Case : Edificio España

Case 4: Edificio España

Name:                  Clara Mazzanti Jovicevic

Student number:        500753830

Date:                        March 22, 2020

Lecturer :                Ms. Andreia Carita

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Table of contents

1.        Introduction        3

2.        Problem statement        3

3.        Case analysis        3

4.        Alternatives and Recommendations        4

5.        Personal experience        4

Bibliography        6

1. Introduction

This case will analyse a situation in which a wealthy Chinese businessman named Wang, who owned companies and property all over the globe, acquired one of the oldest buildings in Spain in order to transform it into a lucrative space to be used for different businesses. When he arrived in the country to settle negotiations, he was faced with different complications due to cultural differences. These will be analysed in this case through the application of various cultural theories and then, alternatives and recommendations will be provided as to how the situation could have been tackled differently.

1. Problem statement

As mentioned in the previous paragraph, after acquiring one of the oldest buildings in Spain, Mr. Wang was faced with many unexpected challenges and complications upon his arrival in the country. His plan was to renovate the building entirely however, this proved not to be as simple as he thought it would be. Mr. Wang lacked awareness about the Spanish business culture and had limited information about the different regulations, and legislations that were in place in Spain as well as all the different parties (political and not) that that had the power and authority in allowing to decide what to do with the building. Because of how difficult the situation turned out to be, he thus struggled to decide whether it was worth fighting for the building or just avoid all the hassle of trying to reach an agreement and simply sell the building

1. Case analysis

It is crucial to build mutual understanding and trust, especially when doing business with someone from a different culture than yours. In the Edificio España article, two main cultures can be identified: the Spanish and the Chinese Culture. These two cultures are contrasting ones in many ways and these differences will now be analysed in reference to the case, through the use of various cultural theories. One of the theories that can be applied is the theory on hierarchical corporate structures vs egalitarian ones (Meyer E. , 2014). Although both the Spanish and the Chinese appear to be on the right side of the spectrum, the former is relatively more egalitarian than the latter. In this case, Mr Wang believed he would have full power, authority and control over the building once he had acquired but this proved not the be the case because once he arrived in Spain, there were many parties including the NGO, local councils and several political persons who all had to agree with the type of renovations to be made to the building (Meyer E. , 2014).Thus, Mr Wang was not accustomed to the different management approach that he encountered in Spain and while he was in China, he was probably used to having all the responsibility and the possibility of making decisions by himself for his businesses, without having to make agreements with other parties.

Another cultural theory that can be applied to the case is the dimensions of cultures by Geerte Hofstede. One of these is power distance which is defined as “the extent to which the less powerful members of institutions and organisations within a country expect and accept that power is distributed unequally” (Hofstede, 1984) . This concept is strongly linked to hierarchy vs egalitarianism. Whilst he was in China which is a country that scores high in terms of power distance, Mr. Wang was probably used to making all decisions for his business without having to consult anyone, and was treated on a pedestal by his employees or those in inferior positions to him.  Having all this power and wealth and being of such importance in China, made it surprising for him to see how different things were on the different side of the globe (Hofstede, 1984).

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