Cultural influence on management of organizations
1. Introduction
As businesses and firms grow in size, they are crossing borders and becoming multi-national companies. When the firms cross borders, several management strategies need to be aligned in accordance with the cross-cultural needs.
This assignment will examine two famous multi-national companies on their application of cultural aspects and analyze how successfully they have applied those aspects and reasons for their success.
Before proceeding with examination and analysis, let’s look what culture means.
According to Hodgetts and Luthans (2000), acquired knowledge will form values and behavior and subsequently influence the behavior of individuals or society.
According
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For instance, the Spicy Chicken Sandwich which is mixed some Chinese characteristics that to put spicy chicken into sandwich can be found in this market. From October 20th in 2004, McDonald’s had begun to ordering suitable menu for Chinese market, such like the breakfast product. The products like scrambled eggs, pancakes and hot tea which have typical Chinese elements can be found in McDonalds‟ breakfast menu in China.
“The good market response proved that our strategy of product localization is correct,” said by the by marketing manager (2009).
Chinese are very much of family oriented and kinship based. Therefore, McDonald takes the “family” as the main target group, including three groups. They are children, their parents and young people.
Pricing adaptation
China is a developing country with a lower economic level than America. Hence, McDonald has adapted their pricing strategy in the Chinese market in accordance with the economic level. The same product would be available at different prices from Chinese and American markets.
Advertising
According to Chinese culture, the color red is regarded as color of good fortune. Hence, McDonald’s advertisements in Chinese market always contain a warm picture. It sometimes looks like the elderly and the young generation within a happy and relaxing atmosphere with easy-listening background
McDonalds was founded in 1943, and 1967 British Colombia was its first international expansion, advertising to middle and upper class. McDonalds decided to expand internationally, due to the enormous success in America. There was heavy research involved in the expansion. Through globalization and internationalization, McDonalds were able to develop marketing strategies according to cultural needs, to serve specific target markets. McDonalds enter India’s foreign market and 1996 and is a tough foreign market to enter, but with McDonald’s success they were able to earn high revenue in India. The success strategy is researching and the development of food. McDonalds thoroughly analyzed the preferred taste, especially to not offend locals. Their key to success is to “think global, act local.”
In Beijing, McDonald’s was like leisure time for people. For example, people could relax, chat, read, enjoy the music, and celebrate the birthdays in McDonald’s in Beijing (Yan, 72). McDonald’s in Beijing provided friendly environment and moderate place for middle-class people. When people went to McDonald’s, they were getting American culture experience that they had never been before. In Beijing, when customers entered the McDonald’s, they could see the kitchen and how their service works which is different to American culture. In addition, Beijing culture has been changed because of the familiar and peaceful place that McDonald’s provide for their customers. McDonald’s made favorite for young couples “because the eating environment is considered romantic and comfortable” (Watson 50). Also, McDonald’s was children favorite place like in American culture because kids could play and eat at the same time. Even they had receptionist whose responsibility were “to establish long-term friendships with children and other customers who frequent the restaurant” (Watson 61). McDonald’s in Beijing became most favorite placed for people because of affordable restaurant and friendly
The McDonald’s in Beijing created these trends because they used the same menu as the American counterpart. This increased business and attracted customers because they felt more modern eating the so-called “American cuisine.” The McDonald’s in Beijing is most definitely considered an example of an American-inspired, transnational culture because the Chinese are intrigued with the western influence and this does change their culture because they are becoming more modern and opening up to outside influences. With a positive view from China, McDonald’s decided to expand even more.
McDonalds is arguably one of the most iconic and fastest growing fast food chains in the world. According to their website, they operate over 36,000 restaurants in more than 100 countries (McDonalds para 1). The company released an ad in Malaysia titled “Happy Family, Happy Me.” The ad depicts a joyous family eating in a McDonalds restaurant. A happy meal box and a Big Mac box are staged on the table as a young girl gleefully feeds her father a French fry and her mother looks on with a smile. A subscript of the ad even reads, “Keeping everyone in the family satisfied can be easy. With a little help from us, it can be fun too.” The ad tries to portray eating at McDonalds as such an enjoyable and
“I’m lovin’ it” (mcdonalds.com) is the motto for McDonalds. I can remember watching the commercials on my television and wanting to eat McDonalds. Going to McDonalds was my favorite place to eat as a kid. I loved the salty fries and the prize you would get in a happy meal and I would beg my parents to take me so I could get them. When I was little they had the slide and ball pit, which I absolutely loved to play in. As I got older I started to learn about different cultures and I was always curious how the American businesses impacted other countries. I always knew that McDonalds made a ginormous impact in America. Every kid wants a meal from McDonalds but I would wonder if children in other countries would crave McDonalds meals like Americans
Golden Arches East: McDonald's in East Asia by James L. Watson The book, Golden Arches East: McDonald's in East Asia by James L. Watson, is a collective study on how McDonalds has transformed East Asia and other parts of the world, but also how McDonalds has been transformed by these countries. McDonalds is the symbol of the western world and more importantly the United States, which is known for its imperialistic and globalist values. However, I think that McDonalds has benefitted Eastern Asia with new ways to serve customers, safer places to eat, and more hygienic places to use the restroom.
The target audience for my chosen brand, McDonald’s, is ever changing. Mainly, McDonald’s in Singapore has always attempted to target the children. This, in turn, leads to the process of
McDonald's marketing targets everyone in every age,gender,races and does not have a select audience. The company claims that their restaurants offer meals for youngsters, a serene place to relax with free wi-fi for adults, and a quick delicious breakfast for those in a hurry in the morning.
It opened its first outlet in 1990 in Shenzhen, and other major cities elsewhere in the country. Moreover, McDonald’d choose the family with children as their target customers at first, and later it aimed on youths from 4 to 30 years old. With its key word “young, fashionable and lively”, it hopes to provide light and happy dining experience for young people. While as for the foods, McDonald’s claimed that they would not change the menu in China at the very beginning of entry, and always stick to their American style. However, facing the challenge from KFC, it’s no longer easy for McDonald’s to stay “outside”. Fried egg, a new hot drink with honey and ginger which it’s widely believed in China that ginger decoction can help keep coldness away and Chinese pancake appeared on the breakfast menu. The strong market segmentation make KFC super-boom in China, whereas McDonald’s caught up from behind after it changed their strategy instantly. However, both of them successfully survive in Chinese market although they applied different
Both the authors have taken descriptive approach to elaborate in detail their respective areas of cross cultural management. As per article, “Rethinking Cross Cultural Management in a Globalizing Business World” by Soderberg & Holden (2002), due to globalisation and its increasing trend, the organisations and its environment has gone through significant changes. Thus the traditional way of defining the cross cultural management needs amendments. Further the author has elaborated that in this commitment the authors are contending for a split far from the conventional method for considering and portraying diverse administration for two fundamental reasons. To begin with, the winning idea of society as-substance, which in this logical connection is vigorously connected with national societies (and, by augmentation, country states) is distant with the hypothetical improvements of conceptualization of society and character. Moreover a conceptualization of hierarchical and national society’s too characterized and homogeneous substances is out of stage with the new economy, with its accentuation on systems administration, hierarchical learning and information as the fundamental hierarchical asset, which rises above firm, industry, and national limits. Second, the new economy requires not simply new skills and 'worldwide education but also needs to adopt 'the worldwide attitude'. A globalizing business world too needs suitable calculated apparatuses and expository methodologies of advantage to both analysts besides, specialists. Consequently the article “Cross cultural Differences in Management” by Amman & Jordan (2012) has concluded that due to cross cultural environments, the managers can encounter different impact on different areas of management. These impacts can create many limitations and barriers on different areas of business. Therefore, managers of the
McDonald’s fast food industry which is named in the fast food industry has been labeled and comprehensible to many consumers. To change it, or to put into new elements, may become a very difficult task for McDonald’s. This because McDonald at Hong Kong made first Big Mac Meal in 1975 and has been offering the similar fast food rangers, like McMuffins, for over 25 years.in same time, her ‘Fresh Choices Menu’, in a certain extent, runs on an opposite direction to her long fashion of fast food offerings. This case because will confuse consumer as those have difficulty to buy healthy perceptional green sale of food under junk food restaurant. This campaign has been launched under
Another strategy McDonalds used in product marketing is tries a few concepts simultaneous in different parts of country. For example, McDonald’s offer ‘Halal’ food in Muslim countries such as Saudi Arabia, Indonesia, Malaysia, Pakistan and Bangladesh.
The golden arcs have explored the world, with McDonald’s known to be the international face of hamburgers around the world. The golden arcs have been seen in the Netherlands to South Africa to Uruguay and many more places. McDonald’s is all over the world, and with this advantage they have been smart to relate to what is considered a norm in the respectable nation they work in. “In this era of globalization, it is becoming increasingly important for businesses to leverage their brand equities across geographic boundaries” (Harish 22). McDonald’s does a great job by displaying them in different countries for their consumers because of the mission each McDonald’s is always to strive in their business for: Quality, Service, Convenience, and Value. McDonald’s is such a powerful company in the fast food industry that the China Puzzle reported that “In Hong Kong, 72 percent of people visit McDonalds, on average once a week” (China Puzzle 639). The article explained that this is McDonald’s most “penetrated and mature markets in the world.” The reason why that number is so high for McDonald’s is because the core targets young adults who look to be “cool” and stay up to date with all the big trends such as the Chicken Nuggets with different sauces in a random calendar.
Effective cross-cultural management has to be grounded in a detailed knowledge of individual cultures. Discuss using examples from two multinational companies.
Since McDonald’s is the most well know fast food chain in the world with a market cap of 69.35 billion, brand recognition is their biggest strength. The secret of McDonald’s success is its willingness to innovate and maintain consistency in the operation of its many outlets. In recent years McDonald’s has introduced Premium Salads, Snack Wraps, fresh Apple Dippers in the United States, and Corn Cups in China. Also, McDonald 's products are priced so low that economic conditions are almost insignificant.