Management Report 2022

Running head: MANAGEMENT
Management
Name of the Student
Name of the University
Author Note

1MANAGEMENT
Executive Summary
The purpose of this report is to analyse and evaluate the potential challenges that might be faced
by Kmart while expanding its business in South Korea. I order to assess the cultural differences
between South Korea and the origin country that is Australia, analysis will be done with the help
of Hofstede Insights, Trompenaars cultural analysis, Globe project and Hall's Cultural
Framework. Effective recommendation to deal with the issue along with three modes of entry
that can be opted by Kmart will be conducted.

2MANAGEMENT
Introduction
The Kmart Australia Limited refers to an Australian chain of retail stores that is owned
by the Wesfarmers. It is popular as a low cost store chain and currently operates more than 228
stores across Both Australia as well as New Zealand. The organization is one of the popular
retail stores in Australia and currently the yearly revenue of Kmart is more than 2.3 billion
Australian dollars. However, considering the fact that the retail industry of Australia is highly
saturated, Kmart is currently facing several issues in order to maintain as well as enhance its
consumer base in the highly saturated Australian Market. In order to deal with them mentioned
issue, the management of the organization have decided to expand its business to a less saturated
eastern part of the world. Currently, the first target of expansion for Kmart is South Korea.
However, the management is aware of the cultural difference and the barriers related to the same
that have to be faced by the company to establish and expand their business n the foreign
country. In the following paragraph, various managerial challenges that might be faced by Kmart
due to cultural differences will be analysed.
Findings
Due to the emergence of globalization, a good number of organizations are operating in
different parts of the world. This expansion of organizations gives birth to multicultural
organizations with diverse workforce. Considering the fact that the geographical distance of
South Korea and Australia is huge since the two countries are situated at two different parts of
the world, it can be clearly understood that the cultural differences between the consumers of
both the retail industry is ample. Due to the cultural difference between the two countries, the

3MANAGEMENT
management of Kmart is more likely to face issues with leadership, staff handling,
communication with various stakeholders, ethics, negotiations with stakeholders, marketing, etc.
Cultural difference analysis by Hofstede Insights
Power and distance: Considering the fact that the Hofstede score of South Korea is as high as
60, it can be understood that the organizational culture of the nation is higherarchical (Koo et al.,
2016). Majority of the less power members of the organization expect and accept the unequal
distribution of power. However, when it comes to Australia, hierarchy is established for
convenience, superiors are always accessible and managers rely on individual employees and
teams for their expertise. Thus, a conflict associated with power may affect the Kmart
organization Adversely in South Korea.
Individualism: The term individualism reefers to the he degree of interdependence a society
maintains among its members. Individualism is high in Australia and highly less in South Korea.
Unlike Australia, where recruitment and promotions takes place on the basis of merit, in South
Korea, that take place eon he basis of moral Terms that includes a family link or acquaintance.
According to the Trompenaars cultural analysis, South Korean organizational culture believes in
Particularism while the same in Australia is believed to be Universalism (Coe, Lee & Wood,
2017). Thus in South Korea the management of Kmart may face difficulties while making
decision on the basis of corporate ethics. This factor has the potential to create a highly negative
impact on staff handing. South Korean Staff may expect promotion and facilities on the basis of
acquaintance which if refused may result in South Korean staff attrition and reduced reputation
of the organization (Smith et al., 2016). On the other hand, implement of South Korean
particularism may result in conflict and attrition of Australian staffs.