Management of Tesco in India - Case Study Example

Tesco in India Table of Contents Table of Contents 2 Introduction 3 2. Discussion 4 2 Organizational Cultural Difference between the UK and India 4 2.2. Cultural Compatibility between the UK and India 7 2.3. Critically Evaluate Different Solutions / Impact to a Strategic Problem 8 3. Conclusion 10 4. References 11 5. Bibliography 16 1. Introduction In its recent strategic measures, Tesco has revealed its intentions to expand its business in India, after expanding its business network in approximately 12 countries, from around the world, Correspondingly, the proposal of joint venture made by Tesco, to penetrate India and open multi brand stores was readily accepted by Tata on the terms of a 50-50 partnership. Tesco thus plans to invest in the Tata’s Trent Hypermarket Limited, which is running the Star Bazaar and Star Daily within Maharashtra and Karnataka, two of the most important cities in India (BBC, 2013). Although at the primary level, the proposal seems beneficiary for these organisations, concerning the wide differences in the cultural dimensions of these two partnering countries, i.e. India and the UK, this merger can be subjected to massive cultural distortions (Gray, 2012). It is worth mentioning in this context that many companies had failed to penetrate and strengthen their foothold in their targeted market periphery owing to cultural disparities, if the history of internationalisation amid commercial organisations is to be studied (Ovcina, 2010; Lambin, 2007). With the suspicion that such hindrances may also inhibit the success prospects of the proposed joint venture between Tesco Plc, a UK based retail giant and Tata Group, another giant from India, this paper intends to implement particular models and theories to assess the cultural disparities persisting between the two nations (i.e. the UK and India). Correspondingly, the essay will aim at suggesting ways to mitigate these gaps and enhance cultural compatibility to promote success prospects for Tesco through its joint venture with Tata in India. 2. Discussion 2.1. Organizational Cultural Difference between the UK and India In the Indian culture, the level of significance delivered to the status of an individual. Un-equal rights amid the power-privileged are acceptable in this culture, wherein prominent hierarchical divisions are expected to determine the decision making structure within the organisation and the society overall (Schragle-Law & et. al., n.d.). On the other hand, the societal and the organisational structures followed in the UK, emphasise equality in gender division, status and responsibilities. When Indians are generally observed to value age as the measures for seniority and respect within the society, the UK society is observed to value individual contributions to the overall benefits of the community (within or outside organisation culture). Similarly, the UK society values fair participation of every credible member of the society in decision-making (Białas, 2009). Another important dimension of culture, which can provide apparent examples of differences amid India and the UK, is individualism or collectivism. Theoretically, individualism classifies the tendency of people to take care of themselves and their immediate family members. On the contrary, collectivism defines the belongingness of individuals within a society to take care of a group and grant importance to the interest of the group (Geert Hofstede, n.d.). Assessing this particular dimension in the context of Indian culture it can be observed that individuals in India deliver greater importance to mental support gained from the others in a group. In the Indian society, a group is always treated as a social family representing a strongly collective nature (Sarkar, n.d.). However, individual in the UK culture believes in the thought that the way to contentment is through individual achievement. In the culture of this country individualistic is in high preference zone (Donmez, 2007). Societal context in these nations can also be observed as strongly influenced by the thought of masculinity. In India, it can be observed that maximum work culture prefers to be masculine, especially in conditions of visual demonstration of achievement and authority. In this culture, it is a strongly believed that men should be hard-hitting, tough and women should be affectionate and modest, deciphering a significant degree of gender difference within the society. While British community believes in sequentially working and comprise an obvious performance to determine the responsibilities of individuals, giving insignificant attention to any classified gender roles as compared to the Indian society (Ohlsson & et. al., 2006). Again, when considering the dimension of uncertainty avoidance, it can be apparently observed that in India, people tend to resist change to the maximum extent deciphering a high degree of uncertainty avoidance in their work process. Consequently, people in the Indian culture tend to accept little imperfection in their daily life to avoid changes in accepting a new course of action expecting that the other party will change to cooperate and maintain the alliance (Samii & et. al., n.d). Contradictorily, in the work culture of the UK, the comparative degree of accepting uncertainty is higher. People in the UK society decipher minimum degree of insecurity being comfortable in uncertain situations and readily accepting changes in their benefit (Paszkowska, n.d.). Astonishingly, the level of pragmatism followed in Indian and the UK society do not differ, and thus, may have no credible role to play in differentiating the Indian society from that of the UK. Pragmatism indicates the tendency towards long-term direction. It is worth mentioning in this context that in India, religious and philosophical thoughts dominate the work culture with the thought of Karma. In the work culture of many eastern countries like India, they have immense acceptance of spiritual visions, motivating individuals to value long-run goals with greater importance, as compared to short-run value generations. Notably, countries with pragmatism, like India, naturally let off a lack of punctuality. In the similar context, although not motivated through spiritual beliefs, people in the UK society do not feel the necessity to give details about anything, as they consider that it is not possible to recognize fully the difficulty of life and thus, overlook short-term problems as well as gains in pursuit of long-term orientation goals (Pellow & et. al., 1995). Indulgence is another important aspect of culture. It defines the level to which people try to value their personal desires and gains in comparison to societal benefits or collective benefits. Comparatively feeble control on self-gain is called indulgence while a strong control determines the restraint behaviour of individuals, wherein they are willing to sacrifice their personal gains valuing group objectives more. Indian culture is not much strong in indulgence, which signifies that it is a culture of restraint or self-control. On the other hand, as the UK society deciphers a significantly low indulgence level, has a propensity to sarcasm and distrust. Moreover, the restraint culture do not put much stress on free time and manage the satisfaction of their needs. People with this direction have the awareness that their proceedings are controlled by the communal standard and believe that indulging themselves in something against the communal standards, will be somewhat wrong (Boopathi, 2014). On the other hand, people in the UK culture intend to release their wish and urge with regard to take pleasure in life and being entertained. They have an optimistic approach and have a propensity towards hopefulness. Moreover, they put a superior amount of significance on spare time unlike the Indian society (Korsakiene & et. al., 2012). 2.2. Cultural Compatibility between the UK and India Irrespective of these differences, it is worth mentioning that with rapid globalisation and westernisation of the Indian culture, these dimensions are gradually emerging as vague, transforming rapidly to a more uniform standard as compared to the Western cultures. It is based on this notion that the rising cultural compatibility between India and the UK society can be observed. From a generalised perspective, it was observed that in Indian culture, punctuality holds limited significance owing to the prevalence of pragmatism. However, with continuous developments in the labour market, under the influence of global competition, punctuality can be observed as an important facet in the organizational policies of Indian companies today. Correspondingly, while in the UK work culture, free time is important for an employee, the same policy may induce a better feel of satisfaction amid the workers in the joint venture of Tesco and Tata. Nevertheless, the company should be focused on maintaining its time efficiency when dealing with customers and pragmatism is notably high amid the customers when deciding upon their purchases. Besides, the average population in the Indian society is in their mid-twenties, who are also observed to emphasise short-term goals over long run benefits along with deciphering a lower degree of uncertainty avoidance, which can also be used to build cultural compatibility amid the two partnering countries. Contextually, Tesco can take the advantage of involving mid-aged managerial personnel to control operations in India, in alliance with Tata, given the fact that the UK firms are mostly handled by the mid-aged persons with the experience of ten to fifteen years who will also be readily accepted by individuals in the Indian society. The communication in Indian corporate culture takes an important part between the employees in addition to the deviation of work time/social time, which shall also form a base to develop cultural compatibility within the partners. Accent might emerge as a major problem widening cultural differences between the two partners when operating India, affecting the degree of cultural compatibility amid Tesco and Tata. This accent problem might further expand the communication gap and hence, should be considered with due significance when emphasising cultural compatibility (Upadhya & et. al., 2006; Chand & et. al., n.d.). 2.3. Critically Evaluate Different Solutions / Impact to a Strategic Problem Based on the above discussion, it can be observed that cultural differences hold immense importance in establishing a joint venture causing strong influences on its success potentials. Thus, it is important for both Tesco and Tata to evaluate the dissimilarities within their cultural domain prior to establishing the proposed joint venture. Notably, as assessed above, accent might evolve as a major disputable aspect for Tesco when intending to operate within India. Hence, communication should be give prime significance when commencing the operations of the joint venture. To mitigate such gap in communication and in cultural domains, Tesco can intend to involve cross-cultural advisors. Cross culture advisors will provide the apparatus and techniques to endorse staff mixing, which will decrease disagreements between employees and build the team strength amid the UK and the Indian employees (Caligiuri & et. al., 2005). To avoid the problems of different cultural environment, religion as well as values, and etiquette, an awareness-training programme will also be essential for the employees. Through such training employees can be introduced to the new country culture that will further facilitate their understanding about the market segment targeted for the joint venture. In precise, the training programme will be needed to provide the employees with all the knowledge required to satisfy the customers with the new brand and maintain a high degree of compatibility with the other culture, valuing organisational goals with greater significance. This will again encourage self-confidence amid the employees to deal with the people from different cultures without any misinterpretation of their behaviour and making the customer service a more efficient one (Bhawuk & et. al., 2000). Moreover, such training assistance can further assist in neutralising the customer diversity persisting within the workplace scenario, to reduce the unexpected chances of cultural shock, further making the transition process smoother (Kwintessential, 2013). Negotiations should also be conducted between the partners on approaches, methods, preparations, conclusions and etiquettes to increase the chance of successful outcomes as desired from the joint venture (Stahley & et. al., n.d.). Another vital area that should be assessed while expanding business in another country is the PR department, enclosing with brand image, public relations along with advertisements. As a matter of fact, tastes and values differ from place to place shaping the consumer purchase behaviour, wherein it becomes essential for the international company to evaluate whether the brand name, promotional campaign or representation is ethnically applicable in the host country (Gaussorgues & et. al., 2009). Besides, language training will also be required aspect that can be initiated by both the international country and the host country to overpass the cultural space and that will level the lines of communication (Thunderbird, n.d.). 3. Conclusion Unarguably, every country holds a unique culture that differs from the others to a substantial extent. Likewise, UK and India, being two different countries embrace diversity in their cultural dimensions. Since the culture of a country effects the environment of working ethnicity along with the market sphere by influencing consumer purchase behaviour to a substantial extent, assessment of cultural dimensions is vastly important during the globalization of business. Correspondingly, Tesco should draw the attention of Tata in neutralising the persisting cultural gap in order to build better compatibility within the teams. In this context, the involvement of cultural advisor and extensive training of the staff members to understand the two cultures as well as the target market characteristics will be mandatory. It is also suggestive for Tesco that well-thought measures should be taken in order to ensure that chances of conflicts due to cultural gaps, which can also be referred as cultural shocks are omitted in the newly developed organisational structure. Contextually, determining a new set of human resource policies along with the organisational structure and marketing framework for the new venture will be crucial for Tesco to mitigate the underlying challenges arising due to cultural gaps. 4. References BBC, 2013. Tesco to Open Multi-Brand Stores in India. News India. [Online] Available at: http://www.bbc.com/news/world-asia-india-25417261 [Accessed April 29, 2014]. Białas, S., 2009. Power Distance as a Determinant of Relations between Managers and Employees in the Enterprises with Foreign Capital. Journal of Intercultural Management, Vol. 1, No. 2, pp. 106 – 115. Boopathi, S. N., 2014. A Detailed Comparison of Finland and India through Hofstede & Globe Study. 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