Analysis of the Main Cross-Cultural in Star Supermarket - Essay Example

? STAR SUPERMARKET Amine Bouslama 10014934 Star Supermarket Star supermarket is a proposed British supermarket. Its main operations entail retailing of food, clothing, and other fast moving consumer goods in both local and international markets. The supermarket’s management considers exploiting the Chinese markets. As a result, it is necessary to reflect on the aspects of culture, management practices, customers responses, stakeholders reactions, and the business environment that face the new business. According to Wang and Goodfellow (2003), business culture in Shanghai elaborates relationships and connections that promote trust and co-operation in everyday operations. Tang and Ward suggests that management practices would help such organizations as Star supermarket to enjoy individual freedom, equal contribution, and division of labor. In addition, the staffing policy, communication aspects, and other host country’s concerns are crucial in ensuring the survival of the supermarket in this country. Mossler, (2004), asserted that the staffing policy is a managerial function implemented on recruiting and hiring of employees. It also involves in developing the required personnel for given vacancies in a company. Cultural Profile and Management Practices The culture and management practices of Shanghai where Star supermarket will be operating play a significant role in its entry and growth in operations. A cultural change initiative is crucial in the analysis. This approach would help the management of the Star supermarkets implement changes in all its levels of hierarchy. In addition, the adopted culture perspective is optimist because the management’s plans are long-term with expected successful entry and survival in the market. The management of Star supermarket aims at succeeding in the new market, adapting to the diverse culture in Shanghai and eventually become profitable. On the other hand, describing a population’s culture is challenging for many businesses. Particularly, the culture of Chinese people is diverse because of the citizens’ origins and regions in the country (WANG & GOODFELLOW 2003). Therefore, understanding the market’s cultures is crucial for the management of Star supermarket. Chinese population in Shanghai is extremely heterogeneous making it difficult for potential businesses such as Star supermarket to understand the markets (DERESKY 2011). The Chinese culture consists of several key concepts and values upheld by individuals in the country. The population values elaborate relationships and connections that promote trust and co-operation in everyday operations (WANG & GOODFELLOW 2003). The establishment of mutual respect and connection in business is crucial to its success. Furthermore, the concept of reputation and social status is fundamental to the success of a business. The business culture considers the aspect of appropriate allocation of respect to individuals as a means to create a reputation for a business (CHENG 2003). The Star supermarket management should consider gaining respect from the markets in China in order to attract respect and create loyalty among their customers. New entrants in the Chinese market are expected to understand the culture of the individuals in the diverse markets that revolve around relationships, responsibility, and obligations (DAHLES & WELS 2002). Workers and their Reception The workers in China are highly motivated and goal oriented. Consensus-oriented workers who make good teams in work places will welcome the management of Star supermarket. The country’s cultural emphasis is group oriented with all the personal interests sublimated to the good of the organizations they work. The workers also believe that standing out alone as a worker earns an individual negative publicity in a work place. Therefore, the workers keep low profile and work together to achieve collective objectives. Furthermore, the majority of the country’s employees tend to ask for detailed instructions regarding assigned tasks (WANG & GOODFELLOW 2003). Local Government, Suppliers, Distributor’s Reception The Star supermarket management also expects a different kind of reception from the local government, suppliers, distributors, and other stakeholders. The management of the Star supermarket expects a tough reception from the Shanghai region. Research indicates that the country’s foreign businesses meet the challenge of highly regulated markets. Some foreign investors believe that the China government deliberately locks out the foreign competitors to protect the local investors (BRAHM 2004). Therefore, the supermarket is expected to receive the harsh reception that entails numerous restrictions, regulations, and controls. Moreover, there are numerous bureaucratic systems implemented by the local governments before foreign companies accessing the China market (SANDERSON 2008). In addition, the Star supermarket’s management expects a competitive reception from suppliers and distributors of goods and services in Shanghai. Numerous certified suppliers and distributors are available to offer services to the new Star supermarket. The reception will be friendly since most of the suppliers and distributors will seek to win the available contracts. Furthermore, the suppliers and distributors will offer their prospective capabilities, enthusiasm, and cooperation to show interest and willingness to offer their services to the supermarket. Majority of these individuals will offer cost-effective ways to execute their responsibilities in supplying and distributing of materials (SANDERSON 2008). Organizational Chart The Star supermarket has a vertical organizational chart that would portray activities, coordination, and task allocations within the organization. This functional organizational chart shows that the board of directors is responsible for all the actions undertaken in the supermarket. The supermarket’s overseas operations include various market actions that include providing the required marketing mix and adding value to customers in the target markets. Moreover, the board oversees the implementation of set strategies to achieve their main objectives of their business Shanghai. Eventually, evaluation of the supermarkets activities in the country is done in order to gain more control. The finance and HRM department are second in command where they address all the issues in the marketing and sales, logistics and production. The separate departments hold different responsibilities to ensure the smooth running of the supermarket. The main weaknesses of the vertical organization chart include maintaining the power and balance, and lack of transparency within the designated levels. The form of management in this structure requires strong leadership at the top level in order to uphold its power and balance at the supermarket. In addition, the management struggles to keep the balance between singular and departmental goals due to the top-down form of supermarket governance. The supermarkets structure also encourages lack of transparency in the levels of management. This is because the lower levels of the management feels isolated and are likely to collude amongst themselves and engage in unethical behavior. Staffing Policy and Motivational Systems Staffing policies are defined by three main orientations namely the ethnocentric, polycentric, and geocentric policies. The ethnocentric staffing policy results to the appointment of the parent county nationals to the top management positions at their subsidiaries. In this case, the Star supermarket would select representatives from the parent country Britain. The polycentric staffing policy entails the appointment of the host country’s nationals to the similar top-level management positions (MOSSLER 2004). Therefore, the management of Star supermarket would appoint top-level managers from China to their different subsidiaries within the country. Finally, geocentric staffing policy entails appointing the best candidate for a position in the top-level management irrespective of their nationality. The management of Star supermarket should use the geocentric staffing policy. This is because the policy is open to determining the best individual for a given position without bias. Therefore, the recruitment team will only consider the credibility and experience of individuals interested in top-level positions without the influence of their nationality. Consequently, the supermarket will be in possession of skilled managers capable of leading the organization to profitability and growth (MOSSLER 2004). Leadership Style and Motivational Systems The most appropriate motivational systems for the top-level managers are the use of external incentives. This is directly related to the use of performance based monetary incentives and salaries that should be paid out in forms of stock options. In this case, the managers would be encouraged to work towards increasing the value of the organization. Therefore, the management of the supermarket should implement this system in order to motivate the managers. This is because motivation serves as the key to performance improvement in an organization. As a result, the value of the supermarket will increase leading to its growth and development to other sections of the host country. Cross-cultural leadership would be the most effective style in this environment. This type of leadership entails the effort to comprehend how people in diverse cultures interact and work together. Moreover, it involves understanding the relations between leaders of a globalized market. Therefore, this type of leadership fits the description of this situation in China where a foreign supermarket is intended for the Chinese people. In such a case, a cross-cultural leader is required in order to keep the situation under control through mutual understanding and consensus between the foreigners and the Shanghai communities. Furthermore, these leaders can easily adjust to this different environment and form partners and employees of the host country’s cultures. Communication Problems in the China There are potential chances of miscommunication between the management of the Star supermarket and employees from Shanghai (ALON 2003). Communication in Shanghai is a key barrier to both domestic and international business individuals today. Therefore, it makes most of the basic tasks such as making purchases difficult. The Star supermarket’s management would experience communication problems while dealing with the native customers in Shanghai. For individuals that do not understand Chinese, miscommunication is the main issue. This is because a single word could possess multiple meanings according to its intonation. Special Control Issues Various issues face oversees operations with respect to the control dedicated to a Star supermarket. These issues include negotiating environment, market ideologies, foreign bureaucracies, and currencies used (KESSLE 2008). The negotiating environment hinders the control of management of the Star supermarket. This is because of a given degree of culture shock, language differences, and conflicting business styles. This makes control difficult since negotiations on common grounds end up being starred due to these disparities. Moreover, there are significant differences in distances between the parent supermarket in the UK and its international subsidiaries. Such distances hinder control over the subsidiaries thus prompting delegations and other arrangements meant to share control over businesses (KESSLE 2008). Market ideologies also reduce the control of Star supermarket operations. This is because market ideologies play a significant role in the negotiations made regarding the management and control of its operations. In this case, various markets are considered adversarial in their negotiations, whereas some depend of consensus building. This situation determines the individuals in control of the Star supermarkets operations. Foreign bureaucracies also hinder the singular control dedicated to Star Supermarket. This is because all countries have accepted and ingrained approaches through which businesses are run. Consequently, efforts aimed at imposing new methods of running businesses in order to gain control prove futile. Finally, the multiple currencies used in the involved countries causes reduced control on the Star supermarket. The parent Star supermarket avoids various control efforts due to the resulting extra fees on their subsidiaries abroad. In such cases, most of the control is left to the management of the subsidiary companies in Shanghai. Therefore, the parent company management looses the all-special control over the international subsidiaries. Host Country Concerns China as the host country to the Star supermarket may forward some concerns with regard to its operations. First, Star supermarket would displace local supermarkets and obstruct their technological process. This is because the foreign businesses such as the Star supermarket are presumed to possess adequate resources as compared to the host country’s businesses. The local community’s concerns entail the exploitation of helpless workers in their societies. This is because several potential workers would settle for low wages offered by the supermarket’s subsidiaries in Shanghai. The host country may also get concerned over the overall growth of the economy since most of the profits made by the supermarket subsidiaries are sent back to the country of origin. Therefore, the host country’s economy stagnates. In order to protect the local supermarkets, the host country should impose various regulations meant to control the operations of the Star supermarket’s. Controlled activities in the markets offer the local supermarkets an opportunity to compete with Star supermarket for the potential target markets. In addition, the host country should regulate minimum wages for all employees working in Star supermarket. Therefore, exploitation of desperate citizens would be eliminated. The host country should also impose higher taxes on the supermarket’s foreign subsidiary companies in order to invest more on their economy. The government revenue from these taxes would lead to an increase in economy growth In addition, the domestic supermarkets in Shanghai could involve themselves in other strategies meant to protect their operations in China. This includes long-term investments and joint ventures that would ensure that their activities are synchronized. As a result, the domestic supermarkets will keep their operations in line with those of the Star supermarket. A joint venture entails the cooperation of a local supermarket in shanghai and the Star supermarket in assorted operations, share the profits, losses, and get involved in joint control. On the other hand, the Star supermarket management should adhere to the Shanghai’s rules and regulations on business operations. This also includes the labor laws and other joint operations’ regulations that would govern their operations in this foreign country. For instance, the Star supermarket should ensure that the wages paid to their employees are in accordance to the labor regulated amounts. In addition, the management of the Star supermarket should ensure that they maintain their professional ethics in business dealings. This includes transparency in financial reporting and budgets. The involvement of the business in fair competition would also ensure long-term cooperative relationships between them, the industry, employees, and other stakeholders. References ALON, I. (2003). Chinese culture, organizational behavior, and international business management. Westport, CT, Quorum Books. BRAHM, L. J. (2004). Doing business in China: the Sun Tzu way. Boston, Mass Tuttle. BRANINE, M. (2011) Managing Across Cultures: Concepts, Policies and Practices. Los Angeles, Sage. CHENG, K. C. (2003). Economic implications of China's demographics in the 21st century. Washington, DC, International Monetary Fund. DAHLES, H., & WELS, H. (2002). Culture, organization and management in East Asia: doing business in China. New York, Nova Science Publishers. DERESKY, H. (2011). International Management: Managing across Borders and Cultures. (7th ed.). Boston, Pearson. GERRY, JOHNSON & KEVAN SCHOLES. (2008). Exploring corporate strategy. Mumbai, Prentice-hall. KESSLER B., MARTHA. (2008) Trade barriers and China. Hauppauge, Nova Science Publishers. MOSSLER, KATHRIN. (2004). The pros and cons of international staffing policies. New York, Grin Publishers. MUNGENAST, H. (2007). Chinese business culture. Mu?nchen, GRIN Verlag GmbH. SANDERSON, J. (2008). Doing business in China. London, DK. TANG, JIE, WARD, ANTHONY. (2003). The changing face of Chinese management. London, Routledge. WANG, K., XIN, S. Z., & GOODFELLOW, R. (2003). China business culture: strategies for success. Singapore, Talisman Pub. Read More