To facilitate your understanding of cross-cultural management you will undertake your own research and write a research report.
You will choose a Company. You will briefly describe their business and decide which new foreign country this company should expand to.
Choose a foreign country with a culture that is significantly different from that of the company’s home country. This foreign country must be attractive enough for the company to enter and overcome the significant cultural differences.
Please choose a country which you can find on the Hofstede’s website (https://www.hofstede- insights.com/country-comparison/) In your report, you will analyse various management challenges that may emerge due to cultural differences. This should include leadership, staff handling, communication with various stakeholders, ethics, negotiations with stakeholders, marketing, etc.
You must apply various concepts and theories, such as Hofstede’s cultural dimensions, Trompenaar’s cultural dimensions, etc.
Overview of Foodland Supermarkets and its organizational culture
The primary purpose of the paper is to provide information regarding the Foodland Supermarkets. This firm is present in the concerned market segments of Australia and they are trying to enter into the Chinese market. Therefore various management issues are faced by the Foodland Supermarket while entering into China due to the cultural differences and these issues will also be discussed briefly in this paper. In addition proper modes of entry of entering this firm in the Chinese market will also briefly discussed in this paper. It has been seen that the supermarket faces various challenges due to the cultural differences of Australia and China. The issues are mainly related with the managing the staffs belonging to the diverse culture and also various management problems. The communication issues are also present in this supermarket mainly due to the diverse culture of the employees that belongs to different countries, Australia and China. Also, effective solutions to all these issues will be provided throughout this paper. Furthermore, the use of various theories are useful for determining the cultural dimensions and these theories will be further explained in relation with the business procedure of the firm. Moreover, some vital recommendations will help Foodland Supermarkets to reduce their cross-cultural problem while doing business in the overseas market.
Foodland Supermarkets is one of the fastest growing firms of Australia, and they primarily serve over 120 locations and is one of the largest supermarkets throughout the world. Different shops and stores of Foodland are independently owned and operated by the directors of this firm. The company mainly provides food, groceries, and drinks of all brands and thus it is considered to be one of the best supermarkets in Australia (Foodland, 2018). The organizational culture of this firm is entirely different, and employees have a mutual understanding with each other regarding the work-related matters. Some issues are present regarding salary and wages because the payment procedure gets delayed due to internal problems within the workplace.
The Foodland Supermarket is planning to expand their business in China, and for developing their business, it is essential to know culture and tradition that exist in china. It is found that China comes first regarding its population and therefore the country has a different cultural background (Radford, 2016). The diverse cultures are mainly based on various factors like food style, religion, language, music and so on. The Chinese people are mainly fond of ethnic and diversified foods and thus Foodland Supermarket will help these people to get fresh food and drinks from their shops.
The method of entry which should be followed by the Foodland Supermarket of Australia to enter into the China market is “franchisee”. Franchisee is defined as the process of selling the products or services under the name of other firm called the franchisor (Malek, Umberger, & Rolfe, 2018). It is noted that franchisee modes of entry can help this Foodland Supermarket to easily establish their brand in the Chinese market. Through this mode of entry, the firm can easily distribute their surplus to entire market segments. In other words, it is a less costly approach, and by using this mode of entry, Foodland Supermarkets can easily get success throughout the China market segments. Besides this, the use of the franchisee mode will help the firm to easily highlight their brand within the new market, and therefore it will build a strong control of the supermarket over the concerned markets in China. Apart from this, with the help of through this franchisee mode of entry the supermarket can easily develop their stores in China by having collaboration with other leading companies in the market. Moreover, the Foodland Supermarket can easily open their stores through their own sole proprietorship and thus it will help the firm to build independent shop with little support from the other party. Besides this, the other party, who will take the franchisee to run the business of Foodland Supermarket will also help this international firm to settle their shops in such markets of China. Furthermore, the business will get various opportunities to increase their market share. Different locations will be selected by Foodland Supermarket to open more number of stores. Therefore it is clear that with the help of this franchisee mode the Foodland Supermarket can easily open stores in the market of China.
General description of China and its culture
The findings evaluates the fact that Foodland Supermarkets is looking forward to start their business in different market segments of China, and as the culture of this country is different, therefore, some management challenges will occur due to cultural differences (Mueller, Diehl & Terlutter, 2015).
Challenges in managing the team- One of the major challenges that may be faced by the firm is managing a team of the diverse workforce. It is found that the Chinese employees may respond best to the firm’s loyalty as well as prestige, whereas Australian employees may be seeking opportunities for compensation and personal development (Birch, Bonney & Murray, 2014). Therefore, it becomes difficult for the leaders to manage employees coming from different background. Another management problem that may be witnessed by the leaders as well as the managers of Foodland Supermarkets is managing their staffs. As the firm’s home country is Australia and the firm is going to develop their business in China, therefore, a language barrier will be present in between the employees, customers and the managers.Hence, it builds problem to understand each other’s thoughts as well as feelings, and thus it becomes difficult for the managers to handle their staff that mainly comes from diverse culture.
Problem in communicating with the workers of different culture-Another critical issue that may be faced by the management team due to cross-culture is to understand the communication style of employees belonging to different cultures. It is seen that for most people of Australia, the communication approach is open and precise and more emotional and hence they are considered as direct communicators (Wei, Zheng, Liu & Lu, 2014). On the other hand, the communication approach of most of the Chinese people is not often explicitly stated, and they react according to the information provided, and hence they are called subtler communicators. From this, it is clear that due to their different communicational approach it becomes difficult for both the employees of Australia and China to communicate easily with each other. Due to this reason, it becomes difficult for Australian employees to convince the Chinese people to buy their food products from the firm (Groves, Feyerherm & Gu, 2015). In other words, not obeying the workplace ethics is considered as one of the vital challenges which occurs due to the cultural differences between two countries. It is seen that the Chinese people often work hard to achieve their goals and also motivate other people to work harder whereas the Australian employees work only for certain period of time and hence it causes difficulty between the workers of both countries.
Management issues- In other words, it is identified that crucial differences between employees belonging to different cultures can also vary in their attitudinal context. The differences are mainly found in their workplace confrontation by assuming working hours as well as rules and regulation (Masso & Vahter, 2015). Hence these differences between different cultured employees may give rise to huge management issue in the Foodland Supermarket. For diminishing this management issues, a proper strategy should be applied so that they can easily solve their problems in the upcoming days. It is evaluated that the firm faces problem in managing their employees belonging to the diverse culture and for diminishing this issue a leader or a manager of the foreign market should be appointed by the firm who retains excellent knowledge of both the cultures (Bird & Mendenhall, 2016).
Modes of entry used by Foodland Supermarkets
In other words, the top management team should have to provide proper commitment to the diverse staff about their job roles as this will build their trust over the manager and by this way management can easily manage their staffs. Beside this, another solution of management issue is that, manager or top-level officer as well as Australian employee, always have to understand the differences in cultural values of these Chinese people. After understanding their cultural differences, it will become easier for the Australian employees to reduce the gap that exists between them. Hence it will also enable the Chinese employee to build a strong relationship with their employees, and thus their communication problem will reduce a lot (Sackmann, 2015). Also by developing effective communication style by the employees, will enable them to understand the cultural aspect of both countries and this will help the employees to maintain ethics within the workplace. Hence by applying this method, it will help the Foodland firm to diminish their management issues that frequently occurs due to cultural differences of both countries.
The various theories that should be applied by this Foodland Supermarket to determine the culture of different countries are as follows:
- Hofstede’s cultural dimensions:The theory of greeting Hofstede states that culture is often considered as a source of conflict rather than synergy (Dietz et al., 2017). The cultural differences are regarded as the nuisance at best and often a disaster. To explain the theory, Hofstede used five cultural dimensions, and these are power distance, individualism vs. collectivism, long-term vs. short-term orientation, uncertainty avoidance and indulgence vs. restraint
- Trompenaar’s cultural dimensions:This dimension is developed by Fons Trompenaar’s that helps a firm to understand the differences between various cultures in an effective manner. To determine the differences in people from one culture to another, Trompenaar's and Hampden-Turner used seven cultural dimensions. The cultural dimensions are universalism versus particularism, neutral versus emotional, specific versus diffuse, achievement versus ascription, internal direction versus outer direction, individualism versus communitarianism and sequential time versus synchronous time (Mazanec, Crotts, Gursoy & Lu, 2015)
The paper concluded that the Foodland Supermarkets of Australia is planning to start their business in the overseas market of China and for this reason they have chosen the “exporting” entry mode to enter into the Chinese market. This supermarket provides fresh local food and all range of groceries to their customers to maintain a good position in the market. Also, it is noted that many challenges have been faced by the firm in their management procedure and for diminishing these problems proper strategy should be applied by the firm. Moreover, the Hofstede and Trompenaar's theory of cultural dimension also helps the firm to understand the differences between both cultures in an effective way.
- It is recommended that proper training should be given to the Chinese employees so that they clearly understand the organizational culture of this Foodland Supermarkets
- It is strongly recommended that managers need to arrange meetings with the diverse group of employees, then it will build good communication between them
- In order to enhances the communication approach between the employees belonging to different culture it is necessary for the manager to communicate easily with their juniors so that their hesitation or fear of talking will decrease
- It is also recommended that in order to decrease the management issues, the management team will appoint a leader that have knowledge about handing the employees belonging to different culture. Therefore, with the help of these employees the management team can easily decreases their issues in future
- It is recommended that for maintaining the team of cross-cultural workers it is necessary for the firm to appoint a manager that have proper experience of handling other cultural staffs in the particular workplace. Moreover, it is important for the employees to follow the rues and regulation of the firm as it will help in improving the overall brand image of the firm in front of the concerned customers.
- The selection of the location becomes very crucial as in enhancing the overall effectiveness of the entire business processes. The Communication processes throughput the concerned workspace needs to be enhanced with proper techniques as it will help in reducing any type of miscommunication or errors within the workplace among the employees.
- On the other hand, the collaboration with the desired working partners should be done with great effectiveness as it will help in bringing more customers to the firm. The message of respective each other’s culture needs to be communicated across the workplace among the employees as it will help in establish the business with franchise mode of entry.
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