Cross cultural management - Essay Example

Tesco plans to penetrate the Indian market through Tata’s Trent Hypermarket Limited. To understand possibility of success of the joint venture, the paper will provide analysis of national and organizational culture in India and use international joint venture theory and Trompenaar’s model of differences in culture. Foreign investment is one way that multinational companies expand their operations with intention of maximizing profits. While some have succeeded in raising their profit margins, some multinational companies have failed to realize that cause and considered withdrawal.

Multinational companies also use foreign investment as an opportunity to popularize and familiarize their products in the rich global market (Hatten 2012, pg. 27). To enter a foreign market, multinational companies have employed various strategies that include foreign direct investment, acquisition of foreign-based business and partnership. Cultural barriers and differences between the home and foreign market constitute one of the greatest challenges faced by most multinational companies seeking to invest in the countries.

Harmonizing, adapting home, and foreign culture have proved a hurdle to some companies, which has led to poor performances in the target markets. Tesco is one of the multinational companies that currently target the Indian market. In fact, Tesco has succeeded through all the processes and is ready to begin its operations in the Indian market. Tesco is the first multi-brand handler to succeed in penetrating the Indian market. This has been due to the recent review in Indian foreign investment law that barred multi-brand companies from sourcing supplies from their foreign-based markets, but instead collaborates with Indian local manufacturers to supply goods.

The review of the law now allows liberal ground for foreign multi-brand handlers to source supplies from their