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Managing the Global Culture - Assignment

   

Added on  2021-05-27

8 Pages1547 Words50 Views
Leadership Management
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Running head: MANAGING THE GLOBAL CULTUREManaging the global cultureName of the studentName of the universityAuthor note
Managing the Global Culture - Assignment_1

1MANAGING THE GLOBAL CULTUREAnalysisBusiness model of McDonalds In India, McDonalds follows the policy of joint venture. In accordance to their businessmodel, they are having joint ventures and partnerships with two franchises in India. However,the issue emerged between them and the Connought Plaza Restaurants Pvt Ltd. This new venturewas initiated between McDonalds and Indian business man Vikram Bakshi as a 50:50 jointventure. However, the issue was being emerged due to the non renewal of the license betweenthe partners. This led them to close their majority of the shops in Northern and Easter India(Ahluwalia 2018). One of the major reasons being identified behind the failure of the jointventure between McDonalds and Vikram Bakshi is the ineffective supplier relationshipmanagement and the cultural gap between the Indian and American organizations. This is due to the reason that ineffective supplier relationship management causedinadequate determination of the requirements of the partners in the joint ventures. In the case ofMcDonalds, Vickram Bakshi accused McDonalds of serving lower quality food and not valuingthe customer feedback and McDonalds accused that Vickram Bakshi for not adhering to thecommitments of the joint venture and concentrating on the business development. Thus, it isevident that there is a lack of communication and coordination occurred between the partners.Another reason identified is the cultural differences. This is due to the fact that the pattern andapproach of the business operation in India and the United States are different. This led to theemergence of issues and misunderstandings between McDonalds and Vickram Bakshi(Ahluwalia 2018). The last reason being identified for the issues is McDonald’s ineffectivechoice of entry mode strategy in India. This is due to the reason that government of India
Managing the Global Culture - Assignment_2

2MANAGING THE GLOBAL CULTUREcurrently allows 100 percent of foreign direct investments in the food sector including theprocessed and manufactured foods in India, Thus, McDonalds should have their own chains ofrestaurants in India rather than initiating the joint venture. This would have helped them toprevent the issues of joint ventures (Malhotra 2014). Moreover, it is also reported that due to thelimitations in the joint venture, McDonalds is not having the entire control over their brandmanagement (Chang, Chung and Moon 2013). However, in the case of foreign directinvestments, McDonalds would have their entire control of the brand management. The following sections will discuss about the cultural differences between the Indian andAmerican approach of doing business. In doing so, Hofstede’s cultural dimensions will be usedin order to identify the gaps between the two countries. Cultural gapsPower distance One of the major differentiating cultural differences between the United States and Indiais power distance. According to the report of the Hofstede’s cultural dimensions, India is havingmore score compared to the United States. This denotes that India is having higher hierarchylevel in the organization compared to the United States (Dartey-Baah 2013). In the case ofMcDonalds, the issue between them and Vickram Bakshi got emerged due to the differentapproach of power distance in the organizations. Vickram Bakshi being Indian originbusinessman is having more preferences for the hierarchical organizational structure. However,on the other hand, McDonalds maintains more flexible organizational structure. It is reported thatVickram Bakshi and McDonalds are having 50:50 share in the joint venture. Thus, the authority
Managing the Global Culture - Assignment_3

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