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What’s culture got to do with Tesco’s decision to withdraw from Japan?

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tug of warIn light of the recent news concerning Tesco’s withdrawal from Japan, Jeremy Comfort considers the impact of culture on business. Jeremy will be speaking more about this topic at the annual BESIG conference in Dubrovnik on 19th November 2011.

Having spent several years building their business in Japan, the UK’s biggest retailer has decided to sell up.  Investors have been disappointed with the return from this part of the business as Tesco have found it difficult to achieve the scale that make their UK tills ring constantly. There are also concerns about their much larger investment in the US where the Fresh & Easy chain is yet to make a profit.

Tesco has been successful in other markets, notably Eastern Europe and SE Asia, so what has gone wrong?

It seems that the Tesco way has worked well in emerging economies such as Thailand, Malaysia and China but run into problems in more developed markets like Japan, US and Taiwan. This is a recognisable phenomenon that I have come across with other international businesses. So called majority cultures such as the US and Japan are far more resistant to change than the developing world which is open to new ideas and eager to embrace opportunities.  In Europe multinationals often find it easier to pilot new products or systems in Hungary or Poland than France or Germany.

This analysis gives us an insight into some key factors which leaders need to consider when deciding on strategy. It also provides a bridge to a set of competencies which are needed by all Business English learners who are working internationally. Companies need to know when to push their own agenda / approach and when to adapt or pull towards the local way. Individuals need to develop “push skills”, such as focus on goals, autonomy, resilience and some approaches to influencing, but also “pull skills”, such as active listening, rapport building, openness and acceptance*.

The push and pull framework provides a very powerful way for us and our learners to think about needs and the courses we design.  The starting point is to consider results and relationships – what we want to achieve and how we are going to get our colleagues/partners to help us to get there. The results/relationships question needs to be asked at a strategic level – we want to set up a business in Japan with a certain return on our investment but how much do we need to invest in building the right relationships locally? It can also be asked on a micro level for a particular telephone conference or meeting. Should I push my colleagues hard to clarify objectives and drive towards the deadline or should I pull by listening to their concerns?

Business English teachers and trainers are already developing these skills – usually in terms of presentations, meetings, telephoning etc.  However, we need to give our work a stronger business and cultural context in which we develop these skills. It would be a mistake to just focus on the cultural and I believe some interculturalists have found themselves down this cul-de-sac.  Business people are not usually interested in culture per se. However, if you can show them how culture impacts on business at both a strategic and day-to-day operational level, then your Business English courses really start to add value.

At the same time as Tesco is pulling out of Japan, the country has elected a new prime minister: Yoshihiko Noda. He compares himself to the dojo loach – an eel-like creature which scavenges in the mud for snails and leftovers. This unlikely and very self-deprecating way of presenting himself hints at the sort of relationship he wants to build with the Japanese electorate. He and the country are facing enormous challenges but he does not want to set himself apart – on the contrary, modesty is his byword.

Wherever a company or individual is seeking to do business, they need to be very mindful of the cultural context. This does not mean they need to imitate the way locals behave but it does mean they need to observe carefully and consider the balance between the push and the pull.

Jeremy Comfort will be speaking for Oxford University Press at BESIG. OUP will be at BESIG demonstrating our range of Business and ESP titles, including Business Result.

*Developed by Worldwork for their International Profiler.

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Author: Oxford University Press ELT

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