● New Zealand and Chinese businesses in partnerships may experience tensions over sustainability objectives and how to achieve them, but managing these tensions well can strengthen the partnership.
● A study of 16 relatively large New Zealand and Chinese business partnerships examined their experience of sustainability tensions and identified a four-step approach to managing them, including opening, surfacing, collaborative and synergistic strategies.
● The study by Dr Sitong Chen, a lecturer in sustainability at the University of Auckland Business School, and Professor Gabriel Eweje, formerly Professor of Responsibility and Sustainability at Massey University, and now at Edith Cowan University in Perth, is reported in their paper Managing tensions in sustainable development in Chinese and New Zealand business partnerships: Integrative approaches.
● Dr Chen talked to The Context: Asia-Pacific about what New Zealand-China business partnerships can learn from the research.
The question of sustainablity in partnerships
Dr Chen has always considered sustainability fascinating. Her experience working in both the academic realm and the corporate world fuelled her interest in how businesses—specifically those in partnerships—collaborate on achieving sustainability goals.
Dr Chen is also a member of the Auckland Business School’s Circular Economy in Business (CEBUS) Beacon. While she has broad research interests in sustainability, including the circular economy and responsible innovation, her recent focus has been about helping Chinese and New Zealand organisations manage tensions arising from sustainability.
Her interest in this area was especially piqued when the joint venture between New Zealand’s Silver Fern Farms and China’s Shanghai Maling was announced in 2016. And while sustainability is a key focus for many companies today, New Zealand-China business partnerships raise many complex issues which make for interesting learning.
“The partners are influenced by their different cultural backgrounds, and the different regulations surrounding sustainability at the organisational and national level,” says Dr Chen. “There will be challenges, and that’s where the tensions arise.”
In her research, Dr Chen interviewed managers, senior managers, directors and executives of New Zealand and Chinese firms who have been partners for anywhere from a year to 15 years. The firms show a diverse picture of China-New Zealand partnership—from appliance manufacturing, aviation, dairy and farming to health and safety and telecoms.
Dr Chen wanted to know how these businesses dealt with tensions. Did their sustainability goals clash? What tensions arose from managing these differences? What strategies could companies use to mitigate these issues? Her interviews with the firms answered these questions and lit up pathways for similar partnerships to follow.
Tensions in sustainability: profit vs planet
What kind of tensions did Dr Chen find in her interviews? At their heart were issues of profit versus environment, and the short-term versus the long-term. The New Zealand firms tended to aim for more balance between financial and environmental performance, while their Chinese counterparts leaned more towards profit.
Tensions especially featured in new partnerships, where companies wanted to address financial issues and shareholder interests before bringing sustainability to the table, according to Dr Chen. “As a result, those sustainability tensions are neglected and put aside for later review. They’re viewed as having secondary importance,” Dr Chen says.
The long-term view was also a source of tension, especially where New Zealand companies wanted to consider the long-term benefits of sustainability goals while their Chinese partners prioritised short-term profits. But it was not always the Chinese partner prioritising the financial standpoint. One interview told of tension over job losses caused by closure of part of the business. In this ‘moral’ rather than environmental issue, it was the Chinese partner wanting to delay closure for the sake of people’s jobs.
For Dr Chen, of most interest was how the businesses worked through these tensions and found solutions and even a stronger partnership.
A path to strength and success
Managing tensions around sustainability is integral to the success of a business partnership, says Dr Chen. “Going through those difficulties could develop mutual trust over time.”
“Some companies in partnership for longer periods even use those tensions in sustainability as a creative tool to strengthen their partnership and have proactive outcomes.”
Such strengthening work is especially important now as New Zealand-China ventures increase, following the 2008 New Zealand-China Free Trade Agreement, resulting in China’s first free trade agreement with a developed country. Since then, trade between both countries has flourished, with China continuing to be New Zealand’s largest market for exports and biggest source of imports. “This provides great opportunities for New Zealand and Chinese companies to do business together,” says Dr Chen.
Another motivation for businesses to work on attaining sustainability together is the increasing number of consumers willing to pay for goods made from sustainable sources and produced by sustainable brands.
“Sustainability achievements builds up their reputation from a consumer’s perspective and will help them gain financial success as well,” Dr Chen adds.
Strategies to manage tensions around sustainability
Dr Chen’s research paper proposes that New Zealand-China business partners can manage sustainability tensions through an approach consisting of four strategies: opening, surfacing, collaborative and synergistic.
Opening strategies involve dialogue and transparency around sustainability issues and tensions. “Both parties need to sit down and talk, and they need to be honest and open with each other,” says Dr Chen.
After talking through these tensions, comes surfacing strategies, which foster an atmosphere of creativity and innovation, enabling companies to generate more options and better ideas to achieve sustainability goals. Firms can see tensions as a source of solutions rather than problems that impede effective decision-making.
“Companies shouldn’t repress those tensions or avoid or neglect them. Instead, they should encourage those tensions, ‘surfacing’ them on the table to find the best ways to address them,” Dr Chen says. “And they shouldn’t view them as conflicting and opposing but as complementary elements, which one side could facilitate with the other.”
Once the tensions have surfaced, business partners need to then work through them with the help of collaborative strategies. According to the research, both parties need to jointly tackle each side of the sustainability tensions. Importantly, they also need to work with external stakeholders.
For instance, some Chinese and New Zealand partnerships in the study consulted and collaborated with independent organisations, local government and NGOs that had more knowledge in certain sustainability practices.
“They need to engage various stakeholder groups—even academics in universities or sustainability consulting firms—that could best help them address those issues,” says Dr Chen.
Finally, business partners can adopt synergistic strategies to look for connections between opposing sustainability demands. To find these connections, the business partners can use a linking mechanism such as a liaison. “These people act as a bridge between both parties,” Dr Chen says.
“The businesses need people in the middle who know both their cultures, languages, values and how each business thinks, and then braid them all together to arrive at a balanced solution for both parties.”
Dr Chen is quick to point out that these strategies should not be generalised into other contexts since the research is focused on large multinational companies in China and New Zealand. “But smaller companies and other practitioners can refer to these strategies and see if they could adopt them and use them in real business activities,” she adds.
Dr Chen plans to continue delving into partnerships between businesses in the two countries—this time examining how they coped with tensions during and after the COVID pandemic. She hopes to gain insight into what helped companies manage tensions in those difficult periods, and convert her findings into reports, seminars and workshops that can benefit New Zealand and China business partnerships.
* Quotes in this article may have been edited for clarity and brevity. The views expressed in this article do not necessarily represent the views of the Centres of Asia-Pacific Excellence.