Obviously, China and Sweden have di

Obviously, China and Sweden have different cultures, through Hofstede’s national culture dimensions the cultures score differently (See in Appendix I). Lee, Roehl, and Choe (2000) emphasize that national culture, as an attribute of the country will influence a national management system. Ouchi (1977) argues that communication system of an organization is influenced by the structure of the organization. Structure as the hardware (Rausch, Halfhill, Sherman & Washbush, 2001) of organization is built based on the particular circumstances and situational variables (Burnes, 1996). Along with the development of company and the enlarging of size of company, the hierarchy level will increase correspondingly (Ouchi,1977). Both Swedish parent company and Shanghai subsidiary company are medium sized companies. In the interviews the authors find that the structure of two companies to some extent has hierarchy levels. However, in both Swedish managers’ and Chinese managers’ points of view Swedish parent company’s hierarchy level is lower than that of Chinese subsidiary company (see Appendix II and Appendix III). One of the most important reasons of this phenomenon lies in the difference of power distance in Sweden (31) and China (80) (see in the Appendix I).