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Author:Koivisto, Jussi V 
Title:Cultural Heritages and Cross-Cultural Management : Cross-Cultural Synergy and Fiction in Finno-Japanese Management
Series:Acta Universitatis oeconomicae Helsingiensis. A, ISSN 1237-556X; 144
Series no:A-144
Year:1998  Thesis defence date: 1999-02-02
Discipline:International Business
Index terms:Culture; Finland; Japan; Japani; Johtaminen; Kulttuuri; Leadership; Suomi
Abstract (eng):Premises

Cross-Cultural Management

According to many studies cross-cultural issues are among the most central and most persistent factors that influence international business activity. When companies operate internationally they face such cross-cultural challenges as understanding the differences in communication patterns and styles, preferences for leadership approach and style, different principles and notations of hierarchy and organisational structures, and different systems of decision making, and its is possible to continue this list much further. It can even be argued that proper understanding and proper handling of cross-cultural dimensions of management is a prerequisite for successful international management.

Such well known scholars of the field as Vern Terpstra and Nancy Adler have even argued that internationally operating companies can generate competitive advantage over domestically operating firms by understanding the cultural differences deeply and turning them into synergy effects in international management and marketing. Needless to say that improperly understood and improperly handled cultural differences can cause organisational friction that is difficult to manage and that may cause severe inefficiency and competitive disadvantages.

In order to approach the international companies’ needs for cross-cultural knowledge, many studies have been published. Many of these previous studies have concentrated on cultural differences between different societies at the level of manifestation, the surface level of visible and measurable behavioural phenomena in different cultures, such as the level of communication patterns, organisational structures, collectivism versus individualism, and masculinity versus femininity. Usually these studies have been either comparisons between two cultures or multi-country surveys and their focus has been identifying different sets of cross-cultural similarities and differences. Another often addressed important theme has been the processes and models of cross-cultural integration in multicultural teams and micro-groups. At the same time, the more fundamental questions of what is the origin of these differences, where these cultural differences come from, and how they change while cultures change has been far less addressed in depth in the cross-cultural management literature. In this respect some important questions are: (1) What is the relationship between cultural heritage and management culture in a society. (2) What are the underlying dynamics in cross-cultural management, and which role is played by cultural heritages behind cross-cultural management. (3) Is there a linkage between cross-cultural synergy and friction in cross-cultural management and the cultural heritages behind. The present study attempts to address to these questions.

The Context of Finno-Japanese Management

When cross-cultural management is studied, it can not be completely segregated from its context, from those cultures whose members are interacting with each other in management setting. Consequently, in order to be able to approach the more fundamental issues of the underlying dynamics of synergy and friction in cross-cultural management, these elements of synergy and friction have to be studied in their real-life cultural contexts. Therefore, the present study has also selected a pair of cultures to be analysed in depth as to their backgrounds, elements and heritages: Finland and Japan. Now a question arises, why just these two cultures were selected. When the appropriateness of any given setting is assessed, two factors have to be taken in account: (1) On one hand, the cultural setting selected should be such one in which the two cultures are different enough so that it is easy to make observations on similarities and differences. (2) On the other hand, the cultural setting should be unstudied before, so that a reasonable research gap would exist.

In this assessment Finland and Japan apparently provide a good platform. As a western European society the cultural context of Finland belongs clearly to the Occidental civilisation, while Japan - with its cultural heritages of Confucianism, Buddhism and Shintoism – belongs to the East-Asian civilisation. Consequently, it is obvious that the Finnish and Japanese cultural backgrounds are distant enough to allow cultural differences to be easily observed. Moreover, both Finland and Japan are culturally relatively homogeneous as societies as these two societies are not characterised by large cultural minorities or high degree of cultural diversity. Consequently, it can be argued that the Finno-Japanese setting forms a kind of cross-cultural laboratory - even on a more general Euro-Asian setting - in which observations on cultural differences and similarities, and on cross-cultural synergy and friction, can be done more easily than in a setting characterised by high degree of cultural diversity. Finally, it is important to note that previous extensive studies on Finno-Japanese cross-cultural management have not been done, which also constitutes an important research gap and justification to the present study, at least from the Finnish point of view.

The Setting of the Study

The present study attempts to reveal the “dynamics of culture”, the underlying structures or mechanisms through which cultural heritages play a role in cross-cultural management settings. Consequently, the concept of “culture” used in the present study shall be such one that provides tools to separate the cultural heritage from the manifestations of culture in management. Therefore, the concept of culture that has been adopted in the study is a Lévi-Starussian one in which culture is regarded as a two-level entity. Claude Lévi-Strauss put forward in his studies that culture comprises of two levels, the surface- and deep-levels. The surface level of culture comprises such phenomena as communication patterns, social and societal institutions, organisations, artefacts, expressed or articulated values. These phenomena are then regarded as product that manifest the deep-level of culture that comprises the underlying cosmology, epistemology and world-view. The deep level can be revealed by studying the ideologies, religions and myths that have dominated the society and culture. Furthermore, cultures develop and change over the course of history, when new seams of thought are added to the deep-level. These different seams do afterwards co-exist and co-influence the phenomena that appear at the surface level. In this conceptualisation, the present study approaches the cultural heritages of Finland and Japan as the cultural deep-levels, while the Finnish and Japanese management, as well as the cross-cultural management between them is regarded as phenomena that belong to the surface-levels and through which the deep-levels are manifested.

The empirical core of the present study is an investigation on cross-cultural synergy and friction in Finno-Japanese management. In this approach the terms “synergy” and “friction” are used as metaphors of facilitating and harming factors in Finno-Japanese management. Thus, the study has approached these, to a great extent subjective and subject-dependent, features, by defining cross-cultural synergy and friction as the involved Finnish and Japanese managers’ experiences of “synergy” and “friction”. These elements of synergy and friction are then analysed through their contexts and origins in the Finnish and Japanese cultural deep-levels. In this point it is appropriate to bring forward that the companies in which the Finno-Japanese management takes place may have an influence on the perceptions of synergy and friction through their cross-cultural organisations and policies. Consequently, the study would be of much lesser value if it would not take this organisational dimension in account in its analysis.

Consequently, the research is based on three main research questions: (1) Firstly, the study aims at finding out the features and tendencies in Finno-Japanese cross-cultural management that result in perceptions of synergy or friction among the Finnish and Japanese managers involved. (2) Secondly, in order to shed light of understanding over these elements of cross-cultural synergy and friction, the study endeavours to reveal their cultural bakground - those ideas and values in the Finnish and Japanese cultural heritages that facilitate the appearance of these features that result in synergy or friction in the Finno-Japanese management. (3) Thirdly, as the company context in which the Finno-Japanese management takes place can have an influence over the elements of synergy and friction, the study approaches the organisations involved with a particular emphasis on the cross-cultural dimensions of their organisation and management.

The empirical data of the study was collected by interviewing Finnish and Japanese managers in five Finnish companies that have a subsidiary in Japan and six Japanese companies that have a subsidiary in Finland. The data comprises 29 in-depth interviews with Finnish and Japanese subjects. The study comprises of two main kinds of results. (1) The first analysis-part of the study consists of literature study and Lévi-Straussian analysis of (1a) Finnish and (1b) Japanese cultural heritages – id est, the “Lévi-Straussian” deep-levels of Finnish and Japanese cultures - and their manifestations in the surface levels of Finnish and Japanese management cultures. This part of the analysis has been put forward in the fifth and sixth chapters of the study. (2) The second part of the analysis is an (2a) empirical investigation on how the Finnish and Japanese managers have experienced synergy and friction in their cross-cultural management activities and (2b) on how their organisations generated effects of cross-cultural synergy and friction through their cross-cultural settings and policies.

The empirical part of the present study uses a kind of hybrid methodological approach between the research strategies of survey and company-case methodology. On one hand, when the Finnish and Japanese managers’ experiences of cross-cultural synergy and friction was studied, a direct case-methodology was not used, but the managers were surveyed, yet using qualitative tools for both collecting and analysing data on their experiences. On the other hand, the study on the companies’ cross-cultural organisations is based on case study approach, and the five Finnish and six Japanese case-companies cross-cultural organisations were analysed as company-cases.

The Main Results of the Study

Elements and Reasons for Synergy and Friction

According to the empirical results of the study, the most salient elements of cross-cultural synergy in Finno-Japanese management were the following: (a) work is regarded as a value in se in the both societies, (b) in both Finnish and Japanese management consensus is valued high in decision-making, and (c) a certain modesty and low key approach was preferred. It also came up that during the recent decades, the both societies have become increasingly similar and international. The most salient elements of friction were based on (a) the Finnish preference to more explicit "low context" communication vis-á-vis the Japanese preference for more open-ended "high context" pattern, and (b) the Finnish organisations' and managers' individual based ideals vis-á-vis the Japanese emphasis on collective patterns of work and decision-making. Also the Finnish companies decentralised structures of authority and matrix organisations sometimes caused their Japanese employees to disorientate, while the Finnish interviewees in Japanese companies regarded the Japanese companies' high hierarchies as too inflexible and confusing. If these elements of synergy and friction are contextualised through their cultural and ideological origins, it can be concluded that the strongest elements of synergy had their origins in the similarities between the Finnish Lutheran (Protestant) and Japanese Confucian work ethic and emphasis on frugality and modesty, and the both societies' ancient emphasis on social dimension and consensus. Similarly, it can be argued that the most evident elements of friction had their backgrounds in the Finnish Lutheran esteem for individualism and explicitness of communication vis-á-vis the Japanese Buddhist ideals of effacement of the ego in satori, or anti-individualism, and duality of communication between tatemae (the expressed) and honne (the true) and avoidance of conceptual categorisation.

Cultural Crossings

In order to approach the cross-cultural organisations of the companies studied, the present study introduces a new concept of cultural crossing. Cultural crossing is that layer in a cross-cultural organisation in and through which the cultural codes of communication and patterns of management are transformed from one cultural “language” to another. Cultural crossing appears to have two main elements, its locus and mode. The locus of the cultural crossing is the organisational location where the two cultures meet. In foreign subsidiary management it can, by definition, be in four paradigmatic locations: (1) Between a foreign subsidiary and its foreign customers, (2) within the foreign subsidiary, (3) between the foreign subsidiary and the company headquarters and (4) within the company headquarters. In real life, the locus of the cultural crossing is often multilocal, for instance when the locally hired managers of a foreign subsidiary do pursue management activity at the same time with the expatriate managers within the subsidiary and the parent country national managers at the company headquarters.

The modus of the cultural crossing is the way how this process of transformation is done. According to the present study the modus or mode has three alternative patterns: (1) If the mode is segregated, the both parties of a cross-cultural setting operate among themselves using their own cultural styles and patterns of management and no integration has been done in order to bridge the cross-cultural gap. (2) In companies that use integrated or gradual mode of cultural crossing, the two cultures are gradually bridged to each other so that a “buffer-zone” exists in which “mixed management” is used in order to achieve good integration. (3) Finally, it is also possible to hire a truly bi-cultural individual, a cultural mediator, to act as the bridge in a cross-cultural organisation. In such case, the mode is mediated. According to the empirical results, the locus of cultural crossing was far less important factor behind synergy and friction in cross-cultural management than its modus. At the organisational level, the different elements of Finno-Japanese cross-cultural friction appeared to result in conflicts more likely if the modus of the cultural crossing was segregated. Consequently, the synergies were most easily utilised and friction avoided if the cultural crossing was integrated.


When the scientific contribution of the present study is threefold: (1) First, the present study is the first extensive and in-depth approach to Finno-Japanese cross-cultural management. (2) Second, through its Lévi-Straussian approach, the study reveals some aspects of the dynamics between management and cultural heritage. (3) Third, the study introduces a new concept, that of cultural crossing, that the will become an useful tool for analysing and developing cross-cultural management, also beyond the Finno-Japanese setting.
Thesis defence announcement:
Cultural Heritages and Cross-Cultural Management:
Cross-Cultural Synergy and Friction in Finno-Japanese Management

KTL, FM Jussi V. Koiviston väitöstilaisuus Helsingin kauppakorkeakoulun juhlasalissa tiistaina 2.2.1999 kello 12.00

KTL Jussi V. Koiviston tohtorinväitöskirja ”Cultural Heritages and Cross-Cultural Management: Cross-Cultural Synergy and Friction in Finno-Japanese Management” tarkastetaan julkisessa väitöstilaisuudessa Helsingin kauppakorkeakoulussa tiistaina 2.2.1999 kello 12.00 alkaen. Väitöstilaisuuden kustoksena toimii väitöskirjan ohjaaja, professori Reijo Luostarinen ja vastaväittäjänä professori Nigel Holden.
Tutkimus tarkastelee kulttuurienvälisten synergia- ja kitkatekijöiden ilmenemistä suomalais-japanilaisessa liikkeenjohdossa. Tutkimus on rajattu tarkastelemaan suomalaisten yritysten tytäryksikköjä Japanissa ja japanilaisten yritysten tytäryksikköjä Suomessa. Tutkimuksen metodologia on kvalitatiivinen. Tutkimuksen laaja tiivistelmä on liitettynä tähän tiedotteeseen suomeksi ja englanniksi.
Tutkimuksen ohjaajana on toiminut professori Reijo Luostarinen Helsingin kauppakorkeakoulusta. Lisäksi osia tutkimuksesta on tehty Tokiossa (Tokyo University of International Studies) professori Masao Yamaguchin johdolla sekä Stanfordin yliopistossa Yhdysvalloissa professori James Marchin johtamassa tutkimuslaitoksessa. Lisäksi voidaan todeta, että tutkimus on sikäli uraa uurtava, että se on eräs ensimmäisistä suomalaisista väitöskirjoista, joka on merkittävältä osaltaan tehty yliopistosektorin ohella myös ammattikorkeakoulun piirissä: Seinäjoen Ammattikorkeakoulun kaupan alan yksikössä.
Väitöskirja on julkaistu Helsingin Kauppakorkeakoulun Acta-sarjassa julkaisunumerolla A-144.

Cultural Heritages and Cross-Cultural Management:
Cross-Cultural Synergy and Friction in Finno-Japanese Management

The public defence of Jussi V. Koivisto’s intended doctoral dissertation thesis will commence at the Festival Hall of the Helsinki School of Economics and Business Administration on Tuesday, February 2, 1999, at 12:00 o’clock noon

The doctoral dissertation thesis of Mr. Jussi V. Koivisto will be examined in a public dissertation defence that will commence at the Festival Hall of the Helsinki School of Economics and Business Administration on Tuesday, February 2, 1999, at 12:00 o’clock noon. The thesis is titled ”Cultural Heritages and Cross-Cultural Management: Cross-Cultural Synergy and Friction in Finno-Japanese Management”. The chairman of the defence session will be Professor Reijo Luostarinen, and the opponent will be Professor Nigel Holden.
The thesis analyses how cross-cultural friction and synergy emerge in Finno-Japanese business management. The study is limited to focus on Finnish firms’ subsidiary operations in Japan and Japanese firms’ subsidiary operations in Finland. The study is based on qualitative methodologies. An executive summary of the study is provided as an appendix to this release in both English and Finnish.
The research has been supervised by Professor Reijo Luostarinen of the Helsinki School of Economics and Business Administration. In addition, parts of the research are done in Tokyo (Tokyo University of International Studies) under Professor Masao Yamaguchi, and at Stanford University (United States) at a research institute supervised by Professor James March. Moreover, the study is in such respect a pioneering one that it is one of the very first Finnish doctoral dissertations that has been researched partly at a Polytechnic: Seinäjoki Polytechnic Business School.
The dissertation has been published in the Acta -series of the Helsinki School of Economics and Business Administration with serial number A-144.
Opponents:Holden, Nigel
Copenhagen Business School, Denmark

Chairperson:Luostarinen, Reijo