Cross-Culture Management Report: AFP's Cross-Culture Strategy

This report provides an executive summary and detailed analysis of cross-culture management, specifically focusing on Apex Food Point (AFP) and its expansion plans in Japan and China. It explores the company's background, including its origins, product offerings, and financial performance. The report uses ethnocentric and polycentric approaches to analyze the national cultures of Japan and China, identifying potential cross-cultural challenges and proposing solutions. The ethnocentric approach is highlighted as the preferred method for AFP to address cross-cultural issues, with discussions on its impacts, benefits, and drawbacks. The report also examines AFP's organizational structure, strategies, and aims. The report provides recommendations and references to support the analysis.

CROSS CULTURE
MANAGEMENT

EXECUTUVE SUMMARY
Cross culture management is the process involving different individuals, where all
candidates work together to accomplish common goal of the firm. Project describes the detail of
Apex Food Point (AFP) company and country detail in which it plans to expand or perform
business activities. Japan and China' national culture is being analysed by using polycentric and
ethnocentric approaches. Report shows that ethnocentric tool is better for Apex Food Point
(AFP) to resolve cross culture issues in the organisation.

TABLE OF CONTENTS
EXECUTUVE SUMMARY............................................................................................................2
INTRODUCTION...........................................................................................................................4
BACKGROUND INFORMATION OF THE COMPANY............................................................4
TOOL FOR NATIONAL ANALYSIS-..........................................................................................6
Ethnocentric approach............................................................................................................6
Polycentric approach .............................................................................................................9
CONCLUSION..............................................................................................................................13
RECOMMENDATIONS...............................................................................................................13
REFFERENCE..............................................................................................................................14

INTRODUCTION
Cross culture management represents the managing the work team in which include
several culture, practices and consumer's preferences for global or international business context
(Thomas and Peterson, 2016). This project will cover the background information of the Apex
Food Point (AFP) Company including the aim and structure used by the food Joint. And also
analysing the culture of the two countries on how these countries are working by using the cross
culture management. The report will reveal issues related to cross culture in company and will
find ways to solve it. Present study will analyses nation culture of countries.
BACKGROUND INFORMATION OF THE COMPANY
Company Information
Apex food point (AFP) company is one of the best leading food company in the world.
This company was founded in Germany and it was started in 2015.Its headquarter is located in
London (Bird and Mendenhall, 2016). Apex food point is also known for the confectionery item
that it creates such as milky way bars and it also creates non confectionery item or snacks such as
Combos, Uncle Ben's rice, pasta etc. As of 2017 AFP sold its products in 125 markets, and had
sales in 2017 of €23.61 billion. In first half of 2017 25% of sales came from specialized food
nutritions and 19% came from water and remaining 56% is came from the dairy and fast food
products.
Industry Detail
China's food industry mainly focuses of several categories of agriculture processing
products, manufacturing food products, wines and beverages- tea and tobacco. According to per
capita income food industries growth changed in multiple ingredients source further expanded to
better business. By keeping in mind food safety and health. The China food industry change the
ingredients source (Tjosvold, 2017). Like wise the china working. The food industry in China is
an attractive destination for many international investors as the F&B industry in China has US
700 Billion $ share of global market. For F&B products China maintains a solid regulatory
system. In China foreign investors needs to follow strict policies for trademarks, designs, unique
packaging features, copyrights policies of nation. The analyst assumes the annual growth rate of
12.8% along with the market worth of 36.67 Billion US $ by 2023 (Stahl and et.al., 2017).
Where as in Japan food and beverage industry includes retails supermarkets, department
stores, convenience stores and general merchandise stores. In 2017 the total value of Japan's food

and beverages sales was estimated as 473.3 Billion US $. The study based on 2018 for the period
of 2016-2024 stated that the compound annual growth rate of 2019-2024 will be 6.3% was
showed by the fastest chained food service dealing in full service by the food players McD,
Zensho, Starbucks and Yum (French, 2015). As the resident visitors in Japan in the year 2018 is
considered 31.3 Million people with the average of 56% youth on the basis of weekly dine out
(Jackson, 2018).
AFP company plan to start business with China and Japan;-
China- Apex food point company is planning to bring its products in China through many
people as possible and started its business in China through the acquisition of the nutrition food.
As China is the developed nation and its economic condition is very sound hence entering into
this country would be profitable decision for firm (Stahl and et.al., 2017).
Japan- AFP is also planning to start his business in Japan. With the boom of the Japanese
food and their interest towards the quality food the demand of the quality food is increasing in
mostly domestic market and the people are ready afford for the quality food. And hence AFP
company trying to enter this country which would be beneficial for the company.
Aims
The aim and objective of the Apex Food point company is to reduce food related risks
protecting health and safety by providing the best quality food items and improve quality of
food, also help consumer to make choice about food. Along supporting sustainable food
industries offering affordable and diversified eatables (Ramsey and Lorenz, 2016).
Strategies
Apex Food Point company using the Cross-cultural localization strategies. As it is
important to the development of the new products which can be launched in local markets easily
catch customer's taste and preference. Change in market develop different demand for example
any western fast food restaurant want to enter in japan food market growth china, then the China
market cannot use the same western product as in other countries but there is need to be
introduce innovative things for locals. And a region where Apex Food Point Company using the
Cross-cultural Localization strategies to improve the development of the new localized products.
Organizational structure
Flat organization structure is using by the Apex Food Point Company. As flat
organization structure refers to few and no level of department between the top as well as

executive level employee (Jackson, 2018). These type of organization boost up decision making
of it's employees. As it lower cost of operation Where it need not expenses recruiting the ground
and mid level managers and company utilize this resource for more benificial aspect such as
marketing and advertising which increase the productivity of the organization. And also it
improves the communication for flat structure executive and staff member communicate directly
without having intermediaries, it speeds the communication and also make the communication
clear and understandable (Holden, Michailova and Tietze, 2015).
TOOL FOR NATIONAL ANALYSIS-
Ethnocentric approach
The approach address the recruitment technique for international working in which
human resource is responsible for fixing appropriate person for right job on foreign grounds
based upon required skills along with will of the employee to cope up with the organization's
culture. Key position are filled by employees of parent's company in these company's.
Headquarters of these MNC's are responsible for decision making for vision, mission and
objectives of the firm.. This type of approach to the staffing procedure limits the carrier options
and opportunities of its local managers which may lead to the turnover of employees on the Apex
Food Point due to low morale (Tran, 2016).
By using The ethnocentric approach Apex Food Point might affect the private life of the
expatriates as they are to work in another country and adapt their environment and culture which
is far different and uncommon from what they are used too in their own birth country (Holden,
Michailova and Tietze, 2015).
Impact of ethnocentric approach on business -
The application of ethnocentric approach for Apex Food Point(AFP) a UK based
restaurant to expand the business activities in Japan and China include the following
repercussion that the employees from UK will be hired to perform business operation in Japan
and may face several of the pitfalls in the process of business activity -
MAY LEAD TO ISOLATION – As the employees may feel different around one another
, the people in the AFP a leading food chain in UK, expanding the business in Japan and
recruiting the employee from UK may lead to the factor of isolation as the employees may not be
able to connect in the environment or may feel differently challenged may lead to the fact that

they can possibly move towards the factor of isolation due to fear of sharing their thoughts and
feelings with unknown people and personalities(Dietz and et.al., 2017).
Whereas the implementation of ethnocentric approach for Apex Food Point to expand
business activities in Japan and China from UK can have several benefits of the business
activities -
INCREASE LEVEL OF DEVOTION TO COUNTRY – The approach applied by Apex
Food Point may eliminate the thinking of different political influences and structures as they
become loyal to what they posses (Primecz, Mahadevan and Romani, 2016). The people
eliminating the thinking of change won't have their point valued by the society followed by
different unknown nation and culture as well (Tran, 2016).
HELP PRODUCE HIGHER SELF ESTEEM – The approach is valued as it create
opportunities for people creating common ground. The people are motivated to connect and
maintain a health work environment amongst the one he is associated in the host countries of
Japan and China from it's origin develop rel;relationship amongst employees helping them in
crises(Hao, Farooq and Sun, 2018).
Positive effect of Ethnocentric approach in business expansion -
The ethnocentric approach can be used by the Apex Food Point in the expansion of the
business activities -
Develop better coordination -
The expansion of Apex Food Point in Japan and China will lead to better co ordination
between the host country(Japan and China) and parent country(UK) and thus will create better
control over subsidiary. The factor lead to the effective communication of the two maintaining
good and healthy working conditions(Guttormsen and Lauring, 2018).
Inheritance of culture -
The Apex Food Point from the parent country UK can easily transfer the culture to the
subsidiary country to influence the beliefs and practices to Japan and China. Thus will lead to the
inheritance of the culture in host country and maintain the decorum of the parent country
practices maintaining the decorum of UK's chain(De Cieri, 2017).
Hold control over subsidiary -
The AFP can easily hold the control over the subsidiary country by monitoring and
controlling it's activities from the parents country and control it's activities. The Apex Food Point

from UK can monitor close operations to the subsidiary firms so as to closely monitor the
activity and practices by implementing several laws and policies over them(Putranto, Gustomo
and Ghazali, 2015).
Negative Effect of Ethnocentric approach in business expansion -
Government restrictions -
The expansion activity of AFP into Japan and China may be hampered if the government
implementation any restriction in the host country UK due to several rules, restrictions and
practices varying from that of parent's company (Hao, Farooq and Sun, 2018).
Cultural clashes -
The expertise of Apex Food Point from UK branch and staff members from the Japan and
China branch can develop clashes due to difference between the culture may create a pitfall
between the expansion of the business. The employees from UK might face difficulties and
challenges coping up with the culture of Japan and China (Primecz, Mahadevan and Romani,
2016).
Monitoring employees -
The employees in the host countries are difficult to provide guidance from the parents
country to mange several business activities and practices, then practice of guiding and
monitoring the employees is difficult to manage. The practice will also allow happenchance of
unethical activities as there is existence of no or very few supervision and control (Ramsey and
Lorenz, 2016).
Usefulness of ethnocentric approach in business expansion -
The Apex Food Point can use the ethnocentric approach in the expansion in following
ways -
 The adaptation of this type of approach will create effective communication between the
headquarters in UK and the host countries in China and Japan (Hao, Farooq and Sun,
2018).
 Develop wider ability of expatriates to move from parent to the subsidiary.
 The ethnocentric approach helps in developing effective communication between the
headquarters and the subsidiary.

 Good control is another benefit of this approach, as it firm implements this method then it
can be able to control over subsidiary firm which will help in effective functioning of
operations.
 Maintain company value as the employees of UK branch of Apex Food Point will carry
the work ethics, customer service, productivity to China and Japan (Holden, Michailova
and Tietze, 2015).
Drawbacks of ethnocentric approach in business expansion -
The Apex Food Point must consider the following drawbacks from the use of
ethnocentric approach for the business expansion in China and Japan -
 The UK headquarters might face difficulties in adjusting in international assignments
with Japan and China due to their cultural differences (Jackson, 2018)
 The implementation of business expansion through ethnocentric approach can invite
several legal regulation from the host country that is UK and thus involve in legal
indignations.
 The Apex Food Point might face cultural clashes between executive members of parent
company as well as in staff members f host country and may lead to ineffective working
conditions.
 Restriction from government in host country might hamper business activities of parents
country affecting business conditions of parents country as well.
Polycentric approach
As Apex food point of UK is expanding its business in japan and china. The company is
applying Polycentric approach in which nationals of japan and china will be recruited for
managerial positions for carrying the transactions of Apex food point. The principle focus of this
approach is to make the locals know their society, culture, political scenario and market
conditions in better way as well as for running the business effectively in comparison to other
countries. It is the type of approach where managers of host countries are sent in other nations to
work their (Polycentric Approach, 2016). That means managerial position is filled by host
country only to run subsidiary firm. In this approach all the top management employees to run
and operate company affectively formulate business strategies and visions as well.. The objective
of this method is reducing the cost. There are various implications that can arise for Apex Food
Point by applying this approach:-

 Communication problem can arise between the managers of host country in subsidiary
company and parent country nationals managers in Headquarters because of language
barriers (Dietz and et.al., 2017).
 Coordination difficulties is the another problem that can arise among the headquarters as
well as subsidiaries due to cultural boundaries because the culture and believes are totally
different in japan and china as compare Positive impact of polycentric approach d to UK.
 The conflict can develop among the mangers of host and parent company because of the
thinking process is different in every country (Jackson, 2018).
 Another problem may arise regarding the career paths for Managers among the Host
country and parent country because of the limited opportunities in order to gain
experience from outside or will have limited exposure regarding international operations
which can result to problem in decision making and allocate the resources (Ramsey and
Lorenz, 2016)
 These all above discussed implications can lead to expatriate failure for Apex food point
like high cost can occur for selecting and grooming the managers, huge disruption can
occur when director leaves which can result to reduced productivity and it can also lead
to break customer relationships and reduces the morality that can affect the image of the
company.
Illustration 1: Polycentric Approach
(Source: Polycentric Approach, 2016)

Positive impact of polycentric approach
 There are various advantage that Apex food point can have by applying the Polycentric
approach are:-The background information of the company
 Apex food point (AFP) company is one of the best leading food company in the world.
This company was founded in Germany and it was started in 2015. Its headquarter is
located in London (Stahl and et.al., 2017). Apex food point is also known for the
confectionery item that it creates such as milky way bars and it also creates non
confectionery item or snacks such as Combos, Uncle Ben's rice, pasta etc. As of 2017
AFP sold its products in 125 markets, and had sales in 2017 of €23.61 billion. In first half
of 2017 25% of sales came from specialized food nutritions and 19% came from water
and remaining 56% is came from the dairy and fast food products (Thomas and Peterson,
2016).
 Food Industry like in China. The type mainly focuses on several major aspects that are
agriculture processed articles, manufacturing food products, wines and tea and coffee.
According to growth of food industries based upon per capita income fluctuated in
variety of ingredients source along with several better as well as developed commerce.
By keeping in mind food safety and health. The China food industry change the
ingredients source of local origin to global sourcing with imports playing an ever increase
in role of new products. Like wise the china working (Holden, Michailova and Tietze,
2015).
 Where as in Japan National and international companies are operating almost every sub
segments of the Japanese food industries, make available of more varieties of food to the
customer influencing trend for highly receptive cultures. Japanese eatable industry offer
commercial opportunity all of front's Japan food industry is not commitment to deliver
delighted services to the customer through aim to rapidly change individuals demand and
supply, ageing population and resulting demand for health and wellness products.
Likewise the Japan stand for front of food industries market development (Guttormsen
and Lauring, 2018).
 By recruiting the employees of host country (japan and china) will allow the
multinational company (i.e UK) language barriers will get eliminated as well as will

confront the adjustment problems regarding the expatriate mangers and reduces the
requirements for expensive training and social awareness programmes.
 Employing the host country nationals is less expensive and at the same time allows
multinational company for keeping the profile low in constrained meningiomata political
conditions (De Cieri, 2017).
 This approach will also result to consistent and better improvement of employees and
will boost t high morale for staffs as well as better customer relationships for long term
that will result to low turnover which will help Apex food by providing various career
opportunities.
 This method will help the parent company(Apex food) of UK in increasing better
productivity because of the better knowledge of Host country( Japan and China) that will
result to better decision making (Polycentric Approach, 2016).
Negative impact of Polycentric approach in business expansion
The Apex Food Point might face several disadvantages on the application of this type of
approach -
 Their might be difficulty to bridge the gap of employees of Apex Food Point between the
host country nation subsidiary managers and parent country nation managers.
 The employees of APF might face barriers of national loyalty, language and culture
differences with that of the headquarters (Dietz and et.al., 2017).
 The Apex Food Point might face difficulty in to exercise the control over it's subsidiary
thus will result in losing of control and affect the expansion of business activities.
 Apex Food Point might face conflict between the managers of it's host as well as parent
country due to cultural differences.
Usefulness of Polycentric approach
 The Apex Food Point can use the polycentric approach in the expansion of business in
following ways -
 The implementation of this plan by Apex Food Point will result in elimination of
difficulties of adjustment made by foreign countries employees.
 The firm as well as the employees will receive better support of the government at times.
 The recruitment of employees for business expansion is less expensive in this concept
and that too aid in increase the morale of the local staff (Ramsey and Lorenz, 2016).