In international business, culture in a global economy plays a significant role. The success of business transaction in a profitable manner depends on the ability to resolve the international differences that arise from the different culture. The managers are required to engage in the process of learning so as to develop the competency in the international culture. Training helps the manager in acquiring the required knowledge and skill to act as a cultural agent. The various factors that affect the human culture and the behavior are religion, education, personality, belief structure, experiences of the past.
Culture of an environment, place, society and nation is the set of core values, beliefs, standards, laws, ethics and behavior shared by individual and group, which determines an individual’s act and how it uses one self and others (Hofstede, 2005). The basis to differentiate the groups are the values, ethics, languages, traditions, etc. in a brief sense, we can say that culture is comprised of various factors, which influence religion, social ethics, education, family, etc. These factors determine the way of living of a person or a group.
The role of cross cultural management consultant in a globalizing world is to effectively manage the expectations across cultures. These expectations can be related to the leadership, decision making processes, resolving the conflict and the sharing of information. These are the people with strong cultural intelligence (Mehegan 2007).
Cazandra is a clothing manufacturing company in UK. It is looking forward for expanding its business, which provides services to the clothing industries. Its products vary from the initial design to finished garments. In 2005, it began designing clothes that suits best for the ladies. Clothing items are distributed through boutiques.
Cultural comparison of UK and Japan
Culture is a complex factor and forms a critical factor in business environments. Its proper understanding is required because of product development, business negotiation and promotion of products. In U.K., the market is medium but premium range of products is targeted in this country. Here, the market potential is huge but it is difficult to achieve the market share. UK’s currency is Pound Sterling, which has the highest value in the world and has become stable these days. In countries like Japan, there has been an increase in the awareness of spending and buying better quality products. Huge cultural diversity exists among the UK and Japan in the following respect: The people of the Great Britain are very adventurous and daring. So, the culture of the United Kingdom is based on exploration and innovations. They like to find out new things and techniques and want to live in the changing environment where there is always something new and different. For example, bungee jumping is very adventurous for the people of United Kingdom in the present time and they believe in the individualistic culture. On the other hand, people of Japan show Collectivistic culture, which reflects the harmony (Yasuhiko 2001).
The Britain’s culture shows the society, which is having low context where as the Japanese culture reflects high context towards the society. The people of UK have flexible ties with their family members and prefer small families whereas in Japan, the people have strong ties with their families and prefer to live in a joint family.
The major difference in the culture is seen in the behavior. In UK, self interest governs the behavior and value is accomplished by the individual whereas in Japan, group norms decide the behavior and value is accomplished by the teams. Apart from this, in UK, status is the standard symbol and for the people of Japan, traditions and values are more important than money and status (Mehegan 2007).
Differences also lies in the marketing strategy followed in these two countries. In UK, the marketing forms the core activity to the firm whereas in terms of the Japanese firm, marketing forms the secondary functions after the manufacturing. In UK, marketing is viewed as the important strategy on the other hand, Japanese view marketing as their major requirement. In Japan, marketing related messages should focus on the emotions as it has great impact on them. For this purpose, they use the symbols. On the contrary, in UK, advertising message content should be informative and based on the logic. To advertise in Japan, the strategy should be made keeping in mind the lifestyle, status and prestige of the people whereas in UK, benefits related to the individual is conveyed.
Apart from these differences similarities also lies in these countries which are as follows:
In Japan and UK, people are earning more and spend high for their status on garments and home products. In Japan, the economy is developing with the high growth rate. In UK, people believe in spending and have an attitude of maintaining high status.
Education standards are high in U.K and one of the best in the world. People can be hired from the country to understand the local market. Japan is also one of the best education destinations in the world. Education is one of the factors, which affects the strategy of the firm and its success. More the level of education, greater is the scope for the developing the businesses of UK in Japan. Both U.K. and Japan are well known for the quality of education. Before expanding the business, it becomes essential to develop adequate marketing strategies and to conduct a proper environmental survey. By developing marketing strategies, the company is able to know the opportunities and threats present in the market and can fully utilize the available opportunities (Mehegan 2007).
While expanding, the product must be modified according to the target market as in the Japan, the environment and culture is altogether different from UK. Therefore, this should be kept in mind while developing strategies. Sales promotion tools differ according to the situation and the market. By providing higher discounts to the loyal customers, Cazandra (the cloths manufacturing company in UK) can easily adjust short term variations in supply and demand. These discounts attract customers and increase their frequency of purchasing. This also helps in increasing sales.
Number of trade promotion tools such as sample offer, gifts, premiums, free trials, warranties, point of purchase, etc. helps in getting support from distributors. Trade promotion tools are helpful to carry and promote the brand (Hofstede, 1997).
Market Entry Strategy:
Cazandra, clothing manufacturing company in UK, can go for expansion in Japan depending on the similarities and keeping in mind the diversities. After considering these factors the strategies should be developed. The company should adopt the joint venture route in order to expand in Japan because it involves the collaboration; the value is created by bringing together the expertise, money and skill. It will enhance the capabilities of partners in creating new innovative products, minimizing the cost and in introducing new technologies. Before going for the joint venture, the company should see that its strategic vision matches with the partner company and joint venture must form a comprehensive agreement.
Strategies that should be considered while going for expansion:
First of all, before deciding on how to manage a workforce, strategy and policy of the company should focus on the reason behind the expansion of the company. Reasons are: expert management skills, cost advantage and immense market potential in Japan. One good example to manage a workforce is to have an ethnocentric policy where the senior managers are from the home country while operating in Japan. For this, the company should provide them with compensation that is above the basic salary to motivate them to work outside their home country. Other functional working force is the local people who have expertise in the hi-tech and electronic products. These people can provide a direction, skills and efficiency to the firm.
These policies give employee enthusiasm, zeal and confidence in individuals or groups, so that they will be able to cope-up with the tasks assigned to them. Company has to foster a positive attitude in employees to perform well in the other country. Enthusiasm is to be prioritized as it reflects the attitude to work and employee’s willingness to strive for the target set by the organization.
Employing local people has lower cost, high productivity and other benefits. Personnel manager has to be hired from the local country to work in coordination with the manager from the home country. The problem faced in this type of management is communication problem with senior managers due to language and cultural diversity. They find it difficult to deal with the local country suppliers and other top government officials.
Another strategy to manage the workforce is that the top management should be recruited from the local country as this reduces the problem of communication and helps in dealing with the customers and the officials. They know the culture, laws, policies and the business environment. The company considering expansion should focus on the objectives and expectations of the local people. It should make local people acquainted of its strategy through the training programs and focusing on the goals of the company. The problem in this type of management is the difference in strategy and objectives of the local managers and the company’s policies due to the different ways of working. Incentive is to be decided crucially keeping in mind the local expectations.
Travel related issue: This issue is very significant because if the company expands, the managers will have to travel for the meetings and presenting reports to the parent company. If the company is operating in more than one country, it has to consider a good amount of traveling budget with all the facilities of transportation and reimbursement of the expenses. Company has to provide the best traveling modes because it should be less time consuming and ensure a comfortable travel. Much traveling must be undertaken by the senior management and hence, it is important to provide luxurious accommodation and other recreation facilities. Much of the problem is solved through the means of technology and Internet i.e. through video conferencing and software.
Family Commitment issue: The managers and employees have duties and promises towards their families. Organization has to develop a method, so that the employees can fulfill the commitment towards their family members, it improves the employee morale. When the managers have to work outside the country for more than a year, the company must offer compensation to the employees. A major problem suffered by the employee’s family would be staying far and alone. So, the company should provide accommodation to the spouse at the place of work of the employee and should also see to fulfill other facilities. If the employee does not have a permanent place of work and has to travel to other country offices then the company has to create a policy to allow and reimburse for the spouse of the employee to travel together once in a definite time period.
Political and Legal Issues: It is an important factor to affect the business operations in another country. There is a difference between the political factors of the home country and the host country. There are two political sides.
Ø Democracy and
Ø Monopolization of political power
Democracy has fundamental and civil rights. The legal system is based on the political system. If there is democracy in the country, private initiatives are allowed but in monopoly, there are restrictions by the government. Law includes the civil law, common law or religious law. The host country’s political system is not completely known to the other country’s managers. There are various political risks in the host country like credit risk, currency convertibility risk and religious risk and risk related to ethnicity. In managing political risk, the first step is to evaluate the risk in quality and quantity. Finally, it needs a proper management and methods to settle the problems. Various means to manage the political and legal risk are planned divestment, capital budgeting, insurance, political relations and support (Mead 1994).
I would advice the company Cazandra, which is the clothing manufacturing company in UK, to expand its business in Japan by leveraging over the similarities, focusing on the dissimilarities and then developing the strategies keeping in mind the values, believes and lifestyle. The best mode for the company to expand in Japan is through the joint venture.
Implications for business development
Culture is an integral part of any business environment. Without the understanding of culture, no business can run successfully. It does not mean that the manager should indulge in cultural anthropologies, but they should develop skills to assess basic cultural differences that have a bearing on their performance. As I stated above that people of Japan give preference to their values and tradition more than the status, we can analyze that the strategies of the business in Japan should be based on the cultural preferences of Japan (Sharan, 2003).
Similarities was found between Japan and UK for example: island nations and in terms of the education both the countries are well known for the quality education and people are status oriented etc. but different approaches to the challenges were also recognized such as productivity of resource, which relates to culture, shortage of landfill in Japan, policy approaches and strategic planning etc. apart from this there is a requirement for a improved cultural understanding between UK and Japanese people and environment. In UK, the manufacturing firm should design its strategy keeping in mind its local customers of Japan. Advertising strategy should be based on emotions using the symbols. And it has been found that shopping experience in Japan is exciting.
Before going for expansion each stakeholder role should be analyzed, that includes government, market, academy and consumers. Synergies should be identified between economics and environment. Apart from this, the role of innovative technology and the changing life style should be taken care of. Major change is required in the advertising strategy that should be followed in the Japan because Japanese children watch less television as compared to the children of American. In America most of the advertisement is viewed by the children but in Japan majority of the viewer are from the older adolescence group. Hence advertisement should be made keeping these groups in mind and instead of focusing on the logical advertisement emphasis should be given on emotional appeal (Belch, George 1998).
Better understanding of all these cultural differences will determine the success of the Cazandra Company in Japan.
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