Cross-Cultural Management of Tesco in India - Essay Example

Research on TESCO’s international project India: To assess the cultural compatibility of the partners for the strategic implementation of the projectTable of Contents Table of Contents 2 Introduction 3 Cross-cultural management 3 Cross-cultural differences 5 Cultural overview of India and United Kingdom and its impact on TESCO’s project 7 Importance of training for employees of TESCO 9 Training for host-country employees 9 Training for expatriates 9 Conclusion 10 Reference List 11 Bibliography 13 Introduction The research paper focuses on studying the cross-cultural differences and significance of cross-cultural management in TESCO for strategic implementation of its project in India. TESCO is one of the leading retailers of grocery and general products of United Kingdom. Earlier in 2013, TESCO had entered into joint venture with China Resource Enterprise Ltd. (CRE), where TESCO has 20 percent stake and CRE has 80 percent stake (China.org.cn, 2014). As foreign direct investment has been allowed in retail industry in India, TESCO has shown its interest in opening a multi-brand store here in collaboration with Tata group. The various segments of this research paper comprise a brief study of cross-cultural management, impact of cultural diversity on international firms and a relevant analysis of cross-cultural scenario related to TESCO’s store location, possible conflicts and methods of resolving. Cross-cultural management In the contemporary business world where every organisation wants a global presence, cultural variation is no more a new aspect. Cultural diversity in terms of behaviour, language and communication is observed in different areas of management (Kottak, 2011). This cultural variation stems from the involvement of employees with different cultural backgrounds (Triandis, 2001). Multi-national companies are currently expanding to as many countries as possible and this has brought cultural differences in the workplace (Chevrier, 2003). For a management to operate successfully, it is necessary that the workforce interact with each other without considering background, religion, cultural and linguistic differences. This is why a number of multi-national companies with workers from different parts of the world are working successfully in Middle East and western countries (Kawar, 2012). However, there are examples of failure of multi-national companies such as, Nestle, who was unsuccessful to sell baby food in impoverished market of Africa because their assumptions went wrong (HSBC, 2012). To understand the concept of cross-cultural approach, it is important to understand the term ‘culture’. One’s culture is inculcated since childhood as a result of influence from parents, family members, teachers, playmates and neighbourhoods (Harrison and Huntington, 2000). Culture is an integration of values, tradition, ethics, language, religion, life style and verbal and non-verbal expressions. It conditions one’s intellect and behaviour pattern. Culture is classified as generic culture and local culture. While local culture is a set of specific norms followed among members of a social group; generic culture defines the culture of human beings as a whole. Culture helps in shaping one’s survival strategy in critical condition (Harrison and Huntington, 2000). Since TESCO is a British company and wants to initiate its business in India, it is important for the company to understand Indian culture. India is a diversified country with cultures varying from one state to another. Hence, TESCO must begin with focusing on the culture of Maharashtra and Karnataka. In a culturally diverse country like, India, the cultural factor works at different levels (Ely and Thomas, 2001): National level: Different social groups have their own culture, but these are often different from national culture of the country. The national culture encompasses common cultural activities that are accepted nation-wide. Organisational level: Every organisation has its own culture. Some firms follow formal cultural environment, whereas others follow the informal approach. Organisation cultures differ from one organisation to another and are manageable to a certain extent. Occupational level: Culture specific to an occupation lies between national level culture and organisation level culture. Every occupation has a relative set of culture. For example, a teacher follows relationship oriented approach, whereas a factory supervisor follows task oriented approach. Gender level: In many countries, culture can be gender specific, which implies that approach of a man towards a specific work needs to be different from that of a woman. The gender level culture is highly influenced by the national level culture (Harrison and Huntington, 2000). Cross-cultural differences Studies by socialists suggest that difference in perceptions about culture promotes cultural differences in organisations. Cross-culture difference is not similar to cross-culture conflict; it is more about differences between view point of two or more culturally diverse individuals (Hofstede and McCrae, 2004). According to the authors, cultural difference can be exhibited in a number of ways. In some culture, effort of an individual is given more importance over that of a group. Some cultures express that there should be an unequal distribution of power. Moreover, in few cultures, women are provided with less power to operate with. Therefore, different cultures have separate perspectives. From TESCO’s research point of view, the firm needs to identify various cultural factors associated with the two states in order to reduce cultural difference, right from inception. One of the most important theories in the field of cultural differences is “Five Culture Dimensions” theory by Professor Greet Hofstede. The professor suggested that there are five dimensions that explain the cultural differences among different countries. These dimensions are (Hofstede and McCrae, 2004): Power distance: Power distance is defined as the degree to which less influential members of an organisation accept and want the power to be in hands of the most influential members there. This dimension explains that unequal distribution of power is more desirable to lower level members of the organisation, as that in a family. Uncertainty avoidance: Uncertainty avoidance explains a society’s viewpoint towards uncertainty. It determines the society’s tolerance level to sudden unexpected situations. This dimension tries to find out the extent to which culture can influence someone to be either relaxed or stressed in unstructured circumstances. As per Hofstede, uncertainty avoiding cultures set strict rules and regulations to avoid unexpected situations and conditions and are usually emotion driven individuals. On the contrary, uncertainty accepting societies are more tolerant towards unexpected situations, suggestions and behaviour. Individualism: There are societies driven by culture that give priority to either individualism or collectivism. Individualism is where an individual prefers to stay alone, with no interest towards being connected to society; while collectivism is defined by strong bond among individuals living in a society. In collectivism, people regard society that they live in as extended families with unquestioned loyalty and protective feeling. Masculinity: A certain number of societies are driven by the fundamental issue related to genders, that is, masculinity and femininity. While across different cultures, women’s value is almost similar while that of men differs. In almost all cultures, women are generally considered from caring perspective, while men are treated as more competitive in some cultures than others (Wood and Eagly, 2002). Long-term orientation: Culture with long-term orientation cultivates practical value among individuals so that they can adapt to changing environment. However, short-term oriented cultures prefer to strengthen and preserve social norms related to past and present; such cultures are more conservative in nature (Hofstede and McCrae, 2004). All these dimensions are demonstrated in every culture at a certain degree and have a profound impact on followers of the culture. Cultural overview of India and United Kingdom and its impact on TESCO’s project The cultural heritage of India is vast and rich. The intangible heritage of India comprises large collection of music of different genres, writings and painting from different regions, performing arts, dance style, folk tradition, theatre and rituals (National Portal of India, 2014). Indian culture is well-diversified and colourful. Indian monuments, literature and art depict different periods from the history and explain the roots of Indian culture. For ages, the tradition of joint family system has been prevailing in India. In traditional families, women are meant to take care of other family members and oversee household needs; while men are expected to work and earn bread. However, in contemporary world, such beliefs have become archaic and both men and women work together to provide for their family. Being a culturally diverse land, the number of languages spoken, religions practiced and festivals celebrated is large by number in India. While greeting and welcoming someone, it is a very common cultural practice among Indians to press hands together and greet with a smile, followed by a hug at times. Indian culture gives a lot of preference to relationships and emotions (National Portal of India, 2014). The British culture is quite contrasting to Indian culture. Most people of the UK are Christian by religion and English is the main language spoken along with other languages. Most families in UK are influenced by the concept of ‘nuclear family’ with parents and one or two children. In British families, men and women have equal authority (Christopher, 2002). In UK, people are very focussed about time and always try their best to not waste even a second. British individuals are task-oriented by nature. The British follow a culture of brief ‘hello’ and handshakes as a part of greeting. The British are usually very polite and formal in terms of behaviour (Morley and Robins, 2001). Study of both the culture shows that the cultural point of view of both countries is quite different. Hence, to start-up business in India, TESCO have to undertake research related to work and general culture that prevails in Maharashtra and Karnataka, since regional culture also varies from state to state (Budhwar and Varma, 2011). The firm need to take decision related to ratio of employees to be hired from India as well as from UK. Following that, the firm needs to decide upon the kind of organisational culture that would be preferred in its store (Johnson, Lenartowicz and Apud, 2006). Since India is a country that values relationship more, it is suggested that a relationship oriented approach should be adopted. The most important part of the project shall be the training that is required by both host country based as well as home country based employees (Forster, 2000). Importance of training for employees of TESCO Training for host-country employees TESCO is an international company and it is quite obvious that its work culture will be influenced by different cultures, even if the impact is very little. Hence, in order to improve quality of work environment, the foremost training that Indian recruits need is cross-cultural training so that they understand the importance and foster respect for different cultures as well as feel comfortable in a culturally diversified work environment. Such training plays an important role in reducing cultural biasness and conflicts (Gelfand, Aycan and Erez, 2007). Another important training is to impart verbal as well as non-verbal communication training. Although the present official communication language for every multi-national company is English, certain non-verbal expression and gestures are considered inappropriate in some cultures. The main purpose of communication training is to educate employees about the acceptable and non-acceptable behaviours (Littrell and Salas, 2005). Training for expatriates Expatriates are those individuals who shift their base from home country to the host country for operation purpose. Expatriates are provided with pre-departure and post-arrival training related to the foreign land. They are provided with informal briefing associated with factual description of location, transport facilities, living and working conditions and a general over view of the culture (Littrell and Salas, 2005). Since it is more difficult for an expatriate to adjust in the host country, they are often trained using scenarios, simulations and workshops. A few training methods like, experiential training, cultural awareness training, language training and attribution training, are considered very important for expatriates (Hånberg and Österdahl, 2009). These trainings assist them to acquire knowledge about location, local language and local culture and help them to act as a host national. Conclusion In conclusion, it has been found that every company worldwide considers cross-cultural approach as an important aspect of its management. As foreign direct investment avenue in the Indian retail industry has been opened, TESCO is interested in launching its multi-brand store in Maharashtra and Karnataka. Yet, it is concerned about cross-cultural issues. The research paper explains various cultural factors associated with cross-cultural management in context of TESCO. The theory of “Five Cultural Dimensions” has also been explained to present various dimensions that influence any culture. In addition to that, the paper presents description of Indian and British culture as well as the cultural difference. Since TESCO is an UK-based global retailer, it needs to impart appropriate training to employees from both host and home countries. TESCO also needs to deploy proper management system in order to avoid conflicts and facilitate clear flow of conversation. Reference List Budhwar, P. S. and Varma, A., 2011. Doing business in India: building research-based practice. United Kingdom: Routledge. Chevrier, S., 2003. Cross-cultural management in multinational project groups. Journal of World Business, 38(2), 141-149. China.org.cn, 2014. Tesco, CRE to form retail joint venture. [online] Available at: [Accessed 29 April 2014] Christopher, D., 2002. British culture: an introduction. United Kingdom: Routledge. Ely, R. J. and Thomas, D. A., 2001. Cultural diversity at work: The effects of diversity perspectives on work group processes and outcomes. Administrative Science Quarterly, 46(2), pp. 229-273. Forster, N., 2000. Expatriates and the impact of cross‐cultural training. Human Resource Management Journal, 10(3), pp. 63-78. Gelfand, M. J., Erez, M. and Aycan, Z., 2007. Cross-cultural organizational behavior. Annu. Rev. Psychol., 58, pp. 479-514. Hånberg, C. and Österdahl, G., 2009. Cross-cultural training of expatriates. [online] Available at: < http://www.diva-portal.org/smash/get/diva2:227437/FULLTEXT02> [Accessed 29 April 2014] Harrison, L. E. and Huntington, S. P., 2000. Culture matters: How values shape human progress. New York: Basic Books. Hofstede, G. and McCrae, R. R. 2004. Personality and culture revisited: Linking traits and dimensions of culture. Cross-cultural research, 38(1), pp. 52-88. HSBC, 2012. 10 biggest overseas blunders. [online] Available at: [Accessed 29 April 2014] Johnson, J. P., Lenartowicz, T. and Apud, S., 2006. Cross-cultural competence in international business: Toward a definition and a model. 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