An Analysis of Intercultural Business Competencies at Tesco

This report provides an executive summary of Tesco's intercultural business competencies. It begins by defining intercultural competency and its importance in a globalized business environment. The report then delves into the specific intercultural issues Tesco faces, including language barriers, traditional communication methods, cultural differences, and global competition. The main body analyzes the impact of these issues on Tesco's performance, examining how factors such as language problems, cultural differences, and global competition have affected its operations and market share in various regions, including China and France. The report highlights the strategies Tesco has employed to address these challenges, such as adapting its communication methods and globalization strategies. The report also discusses the importance of understanding local markets and adapting to cultural nuances. The conclusion summarizes the key findings and offers recommendations for Tesco to improve its intercultural competency and enhance its global performance.

Intercultural Business
Competencies

Executive Summary
Intercultural competency refers an ability to function in an effective manner across cultures
and acting accordingly. It makes multinational companies able to take competitive advantages
and becoming successful in expanding business. Globalization affects company’s performance to
the great extent as it creates several problems like cultural problems, languages problems and
others. Competition also affects companies as it puts pressure on companies foe investing in
advanced technologies, resources and others for successful expansion. Globalisation strategies
also play an important role as it helps companies in becoming intercultural competent and
solving all problems.

Table of Contents
INTRODUCTION...........................................................................................................................2
MAIN BODY...................................................................................................................................2
Intercultural issues which Tesco is facing..............................................................................2
Intercultural impact on the performance of Tesco.................................................................5
Summary of main points..................................................................................................................8
Conclusion.......................................................................................................................................9
RECOMMENDATION...................................................................................................................9
REFERENCES..............................................................................................................................12
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INTRODUCTION
Intercultural competency refers some skills which makes companies able to take advantages
of global competition and operating globally in an effective manner (Arasaratnam-Smith, 2017).
This present study is based on Tesco, which is British multinational retailer. It was founded in
the year of 1919 by Jack Cohen. This retailer faced several problems while expanding business
in other countries due to different cultures and communication problems. This present study is
going to show intercultural issues which Tesco faced. It also shows effective ways which Tesco
used for dealing with all issues like cultural differences, languages problems and global
competition. Further, it discusses some impacts of all these issues on its performance, its image
and its productivity. lastly, it gives suggestions for better improvement and making developing
strategies for taking advantages of competition.
MAIN BODY
Intercultural issues which Tesco is facing
Tesco is a British multinational retailer and well known for its qualitative products and services
to customers. It has around 450,000 employees that helps it out in accomplishing its goals.
Rather than skilled employees there are several other reasons for which it becomes successful till
nw. Some effectiveness of this retailer is it focuses on sustainability, motivation to employees
and others. But on the other hand, it is found that it is facing some intercultural problems and
other communicational problems due to dealing in several countries. All issues related to
intercultural and communications are having impacts on its overall performance. Some main
issues which it is facing include:
Language problems: It is found that due to operating in different countries it faces languages
problems. It is also found that this company employs diverse workforce or workforce from
different countries in order to promote equality and diversity. Diversity and equality has several
positive impacts as it makes it able to bring innovation within organization. Different cultures of
employees use different ways of performing functions and provide better suggestions in taking
decisions. But on the other hand, diversity or employing different cultures of employees as well
as operating in different countries are having some negative impacts on its performance. Local
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employees resist employing different cultures of employees due to fear of lack of promotional
opportunities. Other main reason is employees’ face problems in communicating with each
other’s due to different language. It creates miscommunication that leads to conflict among them
(Cultural Pressure at Tesco to Over reach Caused Crisis, 2020).
It is also found that due to operating in different countries like China, France, Japan and
others, it finds some problems in attracting customers due to languages changes and cultural
changes. It may affect its sales and promotional functions. But it is found that company is
dealing with this problem as it is making changes in its organizational culture and
communication. It helps employees in communicating in an effective manner (Smolyaninova,
and Popova, 2019). According to new culture of Tesco, employees have to follow specific flow
of information system which reduces miscommunication problem. It also focuses on team
working which also improve relation of employees and make them able to understand them
about different cultures and languages.
Traditional ways of communication: It is found that Tesco still follows and mainly focuses on
traditional ways of communication like face to face. It is quite good as it reduces
miscommunication within an organization but on the other hand, it is time consuming,
Competition is increasing in retail sector and for expanding business and attracting global
customers, this traditional way of communication can create several problems. For attracting
global customers and making them aware about effectiveness of its products range and services it
is not possible to make use of traditional ways. It is complex, time consuming and cost
ineffective process. So it is other main issue which it is facing. Due to this and lack of global
customers, it is lacking behind and there are several other retailers who are taking advantages of
competition. So, overall it can be said that due to traditional ways of communication in snatching
competition another external opportunities from it. It may also create barriers in becoming the
market leader. It is found that Tesco is trying to solve this problem and dealing in an effective
manner. It is found that it is now focusing on modern ways of communication like interacting
with global customers via social media platforms (Evans and Mason, 2018). It also takes
feedbacks from customers on its official websites and asks for improvement. It takes all
feedbacks into consideration and accordingly makes changes which make its customers feel
values. It also helps it out to retain its customers with the brand for the long run. But still there
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are some problems which it is facing due to communicational modes which it needs to focus the
most.
Cultural differences: Tesco is multinational retailer and operates in several countries. In some
countries it became successful but in some countries it became fail. It is stated that Tesco became
fail in China only because of cultural differences. It is found that Tesco faced problems in
understanding Chinese customers’ due to cultural differences. Different cultures of people have
different tastes in food and other products range. The main reason was value of its club card and
its other loyalty programme. Tesco was compared with other retailers Walmart and it is found
that Tesco became fail in understanding culture of China (Tesco Failed to Understand the
Chinese consumer, 2013). It tried to satisfy needs of Chinese but it is stated that Chinese tried to
take advantages and control on its loyalty programmes. Tesco tried to deal with this problem and
re invests in several other awareness program and tried to promote its products in China market
but due to lack of strategic planning it became fail. So, it can be said that this intercultural
problem affected it to the great extent. This problem reduces its profit margin and sales as well.
It also had to bear loss due to ending up stores in china. It is now focusing on adapting different
strategies for understanding needs of Chinese and regaining trust of Chinese. Because regaining
trust of customers is important for having positive impacts on image of the company and also
taking advantages of competition.
Global competition: Global competition is one of the main issue which Tesco and other retailers
are facing. It operates in many countries and increasing competition among retailers and well
known retailers in the market like Walmart, Sainsbury and others are putting pressure on this
retailer to adapt changes. Increasing competition is putting pressure on it to invest in
technologies, expansion of business, ringing innovation in the market and developing new
products. All these can increase cost of this company and for making an effective position in this
global competition market it will require reducing profit margin. It is also stated that due to
global competition it became fail in France. It wanted to expand its business for increasing sales
and attracting global customers and that is why it entered in France but it failed to sustain itself
because of competition from France retailers like care four and promodes. It can be said that
there is huge competition in this sector and all retailers are striving hard for making an effective
and string position in the market (Rosnizam and et.al., 2020). It is found that Customers were
rejecting British’s products as they were not aware about effectiveness of products of Tesco
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retailers. So, it can be said that Tesco were lacking in promotional and globalization strategy. At
that time, Tesco identifies main reason and noted features of US and European countries. On the
basis of detailed analysis it tried to make changes in its own products and its features. It learned
several things from failure and took risks of expanding business in other countries. So, it can also
be said that risk taking skills and ability to learn something from failure plays an important role
and key of success of business.
But it is found that after becoming fail in France only because of competition, Tesco tried
to develop its globalization strategies because it knew that competition will increase but for
becoming the market leader and giving a tough fight it will require an effective strategy. These
globalization strategies made it able to expand business in other countries and it was the reason
which made it successful in South Korea. It learned several new things from globalization. It is
also stated that other retailers like Marks and Spencer also helped it out in expanding business as
effectiveness of their products motivated it to develop its own products in an effective manner
(Tesco’ Global Operation, 2017). It also realized that its strategies that were successful in the
UK market would work better in other market if they were given a local flavour. So, overall it
can be said that cultural differences affect performance of the company to the great extent and
for becoming successful it is important of having flexibility skill. It understood that tastes varies
cultures to cultures and this understanding helped it out in successful expansion in other
countries.
Intercultural impact on the performance of Tesco
Tesco’s admission of an overstatement of profit by at least 260 m plunged Britain’s
biggest retailer into the most serious crisis over 100 year’s history. Main reason behind its inter-
cultural issues such as language problem, traditional way of communication, lack of
coordination, cultural differences and global competition. these are considered the most common
issues or threat that directly affecting on the overall performance of Tesco (Sardi, Garengo and
Bititci, 2019). In this way, it is important for Tesco to change its culture and reinvent is brand.
Company has told their employee after increasing its supermarket chain. Turning business
around that will require change in culture and business processes. It help for improving the
performance of Tesco in global marketplace.
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Intercultural is affecting the different pattern of Tesco in context of functions within and
outside of company. Cultural factor is consider as important aspects which is always supports for
creating an effective environment (Sardi, Garengo and Bititci, 2019). If workers get positive
environment in workplace and generate profitability. For Example- Tesco has been expanding
their business in china market but it may suffer due to cultural difference issues. Citizen of
Chinese people have a lack of coordination or communication with company’s staff members
(Kartika and Kappel, 2019). The employees of Tesco have not so much efficient to deal with
culture differences. In this way, it may have faced a lot of challenges because Tesco has already
invested a lot money on business. Due to failure, it is not earning money and its revenue become
as lower.
In context global competition issue, Tesco faces strong and increasing competition in UK
marketplace from its heavyweight rivals such as Morrison, Sainsbury’s. Each of these
organizations are trying to attract its market share through different customer focused strategy.
Whilst Tesco continue to deal with these situation in marketplace and remain under competitive
pressure. Sometimes, it has been increased the market error that could have represented adverse
result or outcome (Bilicka, Paszkowska-Rogacz and Stawiany-Marchwicka, 2019). Usually,
economic environment or culture in UK is possibly going through worst situation which directly
affecting on the performance of Tesco (Sardi, Garengo and Bititci, 2019). In this way, Tesco
have faced the issue or problem regarding slow economic condition, which have completely
dampened the enthusiasm of supermarket. In order to create difficult market condition for Tesco.
Sometimes, it will be increasing the elimination of thousand of job where affecting performance
of Tesco in term of growth and development.
Whilst Tesco is steadily increasing the global foot print but UK continues to be its
overwhelmingly large market (Sardi, Garengo and Bititci, 2019). It has been decreased the total
sales and production. High competitive pressure will increase more challenges for Tesco to lower
its global presence as compare with other competitors.
In context of language problem, it is considered the most common cultural issue where
each and every stakeholder have established direction relation with Tesco. In this way, it can
affect easily Tesco in term of performance, but at same time it also decreasing the current speed
of enterprise (Bilicka, Paszkowska-Rogacz and Stawiany-Marchwicka, 2019). The primary
reason is that when multiple stakeholder involves and belong to their different communities. In
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this way, it will be representing as cultural difference and increasing language issues among
stakeholder. Tesco have not established a strong relationship with different stakeholder and
performed limited communication from both side.
Cultural variations across ethnic groups and international countries that can result in
difference in how existing consumer make purchase. For Example- In case of Tesco, it had
pulled out its enterprise from japan after 9 years of performing different operations. This type of
situation has been occurred due to Japan’s culture, there are various family owned and long
established grocery stores, which form a hub of community. It may offer the various product as
well as services (Bilicka, Paszkowska-Rogacz and Stawiany-Marchwicka, 2019). At that time, it
has been increased the cultural differences issues which directly impacts on the overall business
performance. in most of situation, Japanese client may prefer to choose high quality of product
and services. Afterwards, Tesco have focused on the planning of research and development
strategies. It may support for treated as separate target market. Tesco has not tried to ignore
cultural difference and assuming that they are not important but it may failure the business
process (Sardi, Garengo and Bititci, 2019). In this case, Tesco had mistakenly established a
healthy image in particular country where population like to purchase other countries item.
Impact of Intercultural communication on competencies can be categorized into different
level of analysis. The effect of inter-cultural communication on cultural values, which caused by
globalization. It have made an impact on the communication among different group of people
within Tesco. Lack of communication or coordination will increase difference between employee
and management (Bilicka, Paszkowska-Rogacz and Stawiany-Marchwicka, 2019). it may
develop or create conflicts among staff members regarding particular discussion on subject or
topic. Sometimes, this type of issue will expand to impact on the current performance of Tesco.
Each and every staff members are not concerned about its business execution tasks (Sardi,
Garengo and Bititci, 2019). In this way, it is very difficult for Tesco to manage and control the
business operations in order to reduce revenue generation effectively. In this way, it is
considered as essential part of business growth and development.
A positive cultural environment that influence more and more potential customers
towards its organizational goals. It help for increasing the overall business profitability as
productivity in global marketplace (Sardi, Garengo and Bititci, 2019). As per case Tesco
scenario, performance and efficiency of Tesco may be depending on the intercultural
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communication competencies. This is reason why Tesco can improve their current performance
while implementing new effective strategies or approaches. In additional, Intercultural will
eliminate through effective communication or coordination because it help for inspiring or
motivating other staff members towards growth and development.
As per discussion, it has summarized about the impacts of Intercultural issues on the
performance of Tesco, identifying the different cultural issues which applicable in global
business expansion and develop as threat for Tesco.
Summary of main points
This report discussed about intercultural issues being faced by Tesco. Intercultural issues
affecting and influencing Tesco discussed in this report are Language problem this is one of the
most important issue and problems that is caused due to cultural difference. Every culture has its
own language and this is why language of employees in intercultural organization. It has impact
on communication effectiveness and efficiency within Tesco. This means that it create difficulty
in communicating with employees from different cultures. Another issue is also related to
communication, this involve that Tesco is using traditional ways of communication and this
communication is not suitable in intercultural organization because written and communication
through email help and contribute in understanding effectively what other person is trying to say.
This also create evidence what has been said in case individuals from different culture has
communicated and not able to understand. Another issue being experienced at cultural
differences, cultural difference has significant impact on Tesco because cultural difference
involves several elements that are difference in people from different cultures. For Tesco cultural
difference involve changes and difference in buying preference and purchasing habits. This also
involves changes and differences in taste and priority regarding certain elements of goods and
services. This means that in certain cultures people prefer in-store purchasing whereas in certain
cultures customers prefer online shopping. Global competition is also an issue that Tesco is
experiencing. This means that Tesco is operating in a highly competitive environment and retail
industry and this gets added and increased by level of competition at global level. Every
organization is trying to outperform their competitors and in such an environment it is highly
difficult for an organization to succeed. Report later also discussed about impact of these
changes on Tesco and success of its operations.
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Conclusion
From the above study it has been concluded that intercultural organisations those
operating in several types of culture it has become very difficult to be successful. Case discussed
in this study was Tesco, and this organisation is operating in several cultures. It is a British
organisation and has extended its operations to several countries. Tesco along with European
countries also operate in Asian countries like India and South Korea and in this situation
difference in European and Asian culture gets higher and become more difficult to deal with by
intercultural organisations. This report discussed about several issues that are being experienced
by Tesco as being an intercultural organisation. This involve issues from communication to
understanding cultural difference and more importantly understanding culture in order to survive
and become successful. Report discussed about issues that an intercultural organisation face and
further discussed about impact of these issues on Tesco. Overall it can be concluded that with
adopting right measures and effective strategies Tesco can deal with issues being faced as
intercultural organisation. Identification and understanding of issues by intercultural organisation
facilitated suggestion of suitable recommendation that can be applied by Tesco in order to reduce
negative impact of issues on organisation and its practice and increase positive impact in
intercultural scenario.
RECOMMENDATION
On the basis of issues identified that are being experienced by Tesco as an intercultural
organisations certain recommendations to improve practices and situations of Tesco as an
intercultural organisation.
One of the issues being faced by Tesco is language problem. This is a major problem and in
order to deal with this problem and identify solution for this problem it is suggested that
language training should be essential in training that is given to employees (Michalski and et.al.,
2017). Employees in Tesco should be trained about language specifically language of customers
and potential customers along with language that is spoken by most of the employees in Tesco.
This training will enable employees to effectively communicate with customers as well as fellow
employees in Tesco.
Another problem being faced at Tesco is utilisation of traditional ways of communication.
Concerned with this problem, it has its own solution. This means that instead of working on
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traditional ways of communication Tesco should employ modern ways and techniques for
communication (Rita, 2020). This means that utilisation of technology for communicating and
using emails for communication because written communication facilitates understanding of
what is being said better than oral and face to face communication in context of intercultural
organisation. Other than this, Tesco can also employ and utilize social media platforms for
communicating not just for outside organisational communication but for internal
communication as well. Social media enhances engagement of employees and also enable
effective understanding.
Cultural difference is another important issue being experienced by Tesco. This issue involve
both employees of Tesco as well as customers of Tesco. This means that Tesco operates in
several kinds of culture and this create difference in their home country culture and culture of
country it is operating in. In order to solve this problem it is suggested that Tesco should give
training to all its employees regarding local culture where employees are working. This will
resolve problem concerned with cultural difference in relation with customers (Holmes-Eber,
2016). Another element in this is that Tesco should create an effective balance and
diversification of local employees. Local employees will be able to encourage and facilitate
understanding of local culture where employees are working. Creating effective and engaged
workforce of local employees and employees from different culture will provide benefit of
diversified workforce and will also reduce negative impact because of diversified workforce.
Concerned with global competition, this is a significant problem that Tesco experiences. This
means that even though Tesco is a successful and big organisation, competition that is faces is
very high at global level. In order to deal with competitors and maintain competitive position
Tesco needs to ensure it develop and implement right strategies because without having adequate
strategies Tesco cannot compete on global level. Another suggestion is that Tesco should ensure
that stores and services of Tesco are well versed and are according to local culture (Tallman, Luo
and Buckley, 2018). Employees with adequate and effective knowledge of local culture also
contribute in success of Tesco in intercultural scenario. This means that in such situation Tesco
will enable customers to accept Tesco and become loyal customers of Tesco.
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REFERENCES
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in Peace Operations (pp. 191-204). Springer, Cham.
Kartika, G. and Kappel, S., 2019. National Culture and Gender: Effects on Compensation Gap
and Company Performance.
Michalski, K and et.al., 2017. Dealing with foreign cultural paradigms: A systematic review on
intercultural challenges of international medical graduates. PloS one. 12(7).
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Rosnizam, M.R.A.B. and et.al., 2020. Market Opportunities and Challenges: A Case Study of
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Online
Cultural Pressure at Tesco to Over reach Caused Crisis. 2020. Online Available through: <
https://www.ft.com/content/75bd6bf2-781e-11e5-a95a-27d368e1ddf7>
Tesco Failed to Understand the Chinese consumer. 2013. Online Available through: < h
https://www.foodnavigator-asia.com/Article/2013/09/06/Tesco-failed-in-China-because-of-
cultural-differences >
Tesco’s Global Operation. 2017. Online Available through: <
https://www.icmrindia.org/casestudies/catalogue/business%20strategy/Tesco
%20Globalization%20Strategies-Business%20Strategy%20Case%20Studies.htm >
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