Building Trust Relationship in Cross-Cultural Collaboration: Case Studies on Two Chinese Animation Companies

Building Trust Relationship in Cross-Cultural Collaboration: Case Studies on Two Chinese Animation Companies

Zheng Liu (Xi'an Jiaotong-Liverpool University, China) and Lei Ma (Nanjing University of Science and Technology, China)
DOI: 10.4018/978-1-5225-2160-0.ch010

Abstract

Internationalization and inter-firm collaboration is a business trend today. Meanwhile, cultural values and managerial practices vary from country to country which makes cross-border management more challenging than the traditional in-house business model. A trusting relationship is essential to business success, yet details of how to build-up and maintain trust are unclear. This paper investigates trust development in cross-border collaboration. The literature review has covered key trust theories and its linkage with culture. To further understand the critical issues in of trust, two in-depth case studies are conducted from the Chinese animation game industry. It is found that in order to achieve long-term business collaboration, companies need to be continuously responsive and adapt their trust models. Based on the case analysis, a general model and a practical model are developed for further testing. Other research topics to further link trust with sustainability are also proposed at the end of the chapter.
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Introduction

With the popularity of new technology and the trend of globalization, the business world now is witnessing the booming of international collaboration. Taking the manufacturing sector, for example, firms no longer conduct all parts of the production in-house, but rather collaborate with suppliers and partners, all-together forming supply chains. The trend of expanding from single factory operations management towards inter-firm collaboration occurs also in emerging new industries which include the creative sectors such as the animation game industry. Traditionally, companies such as Disney vertically integrate almost all parts of operations, including conceptualization, production, distribution, and character business. However, currently there are more animation products being created either through joint design or by outsourcing. The collaboration between Disney and Pixar provides a good example in which Disney is in charge of promotion and distribution and Pixar is mainly responsible for production and technology improvement. With mergers and acquisition (M&A), the two companies now can share resources while maintaining each specialty. In China, due to the fact that most animation companies are small, lacking experiences, joint development, and participating in collaborative project provide opportunities to grow. With the Chinese government issuing supporting policies for the animation game industry, there are more than 70 industry clusters throughout China at this time providing a platform to share resources.

Regarding the growth of the companies, one of the issues emerging from in-house operations into the inter-firm network is the trusting relationship. In fact, the sustainability of business increasingly relies on long-term trust. Here it is argued that the sustainability of firms is not just predicted in contracts but in trust issues (Aras & Growther, 2007). Trust is not just a marketing or public relationship issue, but can be regarded as a type of value embedded in an organization. It should also be treated as intangible asset which helps firms to win customer order, reduce risk, achieving technology advancement and developing competitive advantage in a sustainable way.

Although trust may have different meanings, it is generally believed trust is an integral part in supply chains and alliance networks. In fact, it is believed that “virtually every commercial transaction has within itself an element of trust, certainly any transaction conducted over a period of time. It can be argued that much of the economic backwardness in the world can be explained by the lack of mutual confidence” (Arrow, 1972, p. 357). On an inter-personal level, trust can be seen as friendliness, kindness, and openness to different ideas. On the inter-firm level, trust can be extended as responsiveness, caring, willingness to share and competence of co-development. Effective communication is important in forming trust, especially in a cross-cultural context. As the world is witnessing a large scale of internationalization and globalization, understanding of different cultures – as values and norms shared among a group or organization – is essential to business success and sustainability. Sometimes misunderstanding of different values can result in distrust, reputation risk, inefficiency, and thus results in business failure.

Another issue associated with inter-firm trust is cultural difference, especially between the East and the West. Many firms are now involved in cross-border collaboration in today’s globalization. For one thing, firms can have access to a variety of knowledge and resources, reaching new markets. Additionally, different values and attitudes can result in misunderstanding, and thus make the relationship more vulnerable than collaboration domestically. China, the world’s largest emerging economy, is playing a more active role in terms of internationalization. However, how to understand Chinese culture, and thus do business in China remains difficult for many western companies.

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