Tesco in India - Coursework Example

Tesco in India Table of Contents Table of Contents 2 Introduction 3 2. General Cultural Differences between UK and India 3 3. Culture Compatibility between Tesco and Tata Group 5 4. Critical Appraisal of Different Solutions/Impacts to Strategic Decision 7 5. Conclusion 8 References 9 Bibliography 12 1. Introduction Tesco plc is a UK based multinational company and is the one of the biggest retail chains of the world. The company has planned to establish a supermarket in India in the recent years. It is the first foreign retail chain trying to enter into Indian retail market Tesco plc has proposed to open joint venture with the Tata Group’s Tent Hypermarket Ltd (THL) by investing around 110 million US dollars. Tesco has initially applied to the Foreign Investment Promotion Board (FIPB) for establishing store in India. . It has been planned that initially the shops will be established in Maharashtra and in the neighbouring state of Karnataka. This particular proposed joint venture is mainly can be recognised as a foreign market entry strategy of Tesco. The joint venture between the Tesco and the Tata Group may result the expatriate managers to face with certain imperative challenges that may hinder the operation of synergy (BBC, 2014; Hindustan Times, 2013). In the nutshell, this report intends to discuss about the relevant cross-cultural models and theories associated with the proposed joint ventures. Furthermore, the study will also discuss about the issue associated with the compatibility amidst the partners. 2. General Cultural Differences between UK and India Social relationships amidst the multinational teams often face the challenges of the cultural differences. The issues and the conflicts that rise from the cross cultural differences basically create a hurdle in knowledge exchange and the project performances. In recent scenario the organisations are basically driven by globalisation that has given rise to the cultural differences and has laid a greater impact upon the organisational activities. It has been ascertained that cultural plays an important factor within the negotiation process. The business activities operated globally depends upon the negotiations been undertaken by the ventured companies. Therefore the proposed joint venture between Tesco and TLH might initiate certain cultural issues that might impede the successful operation of the synergy. The identification of the cultural differences between the UK and India will assist in having a better understanding about the cross –cultural impact on the proposed joint venture. In order to ascertain the effective cultural differences between UK and India, dimensions of the Hofstede cultural models can be applied. Considering, power distance as the cultural dimension, it basically deals with the cultural attitude towards the inequalities in the societal context. In the context of UK, the power distance dimension depicts lower ranking as compare to India. This reflects that the people of Britain believe that the inequality within the society must be minimised (Gray, 2012; Patel & et.al., n.d.; Hofstede, n.d.). Individualism as the cultural dimension reflects about the degree with respect to the interdependence of the individuals within the society on its members. The individualism dimension score of India is much lower than that of the UK. This explains that the members within the Indian society places significant value on building relationships with other members in the society. Whereas, in the UK, the members within the society are highly individualist, this implies that the people endure lower interdependency upon each other. Masculinity is the dimensions that reflect about the society which is basically driven by success, competition and achievement among others. The UK records high in terms of masculinity dimension in comparison to India. It has been observe that the British society basically believe in success and competition (Hofstede & et.al., 2010). Uncertainty avoidance is considered, when the society believes that the future remains uncertain. Correspondingly, the UK score lower in this dimension. This reflects that British people are adventurous and enthusiastic (Soares & et.al., 2007). They are ready to adapt new changes and advance plans as it comes in the way. In the context of work culture, this reflects that the organisational objective remains clear but the process of achieving it remains flexible. This ensures better change adaptability. Pragmatic is the dimension that reflects about the society that is not in the position to explain about everything surrounding the society. Both the countries score the similar score in this dimension (Messer, 2010; Hofstede, n.d.). Indulgence as the cultural dimension reflects about the degree of the people’s control over their desires and the impulses. The UK scores higher with respect to this particular dimension. This reflects that British society is driven by individual desires and impulses. In the context of India, the society is restrained from being driven by personal desires and impulses. The Indian people stress upon the interest of their family members rather than their personal desires (Alexander & et.al., n.d.; Hofstede, n.d.). According to the Hall (n.d.), there are various factors that depict the cultural context on the basis of high and low. Considering the factors of Edward, the cultural difference between UK and India can be well ascertained. In relation to the overtness of the messages, the UK scores higher on culture as the British people usually derive the in-depth information of any message. India stands lower in this factor and engaged in shallow analysis aspects. Besides, another dimension is considered to be the level of the commitment within the relationship. Taking this dimension into concern India scores more as the society gives priority to existing relationship than other aspects. Whereas, the British society gives priority to work rather than family and personal relationship, thus scores lower in this dimension. Considering, the factors determining the cultural differences of the UK and India into account, there is likely going to arise conflicts between the two countries with respect to the proposed joint ventures (ORAC, 2008; Levine & et.al., 2001; Hall, n.d.). 3. Culture Compatibility between Tesco and Tata Group In order to ascertain the effectiveness of the proposed joint venture, the compatibility between the work cultures of Tesco and Tata group is being determined. In Tesco, the work culture reflects about the uniformity amidst the employees. In this context the employees of Tesco wear blue and red jackets and the t-shirts. The mangers are required to wear suits with badges. The badges of the managers contain the role, picture and the length of the service. Furthermore, it has been ascertained that employees provide service to the customers for 7.14 hours/day. In case of Sundays along with the bank holidays it is half. Besides, the work culture of Tesco reflects about different pay for nightshifts and the team leaders (Nwagbara, 2010; Tesco, 2009). The employees working within Tesco are happier and satisfied with the job role provided to them. The workface reveals that Tesco endures a professional environment, better pay levels and future prospects among others. Besides, Tesco solve the employee disciplinary activities in a formal structured manner. The Tesco management at first strikes on the record that is followed by a written warning and meeting is conducted by the superiors in order to resolve the problems. Under circumstances, where the problems are not being able to mitigated, the management opt for suspension for maintaining higher standard equality. Within Tesco, the employees and customers are provided with the annual questionnaire for feedback. This feedback is basically used for the staff appraisals as well as rewarding the employees for their good performance. This feedback is further used to improve the employees performing below standard (Higgins, 2013). Tesco further provides employment opportunities and hierarchical positions in the management level globally. In consideration with the philanthropy, Tesco include monthly charities for providing support to the Cancer Research UK (Zavala & Morrison, 2012). Tata group is the organisation that has undergone various innovations and development due to its culture. Tata group follows employee actions that reflect about the employee’s frustration towards the change within the work environment. The Tata group effectively manages the employees’ constraint to change by executing effective organisational culture. The general constraints are deviating from the commitments, lack of loyalty as well as creativity and resistance pertaining to the innovative ideas among others are effectively managed by Tata group. With respect to the culture being followed by the Tata group, entails few prior business values. Tata group basically endures the culture pertaining to family dominated. This implies that the business is being running down from generation to generation. The ideas being propounded follows downs the family generation. The working conditions within the internal environment of Tata groups are rigid as compared to other foreign organisations. In relation to this, it can be well ascertained that comparing the working conditions of Tesco and Tata groups, certain differences are determined, which might be a reason for the emergence of the conflict due to the proposed joint venture amidst them. In Tata groups the company management follows a hierarchical decision-making process. This implies that the organisational culture follows authoritative leadership style. Besides the other business value of the Tata Groups includes competitive education system. The competitive education system and the presence of the intellectual resource, the company operates effectively in the execution of business operations. According to the work culture within Tata group, the family values are given priority and importance. Besides, the Tata group management endures excellent negotiation skills that assist the company in gaining competitive advantages over others in the competitive market scenario globally (Bouhmouch, 2009). Taking into concern the cultures of both the companies, it can be well ascertained that the while engaging in the proposed joint venture, the work culture difference will lay a greater impact on the business activities. Tesco follows the work culture that gives priority to work values and diversity. On the contrary, Tata follows a traditional way of work culture that has been inherited by the management since generations. Diversity in the work culture of both companies might create hurdle in the compatibility aspect (Straker, 2013). 4. Critical Appraisal of Different Solutions/Impacts to Strategic Decision Considering the cross-culture diversity of workplace lays impact on the workforce commitment and job satisfaction. It has been ascertained employees’ behaviour, expectations along with the job performance differs on the basis of national culture. There are high chances of conflicts associated with the cross-culture diversity. Taking into concern the proposed joint venture THL, diversified culture of Tesco and Tata groups will lay impact on the business activities. As discussed British society scores lower in interdependency The young generation within the British society endure the mind-set of becoming independent to fulfil own desires. This particular mind-set of Tesco might lay impact on the business activities. The young generation of the Indian society greatly depends on their parents, therefore to promote any product in India, the parents and their tastes must be taken into account. Commitment towards relation is another factor that will lay impact on the business activities of the synergy (Martin, 1992; Dorfman & Mobley, 2003). The Indian society are emotional by nature, they give more priority to their sentiments rather than the economic gain. The Indian people are tends to stick to that organisation, which provides them with recognition and respect. In the UK, people are more intended towards the economic gain and less towards building relationships. In Tesco the employees are given priority and value as a work culture. Therefore, Tesco might not face problem related to employee dissatisfaction in the Indian market. In this context, there is parity between the work cultures even if diversity lays in cross-national culture. Another vital aspect is that Tesco wok culture takes into account new ideas and work concept in the management level. This shall impact the decision-making process and the leadership strategies in the proposed joint venture. This is because Tata groups follow the concepts that have been laid down from generations. The management traditions and decision-making process follows traditional concept as the business is family dominated. This analysis ensures the consequences of the cross-culture and work-culture diversity on business actives (Lok & Crawford, 2003). 5. Conclusion The study reveals that cross-culture and work-culture diversity lays an impact on the business activities. In case of the proposed joint venture between Tesco and Tata group, the cross-culture diversity will lay a greater impact on the business activities being executed. The British culture and the Indian society are far different form each other. Therefore, conducting business activities in India, Tesco needs to follow and respect the Indian culture for growth and success of synergy. As this proposed project is a multi-branded supermarket, work-culture diversity between Tesco and Tata group might create hurdle in the business activities. This can be mitigated by considering the proposed solutions mentioned above. References Alexander, V. S. & et.al., No Date. Managing the Impact Of Differences in National Culture On Social Capital In Multinational It Project Teams – A German Perspective. University of Bamberg, pp. 1-11. Bouhmouch, I. & et.al., 2009. The Tata Group. 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