Managing in a global society is the umbrella of today’s challenges in international management. Generally Multinationals have the benefit of cheap labor from most countries in Asia where Japan is critically different in many ways. Tesco is a British-based grocery and a general merchandizing retail chain, planning to establish itself in the U. S.A and Japan. One of the main and first few challenges that are inevitable is cultural adaptation. The most important way to adapt is to have prior knowledge about the culture of the country. If these are not understood, establishing a business in these countries will not only get difficult but may force the company to wrap up and depart. Possible ProblemsAmerican companies although encourage a diverse workforce, the liberal nature of such companies are often a culture shock to non Americans.
U. S.A is a country that is based on individualistic values, therefore they expect people to learn to adjust on their own with time. Foreigners generally take over a year to understand and adjust to the U. S. environment; however, this is why culture training is done. Geert Hofstedes Theory of Cultural Dimensions and Trompenaars Cultural Dimensions Theory will help to assess how these different cultures will pose as new challenges for Tesco.
Some common challenges expected: Language: There should be no language problem to communicate with people in U. S.A. In Japan however, Managers will have to be trained enough to communicate on business terms. Cost of Expat Managers: It is important to study how cost of living varies between U. S.A and U. K., and Japan and U. K. Japan is known to have a high cost of living, thU. S. managers who are being sent abroad will have to be paid additionally than they were before. Operational Differences: Japanese retail trade has an elaborate hierarchy.
There are many middle-men involved when moving goods from producer to consumer. This can raise costs, and also there can be various. complexities dealing to each distributor. Learning about how these trade channels works will be highly important if Tesco will need to compete with other retailers. Since modern trade is already a popular concept in the U. S., like Walmart, there should not be much trouble managing trade channels and also knowing particular middlemen for a good supply chain.
Also, Japan has much higher land value than U. S.A, it is densely populated and businesses generally tend to operate in smaller sizes to save costs. Hofstede’s Cultural DimensionsPower Distance: Japan has very little power distance in its organizational hierarchy. They do not appreciate long and fancy designations, because workers see being ‘humble’ as paramount. Most Japanese organizations have flat organizational hierarchies, and commonly they ensure that all workers, regardless of their job descriptions they wear a uniform to further neutralize level of respect for everyone.
Japanese workers see seniority of age as a reason for high level of respect, and they also are more liable to stay in a job than younger Japanese workers. Secondly, job descriptions are vaguer in Japanese culture. A worker is expected to do a variety of jobs. The U. S. is entirely different in Power Distance; workers are promoted and respected on basis of merit of experience. Employees regardless of age are expected to work bet in their own capacity, strictly within their job descriptions, and they also have specific job designations.
Tesco will have to especially either set a uniform for all workers or flatten their organizational structure; the otherwise will less likely be tolerated with local employees.