In 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*.