Posted on by Cheryl Marie Cordeiro

In SvD 19 April 2013, Näringsliv.
Conflict and powerplay between Volvo Cars and Geely as presented in the press.
Text & Photo © CM Cordeiro 2013

‘Five conflicts stirring Volvo in China’
Just recently this headline in large fonts headed the front page of the business section of one of Sweden’s most respected morning news papers. It was obvious that something had changed.

As one of many who keep a keen interest in the economic and geographic spatial reconfigurations of the global automobile industry, I did not expect a smooth process of acquisition of Volvo Cars by Geely from 2010 onwards.

Research literature charts a five times more likely narrative of a failed attempt at mergers and acquisitions than one of success. In the case of the Swedish then American owned Volvo Cars being acquired by Chinese Geely, language, culture, values and outlook on life per se are but the tip of the ice-berg to the multiple foundational layers of differences that need to be disentangled in this corporate marriage.

In studying Chinese and Swedish leadership and management styles, a field of research that I’ve worked with since 2004 (Cordeiro-Nilsson 2009), to say that China and Sweden have different cultures, is perhaps an appeal too much towards lex parsimoniae, where culture is here defined as a set of values, both explicit and implicit, shared by a collective of people with a shared ideology or mental framework that manifests itself in material action.

The overall picture is far more complex than what the media can at any one point in time represent. What is reflected in the media is often the result of much polishing and trimming of editorials and underlying narratives. And what is happening between Volvo Cars and Geely as reflected in the Swedish media, is but a synchronic snap-shot of a process that is inherently longitudinal in character. Organizational relations are ongoing dialogic processes that can be assessed in a more balanced perspective when placed in the context of a longitudinal time-frame, of years and decades past and what is also to come. As such, media representations of Volvo Cars – Geely relations need to be understood in the context of the larger socio-economic and political relations that have been built over time between their organizations, between Sweden and China.

While I can agree with the idea that it is perhaps Geely and China in general who have failed to understand the legacy of Volvo Cars with an inherent Swedish sense of pragmatic luxury, defined here in terms of stability of design and function, passenger safety and environmental concern, I could also postulate that somewhere along the grapevine, time was not adequately allocated towards the fostering and general education of the branding and core values of Volvo Cars for this different, new and emerging market. What was once a gap in knowledge is apparently now a chasm of power and identity struggle.

That Volvo Cars being the entity of acquisition should have little say developing a new post-acquistiion corporate culture and the instilling of its own values through effective communication in its branding efforts towards a new market is a weak argument that falls into the trap of aperspectival fallacy. Back in 2011, Geely did something quite un-Chinese. It tried to formulate a separate strategy for managing Volvo Cars, “Volvo is Volvo, Geely is Geely” (Li Shufu 2011). This indicated a certain openness towards an understanding of the Volvo legacy at the same time, indicating a gap in the existing knowledge that needed to be filled in the new, emerging market. As a brand with a track record of safety obsession, this gap in knowledge of core values properly transmitted was one that Volvo Cars could well have taken the initiative to help fill, from the inception of its Chinese acquisition.

China’s market can now however, hardly be considered to be emerging as such, but one that is coming into their own status and identity. Drawing upon their own regal history, the burgeoning of a new Chinese identity brings with it, a sense of expansion of empire as such in friendly cultural and ideological sharing on the political and diplomatic fronts. Where once China was mostly a scholar in meticulous study of the world. It is now a teacher.

In an effort to understand this dialogical process of mergers and acquisitions, of coming to terms with a new culture and creating a new corporate culture, I asked a Swedish Managing Director $G in the pulp and paper industry, who worked in the region of China, Taiwan and Southeast-Asia over a period of eight years, his strategy for keeping close steering whilst being away from Asia and back in Scandinavia for example. What human resource or talent management problems did he encounter whilst away from Asia? How did he cope with those problems? Could the subsidiary still run as he wanted it to, when he was away?

$G began by telling how in order to effect any change within the organization at all, he first found himself observing and keenly learning. As he spent most of his time in Taiwan and China, he devoted much of his time learning about the Chinese culture. Some of his learning efforts were more purposeful, whilst at other times, it was a serendipitous situation of sorts that led to a new insight into the culture or people he now found himself working with on a daily basis.

When two seeming authorities stand steering side-by-side, $G is careful to emphasize the non-conflicting nature of the situation whilst at the same time, acknowledging the tense atmosphere at the work place. The transcript illustrates a strategy of change management and offers insight into the steering of an organization that can be likened to a ship in times of temperamental winds and tides in the context of an ever changing business environment.

The interview excerpt comes from a long interview session conducted in 2004, with a total duration of about one hour fifty minutes, as part of my data collection to my studies in general on Nordic and Asian management styles. It lends a perspective to the learning processes of a new environment and culture, outlining how $G in particular, fostered a strong organizational culture that (not to stereotype per se but rather to describe) can perhaps be understood as more Swedish than Chinese. And how he remained at the steering helm even when away from the Asian subsidiary.

What helped in this situation for $G was that he had from the inception of the company in Asia, made it a point to have open channels of communication and feedback, so that even when he was back in Scandinavia, the Asian subsidiary would run as smoothly as possible with a strong sense of organization identity, based on a thorough understanding of the organization’s vision, its purpose, goals and corporate strategy of how these should be accomplished.

Interview excerpt 2004

@ Recorded activity ID: ACDGP1/1
@ Activity Type/Level 1: Long interview
@ Anonymized: Yes
@ Activity Medium: Spoken/face-to-face
@ Duration: 01:49:45
@ Participant: G = MXXXX (Interviewee)
@ Participant: S = FXXXX (Interviewer)
@ Recorder: Cheryl M / Cordeiro
@ Transcription name: TACDGP/1/1
@ Time coding: No
@ Section: §Start
@ Section: §End

$S: so what was it that struck you / that was different with individuals you brought into the company / from asia compared with those from scandinavia for example
$G: the first thing that struck me / was the business orientation / money orientation / < uhm > // also you could say th+ < > / this issue about education was something that struck me as well // the willingness always to learn and < anoymous name > had a pretty good school system // i knew that from the beginning they have a high recognition for their school system but also the willingness to < sort of > have an adequate education that pays off / then you also learn / i also learn i would say / a lot about the family structure that you take care of your parents / they also have a lot of brothers and sisters it’s not a one child economy / most of them have four or five brothers and sisters / the guy i hired for the business development part he’s a very good guy he’s still with the company / extremely good guy / he lived with his parents he was [1 the eldest son so he’s taking care of his parents / ]1
@ < pensive >
@ < word break >
@ < hedge >
$S: [1 and i guess he has his own family ]1
$G: yah // and that was kind of a shock to me < > / so you moved out when you were twenty he said / yes i moved out / < huh > what did your parents think about that / oh i think they were pretty happy <> / he’s a very funny guy / he’s extremely bright and intelligent but he was considered as an unpolished jewel if you understand < > / a person with enormous capacities and capability but quite you know / open minded / very open minded and usually also told things and put questions / and he < pu+ > / and < > / very funny guy / very funny guy and enormously funny guy to work with / and a development drive you wouldn’t dream of / nothing impossible actually for that guy and < er > / he came in // he came in / with a marketing manager / and a very good controller who had worked with real estate business / and then my secretary / and then a product manager / and another product manager / and then we started to become some twenty five in the office after three four months time and then you could set up working with a kind of a company culture and you have plans and so on
@ < gesture: hand movement >
@ < incredulous >
@ < laughter >
@ < eye contact: looks for confirmation >
@ < word break >
@ < laughter >
@ < hedge >
$S: the company culture / < > would you describe it as / more swedish or was it more < anonymous name: asian country >
@ < hesitation >
$G: people were extremely interested in < anonumous name: company > / and you could realize that immediately / and i thought the base of the local partner would be a very good base but i realized after awhile / that they were not at all interested in the local partner < > / the local partner was a kind of old fashioned chinese company that was very hierarchic very bossy and very secret as most chinese companies are family companies also are particular
@ < smile >
$S: what do you mean secret
$G: you don’t tell people more than just they need to know / yah / and you could say that < > / and i implemented most of the things that we have / most of the things in < h r > portfolio / we had a target management by objective we had a management team / clear roles and responsibilities for people / appraisals / discussions / < uhm > bonus system based on that the boss comes with a secret envelope / but clear targets and things like that
@ < sentence break >
@ < acronym: human resource >
@ < thought recollection >
$S: but don’t the chinese have a bonus system too like year end
$G: yeah < > / but that’s usually the boss going around with red envelope that he gives to people / that’s very common in < anonymous name > that the boss goes around with secret red envelopes / and gives cash to people / and there’s no system / so it’s the boss who gives / at least in the traditional chinese companies they do that / so you can say that in the summer of ninety eight / when i have worked for nearly a year the and people were on board / i went to sweden on holidays and after three days my secretary called and said < anonymous name > he’s here now / chairman of the board and he had an office in our office as well / and he’s here everyday now / and he was talking to people < in chinese of course > / and he was trying to take over and find out / and i said < okay okay > what is he doing / well he’s asked us to fill in a lot of forms and to fill in a lot of papers / we have to give daily planning what we’re doing / he’s restricted all travelling because it costs too much / jesus christ // so how do you feel about it // well people are not too happy she said / what do you think then / well < uhm > don’t worry she said / we’ll manage until you come back / we’ll do our job anyway / then i called the bosses the marketing manager and discussed / and of course they didn’t understand this / they didn’t know really how t+ < > / they had different loyalties / the chairman of the board is president of the company / and he was chinese and you couldn’t < > /and this was face and all that / and then you had the swedish boss / so i said to them don’t worry this will not be a conflict < at all > / but you know what to do don’t you / we have our clear targets we know < exactly > what to do / < yeah well do it then > / and make sure there’s no conflicts with < anonymous name > i said / okay fine < > / when i came back he was still sitting there in the office // and they had done a very good job despite the fact that he was there / and he probably didn’t understand what they were doing /
@ < nods >
@ < conviction >
@ < calm >
@ < hedge >
@ < sentence break >
@ < sentence break >
@ < tonal emphasis >
@ < tonal emphasis >
@ < conviction >
@ < smile >
$S: so < > / nobody was giving orders / yet they were doing what they were supposed to anyway
@ < hesitation >
$G: yeah / which < > / it was frightening for him / he didn’t understand that i could be away / you were away for three weeks / yes i’m away for three weeks / but how do you control people / i don’t control people / i give them orders / i give them a task and an objective / and then i check up if things are done / i don’t have to be there everyday / and < er > then i came back and the job was done / because we had contacts in sweden as well and they were sending faxes and emails / and things like that and < er > / came back so everything was prepared and done / then i understood that the whole organization had taken my part / and he had a problem with confidence then / which was pretty serious then / because he was the chairman of the board / but he had lost his face in relation to the staff so < er > / people had < > / so when i came back people said / don’t worry we back you up we have done the job / so i called in < anonymous name > and i said / what has happened during this three weeks / oh i was here to make sure that everbody was happy and working and < > / but there’s been no travelling i said / no / no no no no it was not a good time for travelling < you know > / oh okay / i understand from my secretary that there has been a lot of paper work that you asked to fill in / < no / no / > yes i said / i know everything / and then he understood and that was the end of that discussion actually / he got pretty annoyed / he got very annoyed
@ < sentence break >
@ < hedge >
@ < hedge >
@ < hedge >
@ < sentence break >
@ < sentence break >
@ < reconfirmation >
@ < denial >

Bibliography

——
Dialogic: Language science term referring to that everything anybody have ever said always exists and is anticipated in things that will be said. We never, in other words, speak in a vacuum. As a result all words and the ideas which the language contains and communicates is dynamic, relational and engaged in a process of endless re-description.

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