Foodland Supermarkets of Australia: Cross-Cultural Challenges and Solutions for Entering the Chinese Market

The paper evaluates the challenges faced by Foodland Supermarkets of Australia while entering the Chinese market due to cultural differences and provides effective solutions. It also discusses the modes of entry and theories for cultural analysis.

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Foodland Supermarkets of
Australia

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Executive summary
The paper will evaluate information regarding the Foodland Supermarkets of Australia. The firm
is planning to expand their respective business procedures throughout the overseas market
segments. For entering the overseas market of China, the firm has selected “export” as the
desired mode of entry because his mode will provide more benefits as compared with other entry
modes. It has been seen that the firm has faced several management issues due to the cultural
differences of both countries, Australia and China. The issues are mainly related with the leading
and managing the staffs belonging to the diverse culture. The issues are also related to the
miscommunication that existed because of the diverse culture of the employees. Also, effective
solutions to these issues will be provided throughout this paper. There are few theories which
will help in understanding the issues in more detail. Moreover, some vital recommendations will
help Foodland Supermarkets to reduce their cross-cultural problem while doing business in the
overseas market.

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Table of Contents
Table of Contents........................................................................................................................................2
Introduction.................................................................................................................................................3
Findings.......................................................................................................................................................4
Conclusion...................................................................................................................................................8
Recommendations.......................................................................................................................................8
References...................................................................................................................................................9
Appendices................................................................................................................................................11

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Introduction
The primary purpose of the paper is to provide information regarding the Foodland
Supermarkets. This firm is present in the concerned market segments of Australia and they are
trying to enter into the Chinese market. Therefore various management issues are faced by the
Foodland Supermarket while entering into China due to the cultural differences and these issues
will also be discussed briefly in this paper. In addition proper modes of entry of entering this
firm in the Chinese market will also briefly discussed in this paper. It has been seen that the
supermarket faces various challenges due to the cultural differences of Australia and China. The
issues are mainly related with the managing the staffs belonging to the diverse culture and also
various management problems. The communication issues are also present in this supermarket
mainly due to the diverse culture of the employees that belongs to different countries, Australia
and China. Also, effective solutions to all these issues will be provided throughout this paper.
Furthermore, the use of various theories are useful for determining the cultural dimensions and
these theories will be further explained in relation with the business procedure of the firm.
Moreover, some vital recommendations will help Foodland Supermarkets to reduce their cross-
cultural problem while doing business in the overseas market.
Overview of Foodland Supermarkets and its organizational culture
Foodland Supermarkets is one of the fastest growing firms of Australia, and they primarily serve
over 120 locations and is one of the largest supermarkets throughout the world. Different shops
and stores of Foodland are independently owned and operated by the directors of this firm. The
company mainly provides food, groceries, and drinks of all brands and thus it is considered to be
one of the best supermarkets in Australia (Foodland, 2018). The organizational culture of this
firm is entirely different, and employees have a mutual understanding with each other regarding
the work-related matters. Some issues are present regarding salary and wages because the
payment procedure gets delayed due to internal problems within the workplace.
General description of China and its culture
The Foodland Supermarket is planning to expand their business in China, and for developing
their business, it is essential to know culture and tradition that exist in china. It is found that
China comes first regarding its population and therefore the country has a different cultural

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background (Radford, 2016). The diverse cultures are mainly based on various factors like food
style, religion, language, music and so on. The Chinese people are mainly fond of ethnic and
diversified foods and thus Foodland Supermarket will help these people to get fresh food and
drinks from their shops.
Modes of entry used by Foodland Supermarkets
The method of entry which should be followed by the Foodland Supermarket of Australia to
enter into the China market is “franchisee”. Franchisee is defined as the process of selling the
products or services under the name of other firm called the franchisor (Malek, Umberger, &
Rolfe, 2018). It is noted that franchisee modes of entry can help this Foodland Supermarket to
easily establish their brand in the Chinese market. Through this mode of entry, the firm can
easily distribute their surplus to entire market segments. In other words, it is a less costly
approach, and by using this mode of entry, Foodland Supermarkets can easily get success
throughout the China market segments. Besides this, the use of the franchisee mode will help the
firm to easily highlight their brand within the new market, and therefore it will build a strong
control of the supermarket over the concerned markets in China. Apart from this, with the help
of through this franchisee mode of entry the supermarket can easily develop their stores in China
by having collaboration with other leading companies in the market. Moreover, the Foodland
Supermarket can easily open their stores through their own sole proprietorship and thus it will
help the firm to build independent shop with little support from the other party. Besides this, the
other party, who will take the franchisee to run the business of Foodland Supermarket will also
help this international firm to settle their shops in such markets of China. Furthermore, the
business will get various opportunities to increase their market share. Different locations will be
selected by Foodland Supermarket to open more number of stores. Therefore it is clear that with
the help of this franchisee mode the Foodland Supermarket can easily open stores in the market
of China.
Findings
Cross-cultural conflicts and its solution
The findings evaluates the fact that Foodland Supermarkets is looking forward to start their
business in different market segments of China, and as the culture of this country is different,

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therefore, some management challenges will occur due to cultural differences (Mueller, Diehl &
Terlutter, 2015).
Challenges in managing the team- One of the major challenges that may be faced by the firm is
managing a team of the diverse workforce. It is found that the Chinese employees may respond
best to the firm’s loyalty as well as prestige, whereas Australian employees may be seeking
opportunities for compensation and personal development (Birch, Bonney & Murray, 2014).
Therefore, it becomes difficult for the leaders to manage employees coming from different
background. Another management problem that may be witnessed by the leaders as well as the
managers of Foodland Supermarkets is managing their staffs. As the firm’s home country is
Australia and the firm is going to develop their business in China, therefore, a language barrier
will be present in between the employees, customers and the managers.Hence, it builds problem
to understand each other’s thoughts as well as feelings, and thus it becomes difficult for the
managers to handle their staff that mainly comes from diverse culture.
Problem in communicating with the workers of different culture-Another critical issue that
may be faced by the management team due to cross-culture is to understand the communication
style of employees belonging to different cultures. It is seen that for most people of Australia, the
communication approach is open and precise and more emotional and hence they are considered
as direct communicators (Wei, Zheng, Liu & Lu, 2014). On the other hand, the communication
approach of most of the Chinese people is not often explicitly stated, and they react according to
the information provided, and hence they are called subtler communicators. From this, it is clear
that due to their different communicational approach it becomes difficult for both the employees
of Australia and China to communicate easily with each other. Due to this reason, it becomes
difficult for Australian employees to convince the Chinese people to buy their food products
from the firm (Groves, Feyerherm & Gu, 2015). In other words, not obeying the workplace
ethics is considered as one of the vital challenges which occurs due to the cultural differences
between two countries. It is seen that the Chinese people often work hard to achieve their goals
and also motivate other people to work harder whereas the Australian employees work only for
certain period of time and hence it causes difficulty between the workers of both countries.
Management issues- In other words, it is identified that crucial differences between employees
belonging to different cultures can also vary in their attitudinal context. The differences are

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mainly found in their workplace confrontation by assuming working hours as well as rules and
regulation (Masso & Vahter, 2015). Hence these differences between different cultured
employees may give rise to huge management issue in the Foodland Supermarket. For
diminishing this management issues, a proper strategy should be applied so that they can easily
solve their problems in the upcoming days. It is evaluated that the firm faces problem in
managing their employees belonging to the diverse culture and for diminishing this issue a leader
or a manager of the foreign market should be appointed by the firm who retains excellent
knowledge of both the cultures (Bird & Mendenhall, 2016).
In other words, the top management team should have to provide proper commitment to the
diverse staff about their job roles as this will build their trust over the manager and by this way
management can easily manage their staffs. Beside this, another solution of management issue is
that, manager or top-level officer as well as Australian employee, always have to understand the
differences in cultural values of these Chinese people. After understanding their cultural
differences, it will become easier for the Australian employees to reduce the gap that exists
between them. Hence it will also enable the Chinese employee to build a strong relationship with
their employees, and thus their communication problem will reduce a lot (Sackmann, 2015).
Also by developing effective communication style by the employees, will enable them to
understand the cultural aspect of both countries and this will help the employees to maintain
ethics within the workplace. Hence by applying this method, it will help the Foodland firm to
diminish their management issues that frequently occurs due to cultural differences of both
countries.
Application of theories for cultural analysis
The various theories that should be applied by this Foodland Supermarket to determine the
culture of different countries are as follows:
 Hofstede’s cultural dimensions: The theory of greeting Hofstede states that culture is
often considered as a source of conflict rather than synergy (Dietz et al., 2017). The
cultural differences are regarded as the nuisance at best and often a disaster. To explain
the theory, Hofstede used five cultural dimensions, and these are power distance,
individualism vs. collectivism, long-term vs. short-term orientation, uncertainty
avoidance and indulgence vs. restraint

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 Trompenaar’s cultural dimensions: This dimension is developed by Fons
Trompenaar’s that helps a firm to understand the differences between various cultures in
an effective manner. To determine the differences in people from one culture to another,
Trompenaar's and Hampden-Turner used seven cultural dimensions. The cultural
dimensions are universalism versus particularism, neutral versus emotional, specific
versus diffuse, achievement versus ascription, internal direction versus outer direction,
individualism versus communitarianism and sequential time versus synchronous time
(Mazanec, Crotts, Gursoy & Lu, 2015)

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Conclusion
The paper concluded that the Foodland Supermarkets of Australia is planning to start their
business in the overseas market of China and for this reason they have chosen the “exporting”
entry mode to enter into the Chinese market. This supermarket provides fresh local food and all
range of groceries to their customers to maintain a good position in the market. Also, it is noted
that many challenges have been faced by the firm in their management procedure and for
diminishing these problems proper strategy should be applied by the firm. Moreover, the
Hofstede and Trompenaar's theory of cultural dimension also helps the firm to understand the
differences between both cultures in an effective way.
Recommendations
 It is recommended that proper training should be given to the Chinese employees so that
they clearly understand the organizational culture of this Foodland Supermarkets
 It is strongly recommended that managers need to arrange meetings with the diverse
group of employees, then it will build good communication between them
 In order to enhances the communication approach between the employees belonging to
different culture it is necessary for the manager to communicate easily with their juniors
so that their hesitation or fear of talking will decrease
 It is also recommended that in order to decrease the management issues, the management
team will appoint a leader that have knowledge about handing the employees belonging
to different culture. Therefore, with the help of these employees the management team
can easily decreases their issues in future
 It is recommended that for maintaining the team of cross-cultural workers it is necessary
for the firm to appoint a manager that have proper experience of handling other cultural
staffs in the particular workplace. Moreover, it is important for the employees to follow
the rues and regulation of the firm as it will help in improving the overall brand image of
the firm in front of the concerned customers.
 The selection of the location becomes very crucial as in enhancing the overall
effectiveness of the entire business processes. The Communication processes throughput
the concerned workspace needs to be enhanced with proper techniques as it will help in

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reducing any type of miscommunication or errors within the workplace among the
employees.
 On the other hand, the collaboration with the desired working partners should be done
with great effectiveness as it will help in bringing more customers to the firm. The
message of respective each other’s culture needs to be communicated across the
workplace among the employees as it will help in establish the business with franchise
mode of entry.

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References
Birch, C. J., Bonney, L., & Murray, S. (2014). Exciting future for graduates in the food industry–
from agroecosystem to consumer health. Chronica Horticulturae, 54(1), 7.
Bird, A., & Mendenhall, M. E. (2016). From cross-cultural management to global leadership:
Evolution and adaptation. Journal of World Business, 51(1), 115-126.
Dietz, J., Fitzsimmons, S. R., Aycan, Z., Francesco, A. M., Jonsen, K., Osland, J., ... &
Boyacigiller, N. A. (2017). Cross-cultural management education rebooted: Creating
positive value through scientific mindfulness. Cross-Cultural & Strategic
Management, 24(1), 125-151.
Foodland SA. (2018). Foodlandsa.com.au. Retrieved 13 October 2018, from
Groves, K. S., Feyerherm, A., & Gu, M. (2015). Examining cultural intelligence and cross-
cultural negotiation effectiveness. Journal of Management Education, 39(2), 209-243.
Malek, L., Umberger, W. J., & Rolfe, J. (2018). Segmentation of Australian meat consumers by
attitudes regarding farm animal welfare and the environmental impact of meat
production. Animal Production Science, 58(3), 424-434.
Masso, J., & Vahter, P. (2015). Exporting and Productivity: The Effects of Multi‐Product and
Multi‐Market Export Entry. Scottish Journal of Political Economy, 62(4), 325-350.
Mazanec, J. A., Crotts, J. C., Gursoy, D., & Lu, L. (2015). Homogeneity versus heterogeneity of
cultural values: An item-response theoretical approach applying Hofstede's cultural
dimensions in a single nation. Tourism Management, 48, 299-304.
Mueller, B., Diehl, S., & Terlutter, R. (2015). GLOBE cultural dimensions: Providing insights
for advertising execution in the Global marketplace. In Advances in Advertising Research
(Vol. V) (pp. 161-175). Springer Gabler, Wiesbaden.
Radford, D. (2016). ‘Everyday otherness’–intercultural refugee encounters and everyday
multiculturalism in a South Australian rural town. Journal of Ethnic and Migration
Studies, 42(13), 2128-2145.
Sackmann, S. (2015). Introduction: taking stock of critical issues and relevant topics in the fi eld
of cross-cultural management. In The Routledge Companion to Cross-Cultural
Management (pp. 53-57). Routledge.

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Wei, Y., Zheng, N., Liu, X., & Lu, J. (2014). Expanding to outward foreign direct investment or
not? Multi-Dimensional analysis of entry mode transformation of Chinese private
exporting firms. International Business Review, 23(2), 356-370.

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Appendices
Figure 1: Hofstede cultural dimensions showing five cultural aspects of Australia
and Vietnam
(Source: Dietz et al., 2017)

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Figure 2: Trompenaar’s cultural dimensions
(Source: Mazanec, Crotts, Gursoy & Lu, 2015)