Abstract
This research paper will discuss some of the elements that are necessary to understand before embarking on an international business expansion. In order to successfully expand a fast-food franchise internationally into London, Mexico and China, one must first consider the various cultures and values of these locations regarding food and eating, the social behaviors regarding employees and customers, work attitudes and any training required to adapt to these cultures. Within this research paper these factors as well as the ethical standards with which an organization should operate will also be discussed.
Another topic that will be covered includes both individualistic and collective attitudes and/or characteristics of the societies in the aforementioned locations. These characteristics will then be used to classify each country’s cultural habits as either individualistic, collective, or a combination of the two. In addition, the concept of cultural shock will be analyzed as well as methods that can be used to alleviate this type of condition. Finally, an organization’s use of expeditors in foreign locations will be discussed along with the ethical implications that such a practice may involve.
The first elements to be examined are the cultures and values of each location in regards to the consumption of American fast-food. According to a research paper from Duke University which investigates the cultural elements of China in regards to American fast-food, “restaurants such as McDonald’s and KFC represent the acquisition of the coveted urban Chinese life. They are locations in which small organizations started by younger college graduates hold informal office meetings, favored social spots among young adults, and quiet locations removed from the chaos of metropolitan life for the growing population of white collar workers. The well-lit, uniform, and clean restaurants symbolize the antithesis of the traditional Chinese restaurant in which franchises are scarce, hectic meal times are usually loud, and older generations of adults have a tendency to frequent. The American fast-food restaurant can be seen as a representation of the new upper middle class that is now more readily available to many younger Chinese,” (Jiang, 2006).
With respect to Mexico, there are many cultural factors that contribute to the consumption of American fast-food. Some of these factors include the average age of the Mexican population, changing trends in regards to working mothers, and an increase in overall economic earnings. According to the Market Indicator Report from the Canadian Government dated May 2011, “the average Mexican is less than thirty years old. Because of this fact, more companies are targeting this large group of younger consumers which prefers processed-food and fast-food rather than the more traditional foods. In addition, more mothers are being introduced to the work force, thus leaving them less time to prepare homemade meals. This results in a larger consumption of fast and easy to serve, processed foods by children and young adults” (Government of Canada Publications, 2011).
Finally, due to a decrease in family sizes and an increase of family income through more working mothers, a larger number of Mexican families are finding themselves with a larger amount of expendable income. This trend has led to more young consumers being granted additional money for allowance from their parents, thus giving them more spending power and financial freedom with which to make purchase decisions” (Government of Canada Publications, 2011).
Like Mexico and many other nations, the factors that contribute to the consumption of fast food in London are varied. Research in this area has pointed to various cultural and economic factors that influence fast food intake within this area as well as others. “An aging population, growing health consciousness, and increasingly busy lifestyles affect consumers’ eating and spending habits, and contribute to new market trends. These trends include an increase in premium-level product demand, increased demand for food and drink products that are healthy and natural, and demand for both fresh and processed organic products.
In addition, “consumers are eating out more and looking for more on-the-go ready-made meal options. Packaged food products, convenience food, and fast food service sectors are expanding rapidly due to these increased demands. Overall, consumers are seeking new quick, convenient, and nutritious dietary options and choices that accommodate their diverse international food preferences,” (Agriculture and Agri-Food Canada, 2006).
Social behaviors can vary greatly from one culture or nation to another. Being that there are so many different societal norms and intricacies involved in international business it is of the utmost importance to study these issues before committing to international expansion. Some of the issues involving social behavior in regards to employees and/or customers that should be considered before undertaking any international expansion project include attitudes towards women, religious influences, work ethics and attitudes, values, social etiquette and manners, and ethical standards.
Merely using one’s perceptions to analyze social behaviors can lead to misconceptions and stereotyping. Likewise, using attribution, “which is the process through which individuals associate behavior to its causes and to the intentions, proclivity and circumstances that explain why individuals conduct themselves in the manner that they do, can also prove to be problematic. This is due to the tendency of individuals to use their own experiences from their personal culture to explain deviant behaviors of those in other cultures,” (University of Notre Dame, n.d.).
In order to avoid social and cultural misconceptions there are several types of training that an organization could implement. One such type is attribution training. “Attribution training entails making individuals aware of their own cultural background and how it contrasts from the cultural background of the location to which they may journey,” (Chaney & Martin, 2011, p. 55).
Another form of training that can be useful in avoiding misconceptions and problems in regards to dealing with foreign cultures is coaching. “The primary type of coaching should be that of demonstrating a higher sensitivity to any and all customs or practices and even styles of language or expression that may be used in another country or location. Another type of coaching should be to supply specific examples to the employee of what one should expect to encounter in regards to customs, practices and beliefs,” (CTU Online, 2011).
Another important area to be discussed with employees who will be traveling and working in another country is the ethical standards of the organization. Actions and behaviors that are deemed ethical in some cultures are not considered to be ethical in the United States. An example of these types of issues is the use of bribery and “backdoor connections”. This method of conducting business is commonplace in many nations including China and Mexico. In contrast, London is well known for its high standard of ethics and values in business relations. “In 1986, the Institute of Business Ethics was formed in order to further enhance the high standards of business behavior throughout the UK,” (Institute of Business Ethics, 2011).
Cultures can be classified as having an individualistic or collective attitude, or a combination of the two. “Individualistic societies value the individual and believe in having responsibility for one’s own destinies and actions. Collective societies value common interests, compliance to the group, collaboration, and cooperation,” (Chaney & Martin, 2011, p. 63). Both England and Mexico are considered to be individualistic, whereas China is more traditional and collective.
“Culture shock is the phenomenon one experiences when moving into a culture different from one’s own,” (Chaney & Martin, 2011, p. 72). When moving into the Chinese culture, one could expect a culture shock in regards to language, currency, food, time scheduling, overcrowding, working attitudes, and business practices. Likewise in Mexico, the culture is very different from that of the United States. Culture shocks in this country can also be related to language, food, lack of technology, work attitudes, currency, and what may be considered unethical business practices. Of the three locations discussed, London may be the least foreign as far as cultural differences are concerned. The language is a bit different as are the driving laws. As far as business practices in London are concerned, work attitudes and ethical values are somewhat more stringent than here in the United States.
Whether or not to use the services of an expeditor when working in another country should be discussed and decided before expansion efforts begin. Although this practice is common place in many countries, this type of practice is deemed illegal and generally looked down upon in the United States. It is recommended that a strict code of ethics or conduct be adopted and administered throughout the organization in regards to avoiding this type of behavior. Participation in any unethical or illegal acts only invites opportunities for more of this behavior and can lead to organizational instability as well as legal consequences.
Some of the ethical issues that may be involved in the use of expeditors are bribery, illegal or unethical accounting practices, extortion, internal auditing, falsification of documents, whistle-blowing, fraud, shareholder protection, specific areas of labor laws and regulations, corporate compliance regulations as well as many others. Overall, each organization needs to decide for itself what it views as being ethically responsible and instill those beliefs throughout the organization.
References
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Chaney, L. & Martin, J. (2011). Intercultural Business Communication: Fifth Edition. Upper
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Colorado Technical University Online. (2011). MGM316 Phase 1 Individual Project: Cultural
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Government of Canada. (2011, May). Market Indicator Report: May, 2011. Demographic
Consumer Trends: The Eating Habits of Young Consumers in Mexico. Retrieved from publications.gc.ca/collections/collection_2011/agr/A74-1-7-2011-eng.pdf
Institute of Business Ethics. (2011). Retrieved from http://www.ibe.org.uk/
Jiang, E. (2006, September 6). American Fast Food in Chinese Food Culture. Retrieved from
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University of Notre Dame. (n.d.) Lecture 04 – Social Psych: Social Perception/Attribution.
Retrieved from http://www.nd.edu/~rwilliam/xsoc530/attribution.html