Describing Cross Cultural Practices of different countries stating examples of different Select MNC's belonging to different countries.

1. A study on Cross Culture Practices of MNC’S

2. FLOW OF PRESENTATION

3. CROSS CULTURE COMMUNICATION
 Referred to as intercultural communication
 People from differing cultural backgrounds
communicate,
 In similar and different ways among themselves,
 They endeavor to communicate across cultures.

4. PURPOSE OF INTERCULTURAL
COMMUNICATION IN BUSINESS
 To create cultural synergy between people from different
cultures within a business.
 To avoid problems stemming solely from misinterpretation
when coming across people from different culture and society
in the large expanding business globally.
 Communicating across cultures effectively improves your
productivity and efficiency.

5. Why Culture Matters in International Business
 Developing products and services.
 Communicating and interacting with foreign business partners.
 Screening and selecting foreign distributors and other partners.
 Negotiating and structuring international business ventures.
 Interacting with current and potential customers from abroad.
 Preparing for overseas trade fairs and exhibitions.
 Preparing advertising and promotional materials.

6. GEERT HOFSTEDE
6 D Model

7. The 6 Dimensions are
 Power Distance
 Individualism
 Masculinity
 Uncertainty Avoidance
 Long Term Orientation
 Indulgence

8. Nestlé

9. Industry Analysis
Food Processing Industry
Cannery
Meat Processing
Packaging
etc.
From raw to processed
foods
Lengthening shelf life
Hygiene and health
standards
Big market with major
rivals
•Intense competition
Dieting & Obesity
Allergens
Quality Ingredients
Increasing demand for
Organic/Health Products

10. Flexibility
Stability
External
focus
NESTLE CULTURE
Internal
focus
Clan- family type
(collaborative)
Adhocracy
(creative)
Hierarchy
(controlling)
Market
(competitive)

11. Creative Culture : -less functional barriers
-team working
-risk taking
-encouraging innovation and flexibility
- employee can take initiative
- opennes and curiosity for market trends
Market Comptitive: - profit-priented business
- expanding market share
-result-oriented and competition
- market research to reduce uncertainty

13. Nestlé Corpoarte Strategy
- Expectations and needs of consumers affect business strategy
and operations
- Strengthening their leadership in the global market is key
element of their corporate straregy
- series of strategic business units based around geography and
product.
-‘CREATING SHARED VALUE’
-

14. GLOBAL NESTLE
 Nestlé has a Board of Directors, led by Chairman Peter
Brabeck-Letmathe, who was the former Nestlé CEO.
 The Nestlé Group is managed by geographies (Zones
Europe, Americas and Asia/Oceania/Africa) for most of
the food and beverage business.Globally managed
businesses
 Vertical oraganazition structure

15. - Its global center office is in Switzerland but it is not
Swish company but it is a worldwide company in a
sense that Nestlé has about 250 000 shareholders,
none of whom individually own more than 3% of
the shares

16. Social Responsibility
• Nestle’s education programs have reached 9 million people
•Nestle India supports local schools, themaintenance of public parks
and green belts.
•By changing the recipes of its products, it has eliminated
•75,000 tons of trans fat,
•15,000 tons of salt,
•638,000 tons of sugar

17.  Water Education Programme in India.
 Nestle provides rural farmers with
technical support via Chilli Farming
Project.
 Support breast feeding cause in India
 In Japan they have started a wellness
club
 In Japan they serve more of regular
coffee than instant coffe due to their
culture
 Price conscious TG in India and
management of that.
A proud farmer from Kelantan, Malaysia, whose
chillies are used in Maggi chilli sauce.

18. Continual improvement of the environmental
performance along the value chain

19. Nestlé tops global corporate responsibility survey
‘Transparency helps us address
problems, and there’s no doubt it
contributes to better interactions
with external stakeholders.’
Janet Voûte, Global Head of
Public Affairs at Nestlé

20. Challenges of Nestlé

21. Large Company
 Has issues about flexibility
 Time lost through decision periods
Solutions:
 Regional management empowerment
 Glocalization

22. Supplier Issues
 Cacao going exstinct in the world
 Natural diseasters such as flood
 Primitive agricultural methods
Solutions:
 Education to farmers
 R&D about seeds and agricultural methods
 Being prepared to crisis

23. Image Problems
 Child Labor Issue
 Suggestion of privatization of water sources
 Working conditions
All above creating a very bad image
Solution:
 Legal issues
 Charity and Social Projects
 PR projects
 Better working conditions througout the world

26. Social Media Usage
 Not much effective in social media
 Losing a channel for customer relationships
 Even not having social media pages is better(!)
 Solution:
 Having more appropriate social media usage

28. • McDonald’s has 33,510 fast food restaurants located in
119 different countries
• On October 8th, 1990 McDonald’s opening its first
restaurant in Shenzhen
• April, 1992 McDonald’s opened its largest restaurant in
the world at that time in Beijing.

29. McDonald’ Cultural Adaptation Measures
“Culture is everything that people have, think, and do as members of their society”
McDonald’s had to Consider 3 components of culture
(1) material objects
(2) ideas, values, attitudes and Beliefs
(3) specified, or expected behaviour

30. Product Innovation to Cater to Chinese Taste
 At the very beginning of entry, McDonald’s claimed that they would not
change the menu in China, and always stick to their American style
 October, 20th 2004 McDonald’s introduce 2 new items on their menu
 In 2007, McDonald’s launched a new hot drink with honey and ginger
(Fried Egg) (Chinese pancakes)

31. Targeting
 Before 2003, McDonald’s basically targeted on family with children; while
after 2003, it aimed on youths from 4 to 30 years old
 To attract young people from the psychological perspective with some of
the main concepts like “sports” and “romance
 Also music played in the restaurants is mostly recent Chinese pop music
with quick rhythm
 To target kids they offered kid’s meal with toys mostly of American cartoon
characters in movies such as Alvin and the chipmunks and ToyStory

32. Chinese Eating Habit
 For Chinese people, going to a restaurant is more than having dinner
 The first choice for Chinese people to meet friends is to go to a
restaurant
 Every restaurant is equipped with a children’s playground with sliding
board, for parents to better relax and stay longer in the restaurants

33.  Spring festival is one of the most important festivals in China

34. Language and Translation
 McDonald’s have made their menu less appealing but easier to
understand. For either old or new products, name of a product
demonstrates the main ingredient and way of cooking
 some of the literal translations are “hamburger with pork and egg (猪
肉蛋堡)”, “hamburger with spicy fried chicken (麦辣鸡腿堡) etc.
 When McDonald’s started their home delivery service they took
special care in selecting the hot-line number i.e 4008-517-517, and
“517” has the same pronunciation as “I want to eat” in Chinese.

35. Starbucks
 Starbucks Corporation is an American coffee company
and coffee-house chain.
 founded in Seattle, Washington in 1971
 It operates 23,768 locations worldwide.
 Major - China, Canada, Japan, UK, South Korea

36. Key changes adopted for China market:
The stores are bigger with more
seating space :
 Coffee shops here are a
destination.
 Chinese consumers seek out
Starbucks to “nurse their drinks
and lose themselves in their
laptops”

37. 2. The coffee is more
expensive:
 Charges 20% more for its
products in china.

38. 3. Starbucks stores in China offer a menu of
Chinese teas and treats like mooncakes:
 Specially designed “Strawberry Cheesecake
Frappucino”
 Best selling Item in China Starbucks

39. • Starbucks management makes an
effort to get to know employees'
families.
 The food is labeled with the country
where it was imported from to address
Chinese consumers' concerns about food
safety.

40. An understanding of cross cultural issues
coming up when Toyota opened its
factory in France

41. France culture
 Specific
 Low Masculinity
 Individualism

42. Japan Culture
 Achievement Oriented
 High Masculinity
 Collectivism

43. Culture in Toyota as a Japanese Company
 Value Harmony and teamwork
 Emphasizes on developing good employees

44. Cultural issues
 Language and communication
 Individualism vs Collectivism
 Long term orientation

45. Toyota’s efforts
 Language- Communication
Inviting interpreters to the work floor, even in every interview to assure that no
misunderstanding happen
 PDI
 Encourage a flatter organizational structure
 Enhance internal communication
 Inspire young workers to participate in the group discussion and to speak up
their opinions
 Creating green fields
 Recruiting unskilled young people

46. The fruits of their efforts
• The company’s attire was accepted
• Alcohol ban at workplace was respected by
employees
• Employees did exercises together every morning
before starting their work

48. 5 D Model of Hofstede’s Cultural Dimensions for UK
1. Human society: Individualistic and collectivistic (IDV)
UK - In individualistic society
people are self-centered and seek fulfillment of their own goals
2. Uncertainty avoidance (UAI):
whether people like to take risk
degree to which people in a country prefer formal rules and fixed pattern of life, as means of enhancing their security
UK - high uncertainty avoidance index , risk aversion
3. Power distance index (PDI):
Britain is low on PDI
expect and accept power relations that are more consultative or democratic.
People relate to one another more as equals regardless of formal positions.
Subordinates demand the right to contribute to and critique the decision making of those in power
power distance index Hofstede defines does not reflect an objective difference in power distribution, but rather the way
people perceive power differences.

49. 4. Masculinity (MAS), vs. femininity:
UK high on scale in MAS.
“The distribution of emotional roles between the genders”
Masculine cultures’ values are competitiveness,
assertiveness, materialism, ambition and power.
In masculine cultures, the differences between gender
roles are more dramatic and less fluid
5. Long term orientation (LTO) vs. short term
orientation:
First called “Confucian dynamism”, it describes societies’
time horizon.
the UK is very low on LTO .
Unlike China here who is future oriented , UK values
promoted are related to the past and the present
Steadiness, respect for tradition, preservation of one’s face,
reciprocation and fulfilling social obligations.
5 D Model of Hofstede’s Cultural Dimensions for UK and
China

50. Cadbury TV Ads in UK -
https://youtu.be/NHtEyDrD4oA
Cadbury Ad for UK depicts these cultural difference very clearly and showcasing that a same brand while
advertising in many different country goes for different approach.
This Ad start with focusing on gorilla faces and shows how the gorilla is completely immersed in music and
then suddenly the gorilla start drumming and enjoying.
This Ad is core individualistic Ad which depicts that even gorilla can enjoy and be happy.
The complete focus on gorilla shows the individualism to the core and complete lack of society preference.
Using a gorilla in Ad subtly hints the lack of power distance in the society as gorilla itself is does not need
anybody approval on enjoying the music and drums.

51. FAILURE OF BRANDS

52. Culture clash at Pharmacia and Upjohn
 Merger took place in 1995

53. Difference between the American and
Swedes
 Meetings
 Local Practices
 Style of management
 Addition of costs

54. EURO DISNEY

55. CONCLUSION
One Size Doesn't Fit All !!