Communication across cultural barriers to internationalization between Sweden and Japan : A Case Study of HMS Networks AB

In the globalized economy, internationalization is necessary for companies to have a competitive advantage to survive in the long term and Swedish companies are no exception. However, when Swedish companies enter Japan the cultural differences between the two countries are significant, which may create cultural barriers. There are few cross-cultural studies focusing on communication across cultural barriers that foreign companies face when entering the Japanese market. Also, the research is conducted from a one-way perspective, with less focus on the perspective of the Japanese counterparts. The purpose of this thesis is to identify what cultural barriers a company, with Sweden as the home country, has encountered under the internationalization process when entering Japan from both a Swedish and Japanese point of view. In the qualitative research approach, the empirical data was collected through semi-structured interviews with the employees in a Swedish company HMS Networks AB (HMS), which has internationalized to Japan and has a subsidiary HMS Industrial Networks K.K. in Japan (HMS Japan). These findings were also complemented with secondary data such as corporate websites and annual reports. The empirical data were analyzed into three steps: transcription, systematization, and combination. The results showed that HMS has faced internal and external cultural barriers during the internationalization of the Japanese market. The differences in work culture, language, business relationship created cultural barriers and influenced the communication within and outside of the company. There were more internal cultural barriers than external ones, which has decreased over time, resulting from Japanese society becoming more international and Swedish companies adapting appropriately to Japanese culture. This research thesis will be a tool for creating a deeper understanding and communication of two different cultures. First, language is the most significant cultural barrier to entering foreign markets. Therefore, it is crucial that the company itself provides an opportunity to learn a language for employees. Second, it demonstrates the importance of deepening the understanding between the parties. International companies should not try to change foreign employees’ way of being but instead consider both cultures and implement a common foundation. Third, it is essential to keep in mind that it takes time to overcome cultural barriers. Also, when a company internationalizes, cultural barriers may occur from both sides of countries, and they may be interpreted differently in the same situation. Thus, understanding how the other party interprets your culture is important, which will help to reduce cultural barriers