Diversity Management in Multinational Companies: A TESCO Case Study

This report provides a comprehensive analysis of diversity management within multinational companies, using TESCO as a case study. It begins with an introduction to cross-cultural communication and its importance, followed by an exploration of relevant cross-cultural theories, including Hofstede's cultural dimensions, and how national cultural differences influence people management. The report examines the application of these theories within TESCO, a global retail brand, and analyzes how the company navigates cultural barriers. The report also discusses various communication barriers such as ethnocentrism, stereotyping, language differences, geographical distance, and conflicting values that impact the efficiency of multicultural teams. Furthermore, the report provides strategies that TESCO employs to overcome these barriers, such as fostering a common language, adapting communication styles, and planning projects across different time zones. The report concludes with a summary of key findings, emphasizing the importance of training and learning in developing cross-cultural understanding, and the practical application of theories to address the challenges of diversity management in a globalized business environment.

Diversity management

Table of Contents
PART 1............................................................................................................................................3
INTRODUCTION..................................................................................................................3
PART 2............................................................................................................................................4
Relevant cross-cultural theories, how national cultural differences might influence the
management of people............................................................................................................4
PART 3............................................................................................................................................7
Managers might overcome barriers to effective communication in multicultural teams.......7
CONCLUSION..............................................................................................................................10
REFERENCE.................................................................................................................................11

PART 1
INTRODUCTION
Cross cultural communication is a very crucial tool for all multinational companies
according to their prospective of growth, scale and expansion in various international markets.
Cultural differences are the way people are making decision, following orders and organisation
are dealing with the tremendous challenge of getting things done. There are major two areas that
are to be considered for the purpose of strategically looking at different areas of cross cultural
setting. It includes development of cultural understand & sensitivity among employees and
executives by learning and education prices. Second objective is to adjust communication styles
according to culture and market needs for various initiatives, projects and programs is that
decisions are properly managed (Cagliero, 2020). Presently the report is based on the evaluation
of the way multinational Companies like TESCO is adapting and dealing with different cross
cultural barriers that are leading to situations of need of strategy formulation in order to deal with
its negative impact on the overall functioning.
TESCO is a British mutational organisation that is dealing in grocery and merchandise having its
headquarters in England. It is the third largest retail brand across world that is measured by
gross revenues.
TESCO is having presence across seven countries that includes Europe, Asia, Ireland, Thailand
and Hungary. It was founded by Jack Cohen in 1919 started as a group of markets stalls in
Hackney, London.
TESCO has a mission is to have long term success and a focussed business scenario (Higueras-
Castillo, Munoz-Leiva and Liébana-Cabanillas, 2019).
Mission is to remain constant in their business strategies and business practises so that they are
able to continuously adapt to changes environment in the competitive global environment.

Vision is the aspiration view where the business is willing to be and is providing a benchmark
for various stakeholder in TESCO.
Above mentioned are the strategic mission & vision of TESCO that are focussed on dealing with
all the barriers that arise in the process of cross cultural expansion of TESCO.
PART 2
Relevant cross-cultural theories, how national cultural differences might influence the
management of people
For the purpose of managing functions at cross culture there is implementation of some cross
culture management theories in TESCO in order to understand the basic process that assist in the
management of cross culture:
Hofstedes cultural dimensions theory:
It was developed by Geert hofstede where the main framework is used for understand the various
differences of culture across countries and the way business are performing at different cultures.
It is a framework that has been used for distinguishing across various national cultures and asses
the impact on business settings (Walsh,and Winsor,, 2019). There are six categories that are
identified according to cultural dimensions as mentioned below:
Power distance index:
It is considered as the extent to which the inequality or the power is tolerated in the organisation.
The power and inequality are viewed from followers view point. In TESCO there is high power
distance index that is indicating a culture accepting inequity & power differences,
encouragement of bureaucracy that is showing high respect for authority and rank. Lower power
distance index is indicating a culture that is encouraging a structure of organisation that are flat
and the decision making responsibility is decentralized because of application of participative
management style.

(Source: Hofstede’s Cultural Dimensions, 2017)
Individualism vs. collectivism:
Individualism is indicating higher importance ion attainment of personal gaols and self image is
categorized as “I”. collectivism is indicating greater importance on goals & group well being.
The person self image is categorized as “WE”. In TESCO there is use of collectivism approach
where the major emphasis is on team performance for achievement of cross cultural
management.
Uncertainty avoidance index:
It is considered as the extent to which ambiguity or uncertainty can be tolerated. If the
uncertainty avoidance index is high then there is low tolerance for ambiguity, uncertainty and
taking of risk (De Piano, 2020).
Low uncertainty avoidance indicates high tolerance for ambiguity, risk taking and ambiguity. It
is more openly created and accepted according to regulations and rules.
Masculinity vs femininity:
Masculinity is a dimension that is part of distinct fender roles, concentrating on material
achievements and is assertive with wealth building. Femininity on other hand is coming up with
fluid gender roles, nurturing, modest and quality of life.
Long term orientation vs short term orientation:
Illustration 1: Hofstedes cultural dimensions

Long term orientation is focussing on future and involves a deal in short term success and
gratification to achieve persistence, long term growth and perseverance.
Short term orientation is showing the near future and involves delivering of short term success
that is placing stronger emphasis on Present and future. There is focus on long term success in
TESCO to achieve higher sustainability across international borders.
Indulgence vs Resistant:
This is a dimension that is considering the tendency and extent for a society to fulfilled the
desires. This dimension is revolving around the way society is controlling the desires and
impulses. Indulgence indicates a society free gratification and restraint is suppressing of
gratification of needs and the regulation through use of social norms (Jin, and Chen, 2019). In
TESCO the top management is laying emphasis on indulgence so that overall workforce can
work in a flexible environment.
From above made discussion it can be summarized that hofstede is a great source of
understand the culture impact on life and work. It is accessed to develop detailed insights of
dimension of the way countries differ across cultures.
High context and low context culture:
The basic concept of high & low context that was introduced by anthropologist Edward T. Hall
in 1976, it is used for developing the insights in the way culture is used for communicating. In
case of high context cultures the communication is highly implicit and there is importance laid
on relationship and context as compared to actual words. In low context cultures there is focus
on the way message is being communicated to entirely by words and has to be entirely explicit.
In TESCO the markets of England are high context as compared to Denmark it is low in Japan.
In TESCO the high context cultures is relying on the traditions, deep personal relationships and
prevailing hierarchies. In case of markets having low context cultures there is requirement of
same depth of tradition and short term relationships (Gray, 2017). The headquarters of TESCO
being a MNC are present in UK so apart from UK in all the international locations TESCO has to
deal with a situation of low context cultures.
There are certain specific feature of a high context cultures on TESCO as mentioned below:
 Value traditions
 Fostering of long lasting relationship.
 Relying on use of facial expression and non verbal signs, body language

 There is requirement of very little explantation' Collectivisms where there is presence of
value group harmony.
 There is more collectivism approach as person belongs to certain familiar groups
 There is very slow process of change.
PART 3
Managers might overcome barriers to effective communication in multicultural teams
There are certain barriers that arise when multi national companies are willing to expand across
various other borders. Some of these barriers that are faced by TESCO are mentioned below:
Ethnocentrism:
Ethnocentrisms is happening when there is a implicit way of doing certain activities and there is
just one specific way that seems to be right. If there are nay negative judge behaviours then they
do not conform with the vision of world. It creates a detrimental mentality (Gupta and Bhaskar,
2016).
There are certain barriers that might lead to affecting the overall process of cross cultural
communication in a negative manner. In Context of TESCO such barriers are mentioned below:
Person who is from a low context culture might behave in a way that can be incompetent, rude,
ignorance in a situation of high context culture by asking lot of questions. There are some
countries who are part of high context that includes china, japan, Arab countries. And low
context culture includes Germany, US and Scandinavia. It has to be noted that all the
characteristics have to be applied to cultures according to the high and low context in TESCO
(SIX BARRIERS TO CROSS-CULTURAL COMMUNICATIONS, 2016).
Stereotyping:
It is also a barrier that may arise because of memorizing of different cultures that can reinforce
the process of stereotyping. There has to be learning of differences as it is not possible to predict
a person behaviour according to their nationality.
Language barriers:
There are issue related to language barriers as people who are not fluent with language can lead
to increasing of challenges and it leads to creation of social distant amongst them. It also affects
the competence and performance level of people.

Geographical distance: In virtual teams across globe there are visitations when it is not possible
to focus on intercalation and building up of relationship in the office environment. So TESCO
has faced large amount of barriers because of collaboration of virtual teams as there are more
challenging groups across head office that may also feel exclude sometimes.
Conflicting values:
Culture is a type of ice berg if behaviours are not predicted properly then it might create cultural
clashes that might result into people compromising with their own values. In TESCO the top
Management has inculcated a set of values where there is no basic right or wrong way defined of
doing certain things but it is defined as set of cultural norms that have to be followed in order to
deal with some conflicting cultural values (Ukpong, 2017).
Strategies to deal with cultural barriers:
There are some strategies that are used in TESCO for the purpose of dealing with the large
number of barriers that arise while the organisation is willing to expand themselves across
borders:
overcoming of cultural and language barriers:
One of the most challenging situation that arise for employees who are part of
multicultural teams in TESCO is to deal with language barriers. Each members is using a
different language for speaking is there has to development of a common language that can be
used by each member to communicate with higher ease.
Considering of different cultural communication styles:
Each culture has to be created in a way of its communication style such as speaking
patterns. Non verbal communication, non verbal communication consist of speaking beyond
words, facial expressions, body language and gestures. It is necessary to focus on diverse
communication styles that is part of low context countries. In TESCO this strategy is used for
making the overall workforce understand that communication is a combination of both verbal
and non verbal conflicts and cues that have to be resolved with a unique understand of non
verbal communication.
Planning of projects across different time zones:
This strategy is applied when TESCO is willing to enter in some countries that are
complete new as compared to existing locations. Here there are special project teams that are
formed who have a sole motive of focussing on just one aspects on the present situation. In these

teams there is application of principles to form teams across different time zones that can benefit
the organisation for long run effectiveness.

CONCLUSION
It can be summarized from the above made discussions that it is very crucial to develop
cross cultural understand among employees and executives in organisations by use of proper
training and learning. There are many different theories that assist organisations to apply
practically so that they are able to deal with the challenges arsing out of cross cultural
differences. Such as there is Geert Hofstede's cultural dimensions that assist in understand of the
market nuances according to six power aspects. Further there are strategies that can be used for
dealing with differences such as cultural nuances, the way cultures affecting the key areas of
business that is communication, leadership, decision making, trust, disagreement amongst the
organizations and individuals.

REFERENCE
Books & Journal
Cagliero, D., 2020. Ethical Implications of Cultural Barriers to the Depression Diagnosis:
Conversations with Primary Care Physicians. Journal of Cross-Cultural Psychology,
p.0022022120946842.
Higueras-Castillo, E., Munoz-Leiva, F. and Liébana-Cabanillas, F.J., 2019. An examination of
attributes and barriers to adopt biomass and solar technology. A cross-cultural
approach. Journal of environmental management, 236, pp.639-648.
Walsh, J. and Winsor, B., 2019. Socio-cultural barriers to developing a regional entrepreneurial
ecosystem. Journal of Enterprising Communities: People and Places in the Global
Economy.
De Piano, F., 2020. Cross-cultural counseling: the Arab-Palestinian case. Routledge.
Jin, T. and Chen, M., 2019. Cultural barriers to intellectual property ethics: A theoretical
model. Proceedings of the Association for Information Science and Technology, 56(1),
pp.491-494.
Gray, C., 2017. Crossing cultural barriers: children’s views on the recuperative holiday
experience. European Early Childhood Education Research Journal, 25(2), pp.321-339.
Gupta, S. and Bhaskar, A.U., 2016. Doing business in India: cross-cultural issues in managing
human resources. Cross Cultural & Strategic Management.
Ukpong, D.E., 2017. Social and Cultural Barriers in Translation. Human and Social
Studies, 6(1), pp.77-87.
Online
Hofstede’s Cultural Dimensions, 2017 [online] Available through<https://www.business-to-
you.com/hofstedes-cultural-dimensions/>
SIX BARRIERS TO CROSS-CULTURAL COMMUNICATIONS, 2016 [online] Available
through<https://declicinternational.com/6-barriers-to-cross-cultural-communications/>