarity of plans, procedures, policies, and systems (Newman &
Nollen, 1996).
THEORETICAL FRAMEWORK
24
The third category refers to whether the collective or individual action is the
desired way to deal with issues (Treven et al., 2008). In individually oriented
cultures people tend to emphasize their individual needs, concerns, and interests
over those of their organization. Moreover, belief is placed in individual
decisions (Hofstede, 1980), and a low-‐context communication culture with
explicit verbal communication is present (De Mooij & Hofstede, 2010). The
opposite is true for the collectivistic societies where one is expected to interact
with members of one’s group, and it is almost impossible to perceive a person as
an individual (Treven et al., 2008). Furthermore, the collectivistic society is
considered a high-‐context communication culture with a less verbal and indirect
style of communication (De Mooij & Hofstede, 2010), and belief is based on
group decisions (Hofstede, 1980). In organizations, collectivistic management
practices emphasize work unit solidarity and rewards based on the effort of the
team (Newman & Nollen, 1996). To the contrary, individualistic management
practices emphasize individual responsibility for results, and individual-‐level
rewards.
The most important difference in the masculine and feminine cultures is the role
differentiation (De Mooij & Hofstede, 2010). In a masculine society the role
differentiation is large, while in the feminine society it is small. Further, success
and achievement are dominant values in a masculine society (De Mooij &
Hofstede, 2010), money and things are considered important, and “you live in
order to work” (Hofstede, 1980). In a feminine society the dominant values are
quality of life and caring for other people (De Mooij & Hofstede, 2010), the
environment is important, and “you work in order to live” (Hofstede, 1980). In
organizations, feminine management practices emphasize the quality of
interpersonal relations and quality of working life issues (Newman & Nollen,
1996). Masculine management practices are manifested in opportunities for high
earnings, recognition, advancement, and rewards.
Hofstede’s last dimension refers to countries’ time orientation, one side of the
spectra being long-‐term and the other short-‐term (Newman & Nollen, 1996).
Values included in short-‐term orientation are personal steadiness and stability,
THEORETICAL FRAMEWORK
25
and respect for traditions (De Mooij & Hofstede, 2010). Long-‐term-‐oriented
cultures are characterized by patience, perseverance, a sense of obedience and
duty toward the larger good, and respect for one’s elders (Newman & Nollen,
1996). Long-‐term values are ordering relationships by status, belief in thrift and
savings, and having a sense of shame (De Mooij & Hofstede, 2010). In
organizations, management practices consistent with long-‐term cultural
orientation include providing long-‐term employment and solving problems for
the long term, rather than making quick fixes.
In conclusion, Hofstede’s cultural dimensions are considered significant and
influential in the understanding of cross-‐cultural differences in business
research (Kirsch et al., 2010; McKenna, 1998; Kachelmeier & Shehata, 1997).
Dimensional Values of Sweden and Taiwan
In Table 3.1 the differences between Sweden and Taiwan are displayed. The
table provides values from 0-‐100 for each dimension, which position countries
on each dimension relative to other countries (geert-‐hofstede.com). Hofstede
conducted this research between 1967 and 1973, covering more than 70
countries, using value scores collected from the employees at IBM. Hofstede
further argues that without comparison countries, a country’s scores are
meaningless. The scores have proven to be stable over decades, and the changes
that have affected cultures have been global, which indicates that when one
culture changes, other cultures change as well and their relative score remain. In
Figure 3.2 below, the differences are shown more clearly.
Table 3.1 The dimensional values of Sweden and Taiwan (inspired by geert-‐hofstede.com).
Power distance
Uncertainty avoidance
Individua-‐lism
Masculinity/Femininity
Long term orientation
Sweden 31 29 71 5 20
Taiwan 58 69 17 45 87
THEORETICAL FRAMEWORK
26
Figure 3.2 Comparison of Sweden and Taiwan (inspired by geert-‐hofstede.com).
To sum up the values of the two countries, the first dimension of power distance
shows that in Sweden, hierarchy is for convenience only, superiors are
accessible, equal rights are promoted, and managers coaches and empowers
employees (geert-‐hofstede.com). In Taiwan people accept hierarchies,
centralized organizations are popular, employees expect to be told what to do, to
challenge the leader is unacceptable, and the ideal leader is autocratic. The
dimension of uncertainty avoidance shows that the Swedish society has a low
preference for avoiding uncertainty, which also indicates a society where
schedules are flexible, innovation is not seen as threatening, and people believe
there should be no more rules than necessary. On the contrary, the Taiwanese
society has a relatively high preference for avoiding uncertainty. In such
societies there is an emotional need for rules, innovation may be resisted and
people have an urge to work hard.
The third dimension shows that Sweden is an individualistic society where
people are expected to take care of themselves and their immediate family only
(geert-‐hofstede.com). The relationship between employer and employee is
contract based on mutual advantages. Taiwan is a collectivistic society, which
manifests in long-‐term commitment to the group. The relationship between
employer and employee are perceived in moral terms, and viewed as a family
link. The fourth dimension shows that both countries are feminine societies
where it is important to keep a work life balance. However, there is a gap
between the countries scores, which indicates that Sweden to a larger extent is
31 29
71
5
20
58
69
17
45
87
0 10 20 30 40 50 60 70 80 90 100
PD UA IDV MAS LTO
Sweden
Taiwan
THEORETICAL FRAMEWORK
27
feminine oriented compared to Taiwan. The last dimension implies that Sweden
is a short-‐term orientation culture, which is typical for Western societies. On the
contrary, Taiwan is a long-‐term orientation culture, which is typical for the
Eastern societies.
3.2.2 The Chinese business culture
The Chinese business culture is rich and complex (Lin, 2010), and is not only
found in China, but also in countries where large numbers of Chinese migrants
are present, such as Taiwan, Singapore, and Hong Kong (Dong & Lee, 2007; Chen,
2001; Kao, 1993). Kao (1993) emphasizes that the Chinese business culture is
bound by shared traditions and not by geography, and can also be found in
Europe and North America. Dong and Lee (2007) stress that western managers
must understand the uniqueness and complexity of the Chinese business culture,
which has its origins in Confucianism (Lin, 2010). Confucianism refers to the
teachings from Confucius who valued harmony, hierarchy, reciprocity, obedience
to authority, filial piety, and conformity. Western managers often find the
Chinese business culture to be regimented, dictatorial, and slow moving (Sabath,
1999).
3.2.3 Leadership styles in different cultures
Research has shown that leadership styles vary in different cultures (Jogulu,
2010; Kirsch et al., 2010; Yousef, 1998; Hofstede, 1980), and it is mainly due to
the fact that different cultures maintain different norms and beliefs on how
reality should be viewed and practiced (Jogulu, 2010; Shahin & Wright, 2004).
Further, Hofstede (1980) argues that leaders cannot choose their leadership
style, but it depends to a large extent on the cultural conditioning of the
employees. Although, awareness of the cultural differences between parent
company and subsidiaries, and knowing where they differ on the various
dimensions mentioned under heading 3.2.1, will enable managers to predict
what consequences the differences might have for his or her leadership style.
The author further explains that one dilemma for organizations operating
abroad, is whether to adapt to, or try to change the local culture. If deciding to try
to change the local culture, it should be acknowledged that it is not an easy task,
and should not be taken lightly.
THEORETICAL FRAMEWORK
28
Leaders in collectivistic cultures prioritize the needs of the group, family, and
overall community when engaging in leadership actions (Jogulu, 2010). Values
and mutual obligations require leaders to give employees’ protection and
direction, in exchange for loyalty and commitment. Additionally, research has
shown that employees tend to avoid direct debate, and they complete tasks
quietly since the managers clearly assign what to do. Leaders in individualistic
cultures show characteristics as mentoring, networking, and other personal
initiatives, and their overall focus is emphasized on better financial results.
Leaders in individualistic countries are more concerned with employees’
progress, and therefore functions more as visionary leaders who provide
intellectual stimulation, articulate goals to employees, and also identify
themselves with the employees.
In high power distance cultures titles, positions, and social status is highly
regarded, since these indicate how other people treat and behave towards you
(Jogulu, 2010). Thus, it is anticipated that leaders demonstrate consensus in
working out rules that are acceptable for everyone, show tolerance, and respect
for age. Furthermore, high power distance cultures prefer an autocratic
leadership approach (Jogulu, 2010), which is defined as a leader who makes the
decisions and closely supervises the employees (Yousef, 1998). Low power
distance cultures believe that responsibilities and roles can change based on
individual effort and achievement (Jogulu, 2010). Moreover, a democratic
leadership approach is preferred (Jogulu, 2010), which is characterized by
employees’ participation in decision-‐making processes, and the absence of close
supervision from the leader (Yousef, 1998). Further, the relationship between
leader and employee is viewed as more equal (Jogulu, 2010). In low power
distance cultures managers encourage disagreement and prefer more open
discussions in order to avoid the risk of being misunderstood. Additionally,
research has shown that in low power distance countries, such as Sweden, some
initiatives are taken by the employees and not the leader.
THEORETICAL FRAMEWORK
29
Hofstede (1980) states that adapting managers to higher power distance
contexts do not present too many problems. He further claims that those
managers soon learn that they have to adapt to a more autocratic leadership
approach in order to be effective, and also tend to do so. However, for a manager
to adapt to a context with a lower power distance norm than his or her own is
more problematic, since the very idea of management prerogatives is not
accepted in very low power distance cultures.
3.3 Communication
Communication is an essential tool for managing people (Kupritz & Cowell,
2011), and is the best way to build trust (Thomas et al., 2009) and engage
employees (Groysberg & Slind, 2012). The main purpose of organizational
communication is to provide the necessary information for the employees to
carry out the strategic goals of the organization (Tanova & Nadiri, 2009).
Companies that operate across nations therefore have to be aware of differences
in communication styles due to different cultures. The key reasons for difficulties
encountered in cross-‐cultural communication stem from the fact that actors from
different cultures have different styles of dialogue and different understandings
concerning the interaction process (Korac-‐Kakabadse et al., 2001). Furthermore,
coming from a Western culture to an Eastern culture can be a frustrating
experience, especially if one is unaware of the communicational differences
(Balsmeier & Heck, 1994).
3.3.1 High-‐ and low-‐context communication
Ever since Edward Hall’s statement in 1959 that “culture is communication, and
communication is culture”, there has been a strong tradition in business studies
to distinguish between national cultures based on their way of communicating
(Lauring, 2011). Hall developed a theoretical model called low-‐ and high-‐context
cultures (Korac-‐Kakabadse et al., 2001), which explains differences in
communication styles among regions (Treven et al., 2008). Hall defines context
as the information that surrounds an event, and it is inseparably bound to the
meaning of that event (Treven et al., 2008; Korac-‐Kakabadse et al., 2001). More
explicitly, Hall refers to the situation, background, or environment connected to
THEORETICAL FRAMEWORK
30
an event, a situation, or an individual (Würtz, 2005). He explains that context is
the hidden, unconscious part of culture, which is not expressed by verbal
communication (Chan & Cabrera, 2007). Further, Hall observed that diverse
cultures use a different range of information processing systems to provide
context (Korac-‐Kakabadse et al., 2001).
Hall categorizes cultures from high-‐context to low-‐context (Treven et al., 2008).
He explains that on one end of the continuum is a low-‐context system where low
levels of information are used to provide context (Korac-‐Kakabadse et al., 2001).
Hence, a large quantity of explicit information must be present in order to
specify meaning. On the other end of the continuum is a high-‐context system
where a high amount of information is used to provide context. Consequently,
more time is essential to abstract meaning from the given set of information. As
shown in Figure 3.3, Western countries in general, and Scandinavian countries in
particular are considered low-‐context countries, while Asia, Middle East, and
Latin America is regarded as high-‐context countries (Tanova & Nadiri, 2009).
Low-‐ and high-‐context cultures imply the cultural rules around information
exchange, and the degree to which information in a culture is explicit or implicit
(Korac-‐Kakabadse et al., 2001). In low-‐context communication, information is
clear, vested in words, and precise in meaning. On the contrary, in high-‐context
communication information is vested in shared experience and assumptions, and
conveyed through verbal-‐ or non-‐verbal codes. People who belong to high-‐
context cultures tend to talk around the subject, but indicators are in place for
the crucial point to be understood. Additionally, silence can be a strong
statement in high-‐context cultures, and people from low-‐context cultures usually
have difficulties assigning meaning to the non-‐verbal codes (Tanova & Nadiri,
2009).
THEORETICAL FRAMEWORK
31
Figure 3.3 Regions on the continuum of low-‐ and high-‐context (inspired by Tanova & Nadiri, 2009).
Hall explains that all cultures can be placed on the low to high information
processing continuum, although no culture exists entirely at one or the other end
of the scale (Tanova & Nadiri, 2009; Korac-‐Kakabadse et al., 2001). He
recognizes cultures that predominantly use and prefer high-‐context modes as
“high-‐context cultures”, and cultures that predominantly use and prefer low-‐
context modes as “low-‐context cultures”. The preference for using the various
modes is highly related to how the people view space and time within these
cultures. People from low-‐context cultures emphasize schedules, promptness,
and segmentation, while people from high-‐context cultures are characterized by
a more holistic view where everything happens at the same time. Chen (2001)
explains that in high-‐context cultures the schedule has to follow the line of
events, while in low-‐context cultures the line of events have to follow the
schedule. Balsmeier and Heck (1994) state that knowing where a particular
country is placed on the low-‐ to high-‐context continuum provides valuable
insight in the appropriate style of communication with people from different
cultures.
The low-‐ and high-‐context model has received criticism such as
overgeneralization, lack of empirical foundation, and bi-‐polarization (Tanova &
Nadiri, 2009). However, the model remains widely accepted and used as an
Low-‐Context Communication Germanic Countries
Scandinavia
North America
Eastern Europe
Mediterranean
Latin America
Middle East
Asia
High-‐Context Communication
THEORETICAL FRAMEWORK
32
organization theory in the intercultural field of research (Lauring, 2011; Tanova
& Nadiri, 2009).
3.3.2 Communicating CSR to employees
In order to delegate the firm’s CSR to its employees, it is paramount to clarify
what CSR means to the organization (De Wit et al., 2006). In a cross-‐cultural
environment it is also of importance to translate those CSR activities to local
initiatives and local language. Thomas (2008) argues that employers should
leverage CSR internally and communicate what contributions the organization
does for the community, and also get the employees involved, since this will
enhance their commitment to the firm. To achieve alignment from employees, it
is essential to reach the hearts and minds of the people through communication,
training, and learning (De Wit et al., 2006). When communicating CSR,
consistency of language is essential to avoid confusion. Furthermore, the impact
of communication alone is short-‐lived, and has to be constantly reinforced.
Employees’ response to the organizations CSR are dependent on the
characteristics of the individuals, the organization, the industry, and on the
environmental context (Dhanesh, 2012). The author further argues that in
organizations that go beyond the economic and legal responsibilities and take it
one step further to adhere to high standards of ethics, employees are more likely
to experience a higher sense of emotional attachment to the company. Further,
the increase in emotional attachment to the organization could generate internal
benefits such as increased employee loyalty, motivation, and engagement
(Dhanesh, 2012; Amble, 2007).
3.4 Theoretical Synthesis
In the theoretical synthesis we will define and summarize the theoretical
framework so as to increase the comprehension of the theories and how they are
applied in order to analyze the empirical findings; thus, creating understanding
of how Swedish managers engage employees in CSR, in a different cultural
context.
THEORETICAL FRAMEWORK
33
In the CSR pyramid, Carroll identifies four categories of responsibilities that an
organization has towards society. Through the CSR pyramid we will be able to
analyze to what extent the case firms engage in social responsibility in Taiwan.
Moreover, arranging the firms’ CSR activities into categories will result in a
greater understanding concerning how the case firms’ CSR differ between each
other. Additionally, theory on how Asian organizations perceive and pursue
social responsibility will be utilized in order to analyze the potential difficulties
that the Swedish firms face when implementing CSR in their Asian subsidiary.
In his theoretical framework, Hofstede distinguish five different categories of
values where national cultures differ. Through these dimensions, we will be able
to identify and categorize the cultural differences that exist between the Swedish
managers and their Taiwanese employees. Moreover, theory focusing on cultural
differences in leadership will be utilized in order to provide understanding for
how leadership is perceived differently among the Swedish managers and their
Taiwanese staff.
CSR
CSR Culture
THEORETICAL FRAMEWORK
34
The communication between our respondents and their employees will be
analyzed using Hall’s theory of high-‐ and low-‐context communication. Hall
distinguishes cultures by how explicit information is being communicated. This
will provide an understanding for the communication difficulties that might exist
in the case companies due to cultural differences. Further, in order to analyze
how the firms communicate CSR to their employees, theory focusing on this
matter will be used.
Figure 3.4 Theoretical synthesis.
The theoretical synthesis will be utilized when analyzing the empirical findings,
with the intention to answer the research questions.
How do Swedish managers in Taiwanese subsidiaries engage
employees in CSR?
CSR Culture Communication
CSR Culture Communication
EMPIRICAL FINDINGS
35
4 EMPIRICAL FINDINGS
This chapter contains the primary data that was collected through interviews with
our two respondents. With the intention of making it easier for the reader, the
empirical findings will be presented by one company at a time using headlines that
are similar to the various parts of the theoretical framework.
4.1 IKEA
Our respondent at the company is Mr. Martin Lindström, the CEO of IKEA in
Taiwan, Hong Kong and Indonesia. Lindström has held this position for five years
and started his career at IKEA 22 years ago. During his career he has gained vast
experience from working abroad in countries such as Poland, Austria, Hong Kong
etc. The company’s Taiwan office is located in the western parts of Taipei, in the
same building as one of their department stores. The office landscape can be
described as open and employees working there were either dressed in the IKEA
uniform or dressed casually. Lindström’s office was located further into the
office landscape, with frosted glass walls and an open door, with the following
quote written on his wall: “No method is more effective than a good example”.
IKEA Taiwan and the other divisions under Lindström´s supervision is not
owned by the IKEA group but instead franchised by the retail conglomerate
Dairy Farm based in Hong Kong. However, Lindström emphasizes that the
ownership does not affect the customers who perceive the stores as any other
IKEA outlet in the world.
“Traditionally, those markets that has been too far away, too small, too different
has been owned by international franchisers /…/however, approximately ninety
percent of the revenue in IKEA worldwide is derived from the IKEA group.” -‐ Lindström
EMPIRICAL FINDINGS
36
The first IKEA store in Taiwan was established in 1994 and today the division
consists of four department stores across the country with a staff of 1100 people.
The combined annual revenue of these four outlets exceeds 160 million USD and
IKEA currently holds the largest market share in Taiwan within their industry.
According to Lindström, Taiwan is of great significance for IKEA and Ingvar
Kamprad since it was the first country in Asia Kamprad came to in the end of the
1970s in order to locate suppliers.
IKEA’s CSR policy
Social responsibility is communicated on IKEA’s website under the heading
People and Environment, which is the company’s focus in this matter (ikea.se).
The firm explains that their concern stretches from reducing child poverty to
producing renewable energy, and that both employees and suppliers are
engaged. The result of this can, according to the company, be seen in innovative
products and solutions, and the way IKEA conducts business. Information
regarding social responsibility on the company’s website is extensive and
practices such as caring for employees, making local as well as global
contributions, and strengthen supplier relations are discussed. Moreover,
organizations such as Unicef, Save the children, and WWF are stated as IKEA’s
foremost cooperation partners.
4.1.1 CSR in Taiwan
Operating IKEA Taiwan as a franchise does not result in any compulsion to
follow the brand’s social responsibility practices. However, Lindström means
that this factor comes as a natural part of the business since it is not possible to
only apply a few parts of the IKEA concept.
“It is not possible to pick out a few parts of the IKEA concept. It is all or nothing,
and that is also the consequence of having an IKEA franchise.” -‐ Lindström
One of the greatest challenges in Taiwan has been the accessibility of land, which
some retail firms solved by acting on the verge of what was legal. However,
EMPIRICAL FINDINGS
37
Lindström emphasizes that complying with the law has always been of great
importance for both IKEA and Dairy Farm, and therefore the growth of the
division was delayed. After changes in the Taiwanese law were introduced, IKEA
could finally start to expand in 2004.
Lindström explains that social responsibility, in his perceptions, is a wide and
difficult concept to define. In Taiwan there are many companies who focus a lot
of effort on communicating their CSR to the media, but according to Lindström
IKEA Taiwan is more focused on establishing a platform in this matter and to
gain an understanding of what the concept means to them. Further, he believes
that future CSR activities will result in mainly internal value and increased
employee commitment. Additionally, Lindström does not believe that these
practices will be used as a marketing tool.
“For me it is important that it strengthens the brand positioning of IKEA, that we
are a responsible company, and that it feels right and genuine.” -‐ Lindström
One of the CSR activities utilized in Taiwan is the global practice among the
national divisions of IKEA, to give away one Euro for each soft-‐toy they sell
during the Christmas season. The money collected in this campaign is then
distributed to different projects in India and Vietnam. Lindström further explains
that IKEA Taiwan has established a relationship with the organization Save the
Children, in order to generate a deeper understanding and gain greater
knowledge in the area of social responsibility. Moreover, material relating to
social responsibility distributed by IKEA’s headquarter are often used for the
purpose of educating employees.
Another project that IKEA supports together with their customers is a school
meal-‐program in the eastern parts of Taiwan. Recently, a group of 20 to 30
employees travelled to one of the schools supported by this project to help out.
According to Lindström, this activity was well received by the IKEA employees
and for many of them this fieldtrip was an eye-‐opener that this type of situation
is present in Taiwan.
EMPIRICAL FINDINGS
38
“There are exceptionally many children who do not get any food in school /…/ and
many parents cannot afford to pay for school meals. We were surprised when we
heard of this.” -‐ Lindström
Lindström also explains that the Taiwanese government has become more
demanding regarding sustainability, something IKEA is very proactive in. The
new IKEA store that is going to open in the city of Taichung, is focusing especially
on this area in terms of solar panels on the roof, collection of rainwater for usage
inside the building, re-‐planting trees etc. Another perspective that Lindström
emphasizes when discussing the new store and their operations in general is to
have a long-‐term orientation, something he believes is of great significance when
maintaining IKEA’s brand-‐position in Taiwan.
Through the American-‐ and European Chamber of Commerce, IKEA is active
together with other retailers in forming proposals for new legislations in Taiwan.
Lindström explains that this makes it possible for IKEA to be a part of reforming
the country and helping Taiwan to reach an international standard.
“The situation for Taiwan is special /…/ nobody recognizes Taiwan and that results
in Taiwan not having any other countries to talk to, and because of that
international companies become natural conversation partners’ of the
government.” – Lindström
4.1.2 Culture and leadership
Lindström argues that company culture in Taiwan has traditionally been, and
still is, driven by the leader of the company. The Taiwanese employees expect
the leader to know everything and it is common that they delegate upwards.
According to Lindström the reliance on the manager’s directives and what he
says are often used in order to avoid taking own decisions. Another example of
what Lindström found noticeable in Taiwan, is that as a manager you need to be
careful with how late you stay in the office since many of the employees are
reluctant to leave before the manager does.
EMPIRICAL FINDINGS
39
Before Lindström took over the position as CEO of IKEA Taiwan, the organization
had been experiencing turbulence due to the fact that there had been four
different managers in less than seven years. He explains that establishing a kind
of continuousness in the relationship is necessary in order to create trust, which
is extremely important, but time consuming, in Taiwan.
Lindström finds it paramount to, as he describes it, tear down the hierarchical
barriers between him as a manager and his employees, something he perceives
as deeply rooted in the Taiwanese mindset. He arranges casual meetings,
breakfasts and lunches in order to get to know his employees in smaller groups.
Further, by establishing clear specifications for what is expected of the
employees, but also what they should expect of him as a manager, helps to create
a closer relationship according to Lindström.
Another difficulty Lindström experiences is that Taiwanese employees often
openly agree even though they do not agree, and getting to know their real
opinion is very problematic.
“You have to find the right techniques to get input. To enter a meeting and say that
we should brainstorm is a guarantee for silence. /…/ then I just keep being silent
and sometimes it works.” – Lindström
At the moment Lindström has increased the amount of people reporting to him
which puts him in a situation were he is constantly occupied and unavailable to
others. Therefore many employees do not have the possibility to get his input
and are forced to make decisions on their own. Lindström explains that this
situation clearly shows which of his employees who are proactive and have
potential.
“They know that I am busy and they know they have to take the decision by
themselves /…/ it is actually quite effective.” -‐ Lindström
According to Lindström different management has been necessary during the
different phases of the company’s expansion in Taiwan. That kind of
EMPIRICAL FINDINGS
40
organizational change is something he perceives to be very difficult for
Taiwanese employees to handle. Conflict avoidance is another problematic area
where Lindström has actively tried to promote the fact that conflicts can be
constructive, by openly arguing with one of his store managers who is of German
origin.
4.1.3 Employee communication
The communication with employees is done in English, since Lindström believes
it is imperative due to the fact that the corporate language of the IKEA
organization is English. The company offers language classes in English and, on
certain occasions, in Swedish.
Lindström finds it paramount to make sure that his employees are not afraid of
challenging decisions and suggestions, including those connected to social
responsibility. During a discussion regarding the soft-‐toy project employees
were questioning why the money were going to India and Vietnam, instead of
supporting projects in Taiwan. Lindström explains that he was surprised by the
lack of knowledge regarding the situation in Vietnam and India, and finds it very
valuable that the employees now have a better understanding of the conditions
in those countries.
According to Lindström there has been a very positive response from the
employees during and after CSR activities, and he perceives it as easy to get them
involved, especially when they see a clear link between their efforts and the
results. As an example, supporting the school meal program was an employee
suggestion. Another employee proposal was to make it possible for some of them
to travel to Vietnam and visit the projects that are supported by IKEA. These
kinds of employee suggestions emerge in both meetings and casual
conversations.
“To create the format where they dare to take decisions and come up with ideas,
that is the biggest challenge.” -‐ Lindström
EMPIRICAL FINDINGS
41
Lindström emphasizes the importance of communicating his and IKEA’s vision,
that making mistakes is part of the learning process. He hopes that this will
eventually make the employees more willing to take risks, and to be more
proactive in questions regarding every area of the firms business.
“We have handed out booklets to everybody /…/ then you need to study it over and
over, and repeat the same thing until you are truly tired of it /…/ and then say the
same things next year.” -‐ Lindström
IKEA Taiwan has an annual review of employee perception, including answering
the question if they believe IKEA is a responsible company. The answers are then
used to build strategies for future advancements. Lindström emphasizes the
importance of clarity in the strategies that the firm uses and he argues that they
need to function as guidelines to what the employees need to prioritize and focus
on, one of the core values being social responsibility. In order to make this more
explicit, Lindström has created a booklet that is distributed among the staff
where the strategies and responsibilities are displayed. He encourages the
employees to study and gain comprehension for what is explained in the booklet.
In addition, to be able to make the impact long lasting, Lindström finds it
imperative to be consistent in what is being communicated in order to avoid
confusion.
4.2 Scania
The respondent at Scania is Mr. Andersson who is the manager of the company’s
production unit in Taiwan and South Korea. Andersson has been in this position
for the last three years and has been employed in the organization for 23 years.
Andersson has previous experience from working in similar positions in several
Swedish production units, and has a one-‐year experience of working abroad in
Holland some ten years ago.
The production unit, located outside of Taipei, opened in the end of 2008 and
now employs some 40 people, including administrative staff. Scania’s office is
open and spacious, with Andersson’s room located in the corner with frosted
EMPIRICAL FINDINGS
42
windows and the door left open. The production unit in Taiwan assembles bus-‐
and truck chassis for the local market. Scania’s inter-‐city buses are doing
especially well, and today the company controls a significant part of the
Taiwanese market share in this product category. Before 2008, the same job was
outsourced to an external Taiwanese firm, but due to company decision the
manufacturing is now fully owned by Scania.
“I believe quality has improved quite significantly since Scania took over.” – Andersson
Scania’s CSR policy
On Scania’s website social responsibility is communicated under the heading
Scania in society, where the importance of minimizing the environmental impact
from their products is stated. A sustainable manufacturing of vehicles that are
low in fuel consumption, and low in emissions is paramount for Scania’s business
concept. The company describes themselves as having an important role in
society, since they create work opportunities and helps their customers to
become more efficient. Moreover, the combination of support from OECDs
(Organization for Economic Co-‐operation and Development) guidelines for
MNCs, Scania’s leadership principles, and the firm’s core values constitute the
foundation for all activities within the organization.
4.2.1 CSR in Taiwan
Andersson finds it difficult to define the concept of CSR, but he believes that the
three core values of the Scania Production System function as a guideline.
“One is the customer first, another is respect for the individual and the third is
elimination of waste /…/ and when it comes to respecting the individual, factors
such as good work environment and safety are of significance.” -‐ Andersson
Scania utilizes a production system that is influenced by the method used by
Toyota. Andersson explains the core values as per above with safety and
environment as the top priorities. He perceives Taiwan as having sufficient laws
regarding protection of the environment but is not sure on how they are obeyed.
EMPIRICAL FINDINGS
43
Andersson further explains that it took some time before the employees at the
company realized that they needed to separate the garbage. He argues that this
type of waste management is not only beneficial for the environment but also
results in lower costs for Scania.
An important part of the firm’s social responsibility practices, Andersson
believes, needs to be directed at caring for the employees and make them enjoy
working for Scania. As a result of low demand Scania introduced flextime, which
is utilized by not having any production on Fridays. Andersson explains that this
makes it possible for the company to handle a downturn much more smoothly.
Moreover, when Scania has experienced decrease in production demand
Andersson has used some time left over to let his employees gain experience in
the company’s service workshops, visit the port where Scania’s consignments
are delivered etc.
A long-‐term view is significant for Scania, Andersson explains, and therefore he
does not mind spending “extra” money when it comes to quality. Something he
believes is less common in local firms.
The trade unions in Taiwan are weak but Andersson feels that within Scania,
responsibility is taken as a normal situation for items such as safety,
environmental issues, health controls etc.
Future advancement in social responsibility activities in Scania Taiwan is,
according to Andersson, going to originate from the headquarter. There is a
strong emphasizes on aligning practices among all of Scania’s subsidiaries,
including activities that is related to social responsibility.
4.2.2 Culture and leadership
Andersson explains that he has not changed his leadership style to any greater
extent compared to back home in Sweden. Andersson describes his employees as
very loyal, and if the company had to reduce the staff, the employees left would
still try hard to get the additional job done.
EMPIRICAL FINDINGS
44
“They have a deep respect for the manager /…/ maybe too much respect and often
they do not to suggest certain things.” -‐ Andersson
Andersson explains that the employees were unfamiliar with the Swedish
leadership style in the beginning, but after a couple of years it seems like they
now appreciate it. Making it possible for everybody to participate and being able
to influence their job is of great importance for Scania but it seems like the
Taiwanese employees are not used to this.
“The culture here and back home is very different and that is something you need
to be aware of. My perception is that the Swedish style is very appreciated.” -‐ Andersson
Another cultural difference Andersson faced in Taiwan is peoples’ perception of
quality. He describes his experience with Taiwanese craftsmen who have been to
the factory and how their repair jobs were of very low quality, resulting in them
coming back the next year to fix the problem once again.
“Long term solutions is something I believe is regarded slightly different in Taiwan
from Sweden. Here it seems like low price and short-‐term are given more priority.” -‐ Andersson
According to Andersson, Taiwanese employees in general are less proactive and
often need to be told what to do. However, after making the work teams become
responsible for their own working area in terms of cleaning, maintenance etc.,
and linking this to a bonus system Andersson has experienced an improvement.
4.2.3 Employee communication
Communication with the employees is often done through the Taiwanese
supervisor who reports directly to Andersson. It is very uncommon that the staff
communicates with him directly, and the supervisor acts as a link between him
and the rest of the assembly workers since he speaks both Chinese and English.
However, according to Andersson, even the supervisor has difficulties
EMPIRICAL FINDINGS
45
disagreeing with him, and only occasionally he speaks up and correct Andersson
if he believes him to be wrong.
“They find it difficult to speak up and say that they have done mistakes. /…/ I try to
tell them that it is ok to make mistakes as long as you tell everybody openly and
learn from them.” – Andersson
Clarity is something that Andersson finds crucial in his communication with his
Taiwanese employees. There are several whiteboards around the office and the
assembly area where everything from production plans, quality controls,
damaged material, and the principles of Scania are being communicated in a
clear and simple way.
At Scania Taiwan, meetings are held with the entire workforce at least once a
month where Andersson talks to the employees and answers their questions.
According to Andersson the employees are very reluctant regarding openly
showing their disapproval, but he often becomes aware of their opinion through
the supervisor. In order to get a better understanding of the employees’
perception Andersson used an anonymous survey where they could share their
opinion about him, other supervisors and about several other issues in general.
Overall the feedback was positive and the staff seems to like the Swedish
leadership style Andersson explains. Moreover, Andersson finds it important to
have an open communication with his employees to make them committed.
ANALYSIS
47
5 ANALYSIS
In this chapter we will combine the theoretical framework with the empirical
findings. Initially, we will discuss and analyze to what extent IKEA and Scania take
social responsibility in Taiwan, how the managers perceive and manage cultural
differences, and end the analysis with how they communicate CSR to their
employees.
5.1 CSR in Taiwan
Carroll (1979) states that CSR is a multi-‐dimensional construction consisting of
economic, legal, ethical, and philanthropic responsibilities, which the author
illustrates in a pyramid-‐shaped figure (Figure 3.1). The economic responsibilities
form the base upon which the other responsibilities rest, since without it the
other elements are unlikely considerations (Carroll, 1991). Firms do not only
operate according to the profit motive, but are expected to comply with laws and
regulations declared by the state as well. Hence, the legal responsibilities are
appropriately comprehended as coexisting with the economic responsibilities.
The empirical findings indicate that both firms have increased their revenues
from last year and IKEA is currently expanding in the country. Moreover, both
IKEA and Scania control a substantial market share within their business area in
Taiwan, and due to the reasons stated earlier, we consider the companies to
fulfill the economic responsibilities. Furthermore, the interviews reveal that the
companies find it imperative to follow the laws and regulations in Taiwan. IKEA
had to postpone their expansion in the country since the regulations regarding
land accessibility at first were very complex and strict. According to Lindström,
other retail firms who pursued expansion during that time had to act in ways
that sometimes could be considered as illegal, and therefore IKEA decided to
wait until new legislations were introduced. The environment is of high priority
ANALYSIS
48
for Scania, and Andersson perceives the Taiwanese regulations within this area
as sufficient, but he is unsure of how well other companies comply with them.
The third layer of the pyramid consists of the ethical responsibilities, which are
practices embraced or forbidden by the society, even though they are not
codified into laws (Carroll, 1991). According to Lindström, the Taiwanese
government has lately exerted an increasing pressure on firms to be more
environmentally sustainable, something IKEA has taken into consideration in
their new store in Taichung, which will have solar panels and rainwater
collection for usage inside the building. Moreover, the firm is active in helping
the government developing new regulations, which in the case of Taiwan is
problematic due to their limited relations with other countries. One of Scania’s
core values is respect for the individual and the empirical findings show that the
company has shouldered some of the responsibilities that the trade unions
normally are in charge of. Moreover, caring for employees is of importance in
Scania who focuses especially on safety and modifying the way they operate in
order to avoid laying off people when production is decreasing. These kinds of
CSR practices that have strong connections to the organizations core operations
and values are considered to be the most effective (Borglund et al., 2009;
Grafström et al., 2008).
The philanthropic responsibilities constitute the fourth layer of the pyramid
(Carroll, 1991). These responsibilities are not expected, but desired by the
community; hence, philanthropy is merely a voluntary choice made by the firm
(Azmat & Zutshi, 2012; Carroll, 1991). Based on the interviews, only IKEA
pursues philanthropic practices through the support of a school-‐meal program in
the east of Taiwan and monetary donations to organizations in India and
Vietnam. This difference between the two companies could be explained by the
nature of IKEA’s business model, which is business to consumer oriented.
Several authors argue that CSR activities are to a larger extent applied by
companies with a direct connection to the consumer market (Pollach et al., 2012;
Borglund et al., 2009; Grafström et al., 2008; Trebeck, 2008).
ANALYSIS
49
Moreover, the findings show a clear connection between what both respondents
describes as their CSR activities in Taiwan with those global values and activities
that their company communicates on their website. Further, findings also show
that IKEA has a greater CSR-‐engagement than Scania, and a more engaged
Manager regarding CSR.
The empirical findings show that both respondents find it difficult to define the
concept of social responsibility, which confirm the statement made by Azmat and
Zutshi (2012) that CSR is an ambiguous term. Due to cultural traditions
originating from religions, philanthropic practices are often applied in Asian
organizations (Azmat & Zutshi, 2012). However, ethical responsibilities, such as
work place safety or employee training and development, are seldom utilized
among firms in Asia, which is apparent in both of our case companies. Moreover,
Western value concepts that rest on deeply rooted cultural characteristics and
concepts of duty do not necessarily work in other cultures (Von Weltzien Hoivik,
2007) and therefore, to what extent the two case companies take social
responsibility might be perceived differently from the perspective of their Asian
employees.
5.1.1 Summary
§ In our opinion, both IKEA and Scania comply with the economical and
legal aspects of Carroll’s definition of CSR. Moreover, different practices
that can be considered as a commitment to ethical responsibilities are
apparent in both of the case firms. However, only IKEA pursues
philanthropy, which can be explained by their direct relation to the
consumer market. Moreover, what is communicated on the companies’
websites as the firms’ values and CSR activities are confirmed in the
Taiwanese subsidiaries.
§ The perception of social responsibility is different in Asia where
organizations prioritize philanthropy before ethical responsibilities.
Therefore, to what extent the case firms are socially responsible might be
considered differently from a Taiwanese perspective.
ANALYSIS
50
5.2 Culture and Leadership
Culture is defined by Hofstede (1980) as the collective mental programming of
the people in an environment. The author further argues that culture should not
be seen as the characteristics of individuals but something that embodies a
number of people who were conditioned the same way, hence the presence of
cultural differences among nations. Hofstede’s model distinguishes five different
categories of values in which national cultures differ (Treven et al., 2008), and
these are power distance, uncertainty avoidance, individualism-‐collectivism,
masculinity-‐femininity, and long-‐ and short-‐term orientation (Hofstede, 1980).
Power distance concerns the differences in power and status that are accepted in
a culture (De Mooij & Hofstede, 2010; Treven et al., 2008; Hofstede, 1980). As
displayed in Figure 3.2, Taiwan can be considered as a high power distance
culture, especially in relation to Sweden. In a high power distance culture,
employee participation is relatively non-‐existent and participative managers are
viewed with fear, disrespect and distrust and can also be seen as weak (Newman
& Nollen, 1996). The empirical findings show that Lindström is well aware of the
greater distance in power that is present in the Taiwanese culture, and he
actively tries to change that within IKEA by creating a more casual environment
and having meetings where employee participation is encouraged and
sometimes almost forced. The same context is evident at Scania, where employee
participation is considered a high priority even though the Taiwanese staff
seems unaccustomed to it. In the interviews conducted there were no evidence
that our respondents perceive their employees to disrespect or distrust them
because of their participative management style. However, research has shown
that challenging the leader is unacceptable in high power distance cultures, such
as Taiwan (geert-‐hofstede.com), and therefore this kind of opinions will most
likely be withheld.
The second category in Hofstede’s model is uncertainty avoidance and indicates
to which degree people are threatened by uncertain and ambiguous situations,
and therefore tries to avoid such circumstances (Treven et al., 2008; Hofstede,
ANALYSIS
51
1980). As stated in Figure 3.2, Hofstede’s research shows that Taiwan is
perceived as a high uncertainty avoidance culture, whereas Sweden is
considered to be on the other end of the continuum. Employees at IKEA are often
reluctant to take decisions on their own, and instead delegate the decision-‐
making to Lindström. This is also apparent at Scania, where Andersson perceives
the employees as generally less proactive compared to Swedish staff. However,
after making work teams responsible for their own working area in terms of
maintenance and cleaning, and further linking it to a bonus system, Andersson
has experienced change. Moreover, both of the respondents actively try to
convey the message that making mistakes are part of the learning process in
order to encourage the staff to be more proactive. Newman and Nollen (1996)
explain that in order to overcome the difficulties related to uncertainty
avoidance, clarity is of essence regarding plans, procedures and systems. Scania’s
practice of using numerous whiteboards to clarify plans and procedures are
most likely a significant contribution to the change that Andersson has
experienced. Treven et al. (2008) and Hofstede (1980) argue that people from
high avoidance cultures are less open to change, which has been evident at IKEA
during their expansion where organizational change was necessary.
The third category in Hofstede’s model focus on whether a country is considered
as individualistic or collectivistic (Treven et al., 2008). Figure 3.2 shows that
Taiwan is a collectivistic society, while Sweden is an individualistic society. In
organizations, collectivistic management practices emphasize work unit
solidarity and rewards based on team-‐effort (Newman & Nollen, 1996). On the
contrary, individualistic management practices focus on individual responsibility
for results and individual-‐level rewards. The empirical findings show that linking
team-‐effort and rewards is present at Scania, and that it is well accepted.
The fourth category concentrates on variations in role differentiation in what De
Mooij and Hofstede (2010) define as masculine and feminine cultures. Both
Taiwan and Sweden are considered feminine societies, however, as displayed in
Figure 3.2, the difference in to what extent they are feminine is substantial, and
Taiwan is on the verge of being masculine oriented. In masculine societies you
ANALYSIS
52
live in order to work, while in the feminine society, you work in order to live. As
can be seen in IKEA, Lindström experiences that many of his employees are
reluctant to leave the office before he does, demonstrating commitment to the
firm. Also Andersson at Scania perceives his employees as very loyal and hard
working. Our findings indicate that Taiwanese employees behavior are more in
accordance with that of a masculine society. In feminine management practices
the quality of interpersonal relations are emphasized (Newman & Nollen, 1996),
which is evident in both cases since both managers actively tries to establish
close relations with their employees.
The last category in Hofstede’s model focus on countries’ time orientation, one
side of the continuum being long-‐term and the other short-‐term (Newman &
Nollen, 1996). The gap between Sweden and Taiwan concerning this category is
significant (Figure 3.2), demonstrating that Sweden is rather short-‐term oriented
and Taiwan is highly long-‐term oriented. Characteristics in long-‐term oriented
cultures are among others, patience and perseverance (Newman & Nollen,
1996). Lindström emphasizes the importance of creating trust between himself
and his employees, something he perceives as quite time consuming. De Mooij
and Hofstede (2010) argue that management practices consistent with long-‐term
oriented cultures include solving problems for the long-‐term, rather than making
quick fixes. The empirical findings in our study contradict this statement.
According to Andersson, low price and short-‐term are given more priority in
Taiwan, something he is actively trying to make sure is not present in Scania.
Research has shown that leadership styles vary in different cultures (Jogulu,
2010; Kirsch et al., 2010; Yousef, 1998; Hofstede, 1980). In collectivistic cultures,
which Taiwan is considered to be (Figure 3.2), leaders are required to give
employees’ clear directions in exchange for loyalty and commitment, and direct
debate from employees are unusual (Jogulu, 2010). The empirical findings show
that this is true in both case companies. Lindström perceives Taiwanese
employees to be highly conflict aversive, and Andersson sees it as necessary to
give his employees clear directions in what they have to do.
ANALYSIS
53
In high power distance cultures, such as Taiwan (Figure 3.2), autocratic leaders
are preferred (Jogulu, 2010) with the decision-‐making resting upon the leader
(Yousef, 1998). A democratic leadership style is preferred in low power distance
cultures (Jogulu, 2010) such as Sweden (Figure 3.2), where the decision-‐making
is characterized by employee participation (Yousef, 1998). Employees trying to
avoid participating in decision-‐making are present in both of the case companies.
In the case of IKEA, Lindström actively tries to get his employees to challenge
decisions and suggestions, which according to Jogulu (2010) is in accordance
with managers from low power distant cultures. Moreover, both Lindström and
Andersson experience that their staff is more used to autocratic leadership.
A dilemma that is present among companies who operate abroad is whether to
adapt or try to change the local culture (Hofstede, 1980). For managers to adapt
to a higher power distance context do not present too many problems, and
managers soon learn that they need to adjust to a more autocratic leadership
style in order to be more effective. The empirical findings show that Lindström
actively tries to change the local culture in his attempt to tear down the
hierarchical barriers, forcing his employees to make decisions on their own, and
promote the fact that conflicts can be positive and constructive. Andersson
explained that he has not changed his leadership style to any greater extent, but
he believes it has been necessary to apply a higher level of governing. However,
Newman and Nollen (1996) argue that management practices that reinforce
national culture are more likely to yield predictable behavior and high
performance due to coherency with behavioral expectations. Chinese business
culture is not only found in China but also in countries where large numbers of
migrants are present, such as in Taiwan (Dong & Lee, 2007; Chen, 2001; Kao,
1993). Knowledge regarding the teachings of Confucianism, from which Chinese
business culture originates (Lin, 2010), result in a better understanding of its
uniqueness and complexity (Dong & Lee, 2007). The empirical findings show no
signs that the aspect of Confucianism is something that the respondents reflect
upon.
ANALYSIS
54
5.2.1 Summary
§ The cultural differences that are described in Hofstede’s model
correspond to a great extent with how the respondents perceive the
variations between them and their Taiwanese employees.
§ Both Lindström and Andersson actively try to change their employees’
behavior, rather than adapting to their culture, something that could
result in inefficiency in the organization.
5.3 Employee Communication
The main purpose of communication within organizations is to provide
employees with the necessary information in order for them to carry out the
strategic goals of the organization (Tanova & Nadiri, 2009) and it is considered
as an essential tool for managing people (Kupritz & Cowell, 2011). Companies
that operate across nations therefore have to be aware of the variation in
communication styles, which Hall’s theory of high-‐ and low-‐context
communication aims to clarify (Korac-‐Kakabadse et al., 2001). Hall defines
context as the hidden and non-‐verbal information that surrounds a specific event
(Chan & Cabrera, 2007). In his model, Hall categorizes cultures on a scale from
high-‐context to low-‐context (Treven et al., 2008), where in low-‐context cultures
information is clear, vested in words, and precise in meaning (Korac-‐Kakabadse
et al., 2001). In high-‐context cultures, information is vested in shared experience
and assumptions, and conveyed through verbal or non-‐verbal codes. As
displayed in Figure 3.3, Scandinavians are considered to apply a low-‐context
communication style, where as people from Asia are using the most extreme
level of high-‐context communication style.
The empirical findings show that both Lindström and Andersson emphasize the
importance of clarity when communicating with their Taiwanese employees,
something that is highly related to low-‐context communication (Korac-‐
Kakabadse et al., 2001). To enhance the clarity, both companies also
communicate the most significant messages in writing, either through
whiteboards or in booklets. Moreover, both the respondents explain that they
ANALYSIS
55
are often met by silence when communicating with their staff. According to
Tanova and Nadiri (2009) silence can be a strong statement in high-‐context
cultures, and people from low-‐context cultures usually have difficulties assigning
meaning to non-‐verbal codes. Taking this into consideration one could assume
that our respondents do not comprehend some of the communication from their
Taiwanese employees, and their workers’ silence might instead be perceived as
disinterest.
It is the employees who carry most of the burden when it comes to implementing
the ethical behavior of the company (Collier & Esteban, 2007) and therefore
their investment and understanding of the organization’s CSR is paramount
(Walton & Rawlins, 2011; Munslow, 2010; Simmons, 2008). In order to delegate
the company’s CSR to its employees, it is imperative to clarify what CSR means to
the organization (De Wit el al., 2006). The empirical findings show that both
respondents find it difficult to define CSR, but they work actively to communicate
their perception of the firm’s social responsibilities. According to De Wit et al.
(2006), companies that operate in a cross-‐cultural environment need to translate
CSR activities into local initiatives. This is especially evident at IKEA, where
encouraged employees have provided suggestions for how the company can be
socially responsible in Taiwan. The situation at Scania more resembles a one-‐
way communication from the Swedish manager regarding CSR. However, the
employee suggestions at IKEA have been entirely focused on philanthropic
responsibilities, confirming the statement made by Azmat and Zutshi (2012) that
the understanding of social responsibility in Asia is more directed towards
philanthropy than ethical responsibilities.
According to Thomas (2008), communicating how the firm contributes to society
and getting the employees involved will enhance their commitment to the firm. If
the firm goes beyond the economical and legal responsibilities, and adhere to
high standards of ethics, which both the case companies do, employees are more
likely to establish a higher sense of emotional attachment to the company
(Dhanesh, 2012). De Wit et al. (2006) argues that the impact of communication
alone is short-‐lived and therefore has to be constantly reinforced. The empirical
ANALYSIS
56
findings show that both IKEA and Scania have at least monthly meetings where,
among others, issues concerning CSR are discussed.
5.3.1 Summary
§ Communication difficulties due to cultural differences are evident in both
of the case companies.
§ Both respondents find it problematic to define CSR, but work actively in
communicating their perception of the firm’s social responsibilities on a
continuing basis.
CONCLUSIONS
57
6 CONCLUSIONS
The final chapter will present the findings of this thesis. To begin with, the three
sub questions will be concluded, in order to reach an answer to our primary
research question. The chapter will end with the limitations of the thesis, followed
by the thesis applicability, and recommendations for further research.
6.1 Answers to the Research Questions
The purpose of this thesis is to contribute with knowledge regarding the
relatively unexplored area of internal CSR communication in cross-‐cultural
contexts. We believe that the findings in this study will help organizations to
increase engagement in CSR among employees in subsidiaries where the culture
is different from that of the parent company. In this chapter, we will
incrementally discuss and conclude the three sub questions: To what extent do
Swedish firms take social responsibility in Taiwan?, How do Swedish managers
perceive and manage cultural differences in their Taiwanese subsidiaries?, and
How do Swedish leaders manage the communication regarding CSR in relation to
their Taiwanese employees?. This will result in an answer to our primary research
question “How do Swedish managers in Taiwanese subsidiaries engage employees
in CSR?”
The first sub question focuses on to what extent the Swedish firms take social
responsibility in Taiwan. Our analysis shows that both case firms take economic,
legal and ethical responsibilities. The ethical responsibilities are focused towards
the company’s employees, the development of new regulations in Taiwan, and
being environmentally sustainable. Only IKEA commits to philanthropic
responsibilities, which can be explained by the fact that the company is business
to consumer oriented. Further, our analysis suggests that due to cultural
CONCLUSIONS
58
differences the Taiwanese employees might perceive the extent of the case
companies’ CSR differently.
The second sub question concerns how Swedish managers perceive and
manage cultural differences in their Taiwanese subsidiaries. Our findings
demonstrate that several cultural differences are visible in both case firms, and
mainly concern issues such as lack of employee participation and unwillingness
to take risks. Further, our analysis determines that the respondents manage
these cultural differences by actively trying to change the behavior of the
employees and adapt them to a democratic leadership style, which our analysis
suggests could lead to inefficiency within the organization.
The third sub question focuses on how Swedish leaders manage the
communication regarding CSR in relation to their Taiwanese employees. The
analysis shows that communication difficulties due to cultural differences are
evident in both of the case firms. Moreover, the respondents actively and
continuously communicate their perception of the firm’s social responsibilities
to their Taiwanese employees. Our findings show that IKEA demonstrates a
more interactive employee communication regarding CSR compared to what is
evident in Scania.
Last, we will answer our primary research question:
How do Swedish managers in Taiwanese subsidiaries engage employees in CSR?
Through the analysis of the thesis we conclude that Swedish firms in Taiwan are
committed to CSR, but to different extents, which can be explained by the nature
of the company’s business operations. Moreover, the respondents actively try to
engage their employees in CSR by continuously communicating their perception
of the firm’s social responsibilities.
Our analysis suggests that participation from employees is crucial in order to
establish effective CSR. However, due to cultural conditioning, participation
CONCLUSIONS
59
among the employees in the case firms is considerably low, resulting in a
negative impact on the companies’ CSR commitment. Managerial actions are
taken with the intention to change the behavior of the Taiwanese employees,
which we have found is especially effective when related to the firm’s
philanthropic activities. We therefore conclude, that combining CSR that is
embraced by Asian culture with managerial efforts to increase employee
participation, result in effective CSR practices in Taiwan.
Through the above stated conclusions we find that we have reached the premise
of the thesis. This thesis provides a case study of how Swedish managers in
Taiwanese subsidiaries engage their employees in CSR, based on personal
interviews conducted with Swedish managers in Taiwan. To our knowledge,
internal CSR communication in cross-‐cultural contexts is a relatively unexplored
area of research, and our intention has been to make a contribution to the
existing research gap.
6.2 Limitations of the Research
Firstly, the case study contains a small sample size. If given the chance to conduct
more interviews, we would have had the possibility to generalize to a larger
extent on how Swedish managers engage Taiwanese employees in CSR.
Nevertheless, a pattern was revealed in the two firms interviewed, showing a
similar perception of cultural and communicational differences. Secondly,
interviews were only conducted with the Swedish managers in the companies
and it would have been optimal to interview their Taiwanese employees as well.
Through interviews with the Taiwanese employees we would receive a more
comprehensive perspective of the subject studied in this thesis. However, due to
lack of time and resources this was not possible. Lastly, we base our findings
regarding CSR, culture, and communication on an empirical research conducted
under a limited period of time. People are not static, and the context might
therefore change in the future. However, we believe that similar results will be
found in a similar context.
CONCLUSIONS
60
6.3 Applicability of the Findings
Due to the country’s many Chinese migrants, Taiwan is heavily influenced by
Chinese business culture and therefore we consider this study to be highly
applicable in other countries where this specific culture exists, such as China,
Singapore and Hong Kong. This also indicates that the study is not only relevant
in organizations operating in Taiwan and Asia, but also in the West where
employees from Eastern cultures are managed and lead by people from Western
cultures. Moreover, we believe the findings of our research are applicable in
other areas than CSR, such as the communication of other responsibilities and
tasks within the same context as stated earlier. We want to emphasize that
industry, company, or country is not the key contexts in our research, but the
managers’ and employees’ cultural origins are.
6.4 Suggestions for Further Research
The area of CSR, in terms of cross-‐cultural communication within organizations,
is highly contemporary and significant, and therefore in need of further research.
Thus, we recommend further research to be derived from this thesis. We suggest
a similar research, but with the collection of empirical data from a larger number
of organizations; hence, making it possible to generalize to a greater extent.
Moreover, interviews conducted with both managers and employees are
recommended in order to receive a complete perspective of this phenomenon.
Additionally, we suggest further research within Asian organizations, in order to
understand how local managers engage their employees in CSR, and further
analyze the differences and similarities compared to how Western managers
engage employees. Hence, receive valuable findings on how organizations
worldwide can make their CSR activities more effective.
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ATTACHMENT
ATTACHMENT 1: Interview guide (Swedish)
Inledande frågor
§ Position i företaget?
§ År inom företaget?
§ År i Taiwan?
§ Tidigare arbetserfarenhet?
1. Kan du kortfattat beskriva företagets historia och utveckling?
§ Produktportfölj?
§ Verksamhet i Taiwan?
§ Ekonomisk utveckling?
Socialt ansvarstagande i Taiwan
2. När började ert företag arbeta med socialt ansvar i Taiwan?
3. Hur har ert arbete med social ansvarstagande utvecklats över tid?
§ Skiljer det sig från andra delar av företaget i andra länder?
4. Hur ser du på socialt ansvarstagande?
Kulturskillnader och ledarskap
5. Hur upplever du de kulturella skillnaderna mellan dig och dina anställda?
6. Upplever du att du behöver anpassa ditt sätt att leda anställda här i
Taiwan? Om ja, hur?
7. Hur involverar ni era anställda i ert arbete med socialt ansvar?
§ Hur upplever du deras engagemang?
8. Vad är din uppfattning angående deras förståelse för företagets sociala
ansvar?
§ Anser du att deras förståelse har förändrats över tiden? Om ja, hur?
Kommunikation med anställda
9. Hur kommunicerar du ert sociala ansvar till era taiwanesiska anställda?
ATTACHMENT
10. Upplever du att du måste anpassa din kommunikation gällande detta
område? Om ja, hur?
11. Hur upplever du kommunikationen från dina anställda gällande socialt
ansvar?
§ Har den förändrats över tiden?
Avslutande frågor
12. Vad är dina förväntningar på den framtida utvecklingen beträffande
socialt ansvarstagande?
§ I branschen?
§ I företagets verksamhet?
ATTACHMENT
ATTACHMENT 2: Interview guide (English)
Initial questions
§ Position in the company?
§ Years working for the company?
§ Years in Taiwan?
§ Earlier working experience?
1. Can you briefly describe the company’s history and its development?
§ Product portfolio?
§ Operations in Taiwan?
§ Economic development?
Social responsibility in Taiwan
2. When did your company start working with social responsibility in
Taiwan?
3. How has your work with social responsibility developed over time?
§ Does it differ from other parts of the company in other countries?
4. How do you perceive social responsibility?
Culture differences and leadership
5. What is your perception of the cultural differences between you and your
employees?
6. Do you perceive it as necessary to adapt the way you lead employees here
in Taiwan? If yes, how?
7. How do you involve your employees in your work with social
responsibility?
§ How do you perceive their engagement?
8. What is your opinion regarding their understanding of the company’s
social responsibility?
§ Do you feel that their understanding has changed over time? If yes,
how?
ATTACHMENT
Communication with employees
9. How do you communicate social responsibility to your Taiwanese
employees?
10. Do you feel that you need to adapt your communication regarding this
subject? If yes, how?
11. How do you perceive the communication from your employees regarding
social responsibility?
§ Has it changed over time?
Ending questions
12. What are your expectations on the future development regarding social
responsibility?
a. In the industry?
b. In the firm’s operations?
Linnaeus University – a firm focus on quality and competence On 1 January 2010 Växjö University and the University of Kalmar merged to form Linnaeus University. This new university is the product of a will to improve the quality, enhance the appeal and boost the development potential of teaching and research, at the same time as it plays a prominent role in working closely together with local society. Linnaeus University offers an attractive knowledge environment characterised by high quality and a competitive portfolio of skills. Linnaeus University is a modern, international university with the emphasis on the desire for knowledge, creative thinking and practical innovations. For us, the focus is on proximity to our students, but also on the world around us and the future ahead. Linnæus University SE-391 82 Kalmar/SE-351 95 Växjö Telephone +46 772-‐28 80 00