Globalisation in food retailing industry tesco
Introduction Globalisation in food retailing industry Threat of new entrants and substitutes Bargaining power of…
Table of Contents
Executive summary. 3
Terms of reference. 4
Overview of the situation. 4
Analysis of the situation. 5
Difference in power distance. 7
Differences in individualism.. 7
Differences in Long term dimension. 8
SWOT analysis. 9
Strengths of ABC company. 9
Weaknesses of ABC company. 9
Opportunities of ABC company. 9
Threats to ABC company. 9
Solutions and recommendations. 10
Forecast and outcomes. 10
Bibliography and references. 11
The report has been generated after the consultation from the managers of ABC Company who is the franchisees of McDonald’s in London. The ABC Company employs a large number of ground level staff from the immigrant community mainly from the Asian and African countries. But most of the supervisors and higher-level managers of the McDonald’s franchisee are from the United Kingdom and there have been difficulties in managing, motivating and developing the employee satisfaction at their stores. The analysis is conducted based on the cultural differences between the individuals of the United Kingdom and the individuals from the Asian and African countries (taking India as a reference). It has been analysed that due to the differences in the cultural dimensions developed by Hofstede such as the power distance index, individualism and long-term orientation between the supervisors and the employees (who are from the United Kingdom and Asian and African countries respectively) contribute to the difficulties in the management. The solution to the problem is an increased awareness about the expectations and the perceptions of the two groups of employees. The recommendation is that cross-cultural training be provided initially to the supervisors in a broad-based manner so that they are able to manage their employees from the different social and cultural backgrounds. Further training can be provided to the employees from the Asian and African cultures so that they are aware of the expectations from the supervisors and management. This can contribute to better service quality at the stores and increased customer satisfaction.
The report is developed by self, R Bhatra, (hereinafter referred to as author) management consultant focusing on the development of management strategies and providing training to employees at various levels in organisations in the United Kingdom.
The client for whom the present report is prepared is ABC Company having 4 franchisees of McDonald’s fast food restaurant located in the London area. ABC Company has taken the franchising of McDonalds and is engaged in the operations of the four outlets by employing their staff directly.
The general manager of ABC Company has approached the author with the problem of management of the ground level staff of the McDonald’s fast food restaurant the company is managing. Due to the high levels of immigration from Asian and African countries, the franchisees are now able to recruit from this immigrant population who are mainly students in any easier manner. But after the recruitment, the supervision, training and development and managing this employees has created certain problems which the company needs to analyse as it feels that these issues are related to social and cultural differences of the supervisors who are the United Kingdom citizens and the staff recruited from the immigrant community who have just or recently entered the United Kingdom.
The company would like to know how the differences in social and cultural attributes are contributing to the difficulties in their management of these employees and what the possible solutions to the issue are.
McDonald’s fast food restaurant is a chain operating with a franchising model as well as operating some of the direct outlets in key areas. Several restaurants in London are franchised to organisations who are managing these operations and McDonald’s is engaged in providing the supplies, training and development of the supervisors and managers and the general operational management. The franchisees are engaged in the day-to-day operations of the outlets, recruiting and training the ground level staff.
In in the last decade, there has been a huge explosion in the immigration from Asian and African countries mainly the student population who have come for short-term studies. These students work on a part-time basis and their main sources of jobs are the ground level staffing opportunities in fast food restaurants such as McDonald’s, Kentucky fried chicken etc. Due to the availability of these employees and the ease in recruitment, many fast food restaurants in London area are now populated with employees from the immigrant community. But almost all the supervisors and higher-level managers of these organisations are born and brought up in the United Kingdom with their own cultural and social preferences. The students and those individuals who have come from Asian and African countries have different social and cultural characteristics, which make it difficult to manage and to satisfy them.
The present report is evaluating the differences in the social and cultural attributes mainly from the point of view of management, supervision, training and development, motivation, retention and developing employee satisfaction.
The situation in the present context is the difficulties encountered by the higher-level management and the supervisors in managing, communicating, supervising, training and developing and creating satisfaction in the job for the candidates recruited from the Asian and African cultures. Several researchers have analysed the differences in the cultural and social aspects of individuals and groups based on their background, country etc. One of the prominent researchers is Hofstede who have analysed the characteristics of cross-cultural groups and organisations. He has played a major role in developing a systematic framework for assessing national cultures and organisational culture and developing the cultural dimensions theory Hofstede, 1982). The main concept developed by Hofstede is that “there are national and regional cultural groups that influence the behaviour of societies and organisations” (Hofstede, 1982, 1984). Hofstede (2005) also developed different dimensions in order to group individuals into different classes. Although these cultural dimensions have been utilised by several researchers (LaVan and Murphy, (2007), there are criticisms against this type of stereotyping. According to Mead, (2005), stereotyping based on the parameters defined by Hofstede creates inherent assessments in the minds of people which may be completely untrue because of the way in which the individual has been brought up even though belonging to a particular social and cultural background. There are criticisms about the methodology adopted for the research and the classification of countries and the comparisons (Herbig, 1998). But the main concept based on which Hofstede have developed the cultural dimensions are still relevant (LaVan and Murphy, 2007) although certain other types of cultural dimensions have also been realised and used by other researchers.
The main cultural dimensions that developed by Hofstede are the “power distance index which expresses the degree to which the less powerful members of a society accepts and expect that power is distributed unequally” (Hofstede, 2005, page 65). The next dimension is with regards to the individualism defined as “the preference for a loosely knit social framework in which individuals are expected to take care of themselves and their immediate families only”, (Hofstede, 2005, page 67). “Masculinity refers to the dimensions of reference in society for achievement, assertiveness and material wants”, (Hofstede, 2005, page 67). The uncertainty avoidance index refers to “the degree to which the individuals become uncomfortable with uncertainty and ambiguity”, (Hofstede, 2005, page 68). The next dimension is with regards to the “orientation in terms of either shorter or longer and dealing with the society’s search for virtue” (Hofstede, 2005, page 67).
Based on the above cultural dimensions of Hofstede, (2005) have developed a comparison chart whereby two countries can be assessed and evaluated based on the differences in the dimensions.
Figure 1 – Comparison of cultural dimensions of united kingdom and India
(Source – Hofstede, 2012, accessed from http://geert-hofstede.com/united-kingdom.html)
In order to analyse the first aspect of the consultation process which is with regards to the differences in the social and cultural attributes, contributing to the difficulties in management, supervision, training and development, retention, motivation and employee satisfaction, Hofstede, (2005) framework has been utilised where a comparison of the social and cultural parameters or the dimensions are analysed.
From the above figure a comparison of the cultural dimensions of United Kingdom with that of India (which is taken as a reference for analysing the general social and cultural dimension of individuals from Asian countries) and analysing the differences in the cultural stereotypes, it can be seen that there is a huge difference with regards to the dimensions of power distance index, individualism and the long-term orientation of individuals from the United Kingdom and India.
Power distance index is the concepts adopted by the society about the unequal characteristics whether it is in community, society and organisations (Hofstede, 1982). According to LaVan and Murphy, (2007) the larger power distance index country, individuals will succumb to authority and the formal procedures and methods followed in organisations, generally have tall organisational structures and ultimately the authority is respected and valued. In such countries, the employees consider their supervisors as having better knowledge and the ability to lead the subordinates (Hofstede, 2004). But in countries with low power distance index, such as that of United Kingdom, a flat organisation structure is followed where there is some level of equality between the subordinate and the immediate supervisor, whereas teamwork is an important consideration and the roles and responsibilities are almost equally distributed (Minkov and Hofstede, 2011).
The main consideration when analysing the difficulties in supervising the employees in McDonald’s will be with respect to the employee’s expectation of increased level of supervision or directions from the supervisors to act in a certain manner. But the supervisors who are having the cultural patterns of United Kingdom would expect their store staff to take initiatives and act according to the situation and would consider them on a level of equality. Hence there is a level of disconnect between the expectation of the employees from the Asian countries such as India who expects authority from the supervisors and in turn the supervisors from the United Kingdom expects some form of engagement and initiatives from the employees.
The next significant difference in the cultural dimensions is with regards to individualism. The individualism is the degree of interdependence a society maintains among its members (Minkov and Hofstede, 2011). The British are highly individualistic and private people whereas the individuals from India are more of a collectivist nature (Hofstede, 2004). When analysing the working situation, the supervisors do not expect their employees to engage them with their personal problems, difficulties in family or other attributes whereas the employees from India might feel that the collectivists character because they are working in close cooperation and coordination between other employees and supervisors. The organisational culture in India is that paternalistic and the supervisors and other employees are either closely connected and are aware of the difficulties and problems the employee faces outside the working condition. The collectivist’s culture also promotes certain level of teamwork and reduces the competition between individuals. The individualism increases the competition and from this perspective, the supervisors would expect the employees to work in a competitive manner rather than in a collectivist’s manner. To put it simply, the supervisors will expect a competitive behaviour from the employees whereas the employees would want to work in teams of their own without significantly differentiating between the work efficiencies of their own and that of their colleagues.
The next aspect which shows considerable difference with respect to the dimensions is the long-term or short-term orientation where the individuals from India are seen to have a long-term orientation and the individuals from the United Kingdom has a short-term orientation. The short-term oriented culture drives a great respect for history and tradition as well as focus on quick results in the future (Vos 2004). The supervisors expect their employees to work in an efficient manner so that results are achieved in a quick timeframe. Specifically taking an area of training and development, the supervisors will expect the subordinates to learn the various aspects of working at the fast food restaurant on their own because of the individualism. Hence the supervisors expect not only initiative but also quick results from the employees whereas the employees who are from India or other Asian countries would like to take their own time, learn the several aspects of the job considering that they are going to work for the organisation for a long period of time. The short-term mentality of the supervisors also contribute to the hiring and firing culture in the United Kingdom which is not the organisational cultures in the Asian countries.
The above analysis indicates that there are differences with related to several areas and the conflicts or the problems in management arises because of the expectations or the gaps in the performances expected from employees and the supervisors. The employees expect a certain performance from the supervisor and in turn the supervisors expect certain performance from the employees and their perceptions may not match the expectations. This may contribute to certain level of conflict and management difficulties.
From the above analysis it is clear that there are certain problems and a swot analysis is conducted in order to analyse the different aspects relating to the situation and how the management of the franchising company can develop a strategy for managing the employees.
The ABC company is having four franchisees of McDonald’s restaurant in the London area and are finding it easier to recruit from the Asian and immigrant population. The retention levels of these individuals are high because of the long-term orientation. McDonald’s is providing cross-cultural training and awareness programs specifically based on the fact that most of the ground level staff are from the immigrant countries.
The weakness of the company is because of the differences in the cultural background of the supervisors and the employees. The lack of awareness is contributing to the difficulties in management.
Due to the long-term orientation and collectivist nature of the ground level staff working for the franchisees of McDonald’s, the ABC company has an opportunity to improve the motivation and thus employees’ satisfaction by managing them effectively. The long-term orientation and collectivist nature contributes to increased levels of retention of the employees thereby reducing the cost of recruitment and training and the facilitation of teamwork at the ground level. Improved teamwork and retention are some of the aspects required for the franchisees because of the necessity for reducing the employee costs arising from recruitment and training and development and also with regards to the benefits to be accrued from team working between the employees.
The lack of awareness between the supervisors and managed and employees are contributing to difficulties in managing the franchisees which may create conflict and lower motivation and satisfaction levels of both the supervisors and the ground level staff. The increased motivation and satisfaction level can contribute to the reduction in the quality of service provided by the employees to the customers.
One of the prime solutions for the problems relating to the lack of awareness between the employees working for the franchisees are to provide them with cross-cultural training and creating an awareness among them with regards to the differences in the cultural and social differences. Cross-cultural training has become a norm in any organisation in the United Kingdom because of the high level of diversity in the organisations. Cross-cultural training promotes awareness among the employees working in the same organisation about the social and cultural behaviours and actions of other employees and motivates them to understand each other. McDonald’s and several other organisations have employed cross-cultural training in order to facilitate improved working conditions, increased motivation and employee satisfaction. Cross-cultural awareness training deals with the manifestations of culture in the workplace and it is conducted in order to constructively tackle the difficulties and challenges and cross-cultural differences in organisations. These training methods efficiently delivered can provide the managers and the employees with the knowledge and skills to effectively manage the multicultural staff. It is recommended that ABC company provide some form of cross-cultural training mainly to the supervisors since they have today some form of initiative in understanding the expectations of the employees. McDonald’s is providing such kind of training and the supervisors can be given the initial training after which the ground level staff can be provided the training.
Increased and better awareness about the differences and the expectations and perceptions of each other can contribute to the reduction in conflict, increased levels of communication and better working conditions. If the employees from the Asian cultures and supervisors from the United Kingdom culture are aware of the differences in expectations and perceptions, and can contribute to better working conditions, increased levels of motivation and employee satisfaction across the board. This can further contribute to better quality of service to the customers of the company.