Mgmt 5602 - Levendary Café

...

Moreover, if employees fully adapt to corporate core culture, it may be difficult for them to deal with domestic suppliers and partners. In Levendary café’s case, Levendary café US is very proud of its tasty and high-quality foods as well as its restaurant designs. However, it is challenging for Levendary café’ to accepted by Chinese customers due to culture and wage levels difference. If Chinese branch VP Chen maintains all of foods and design from Levendary in the USA, he may fail in China because Chinese customers have different tastes and consumer views from Americans. Therefore, MNEs should focus on adapting their corporate cultures to domestic cultures carefully when they are entering new markets.

Cultural variables affect the Cross-Communication process and Decision making the process by influencing a person’s perception or attitude, organizations, and their past versus future orientation. Therefore, understanding Hofstede’s and Trompenar’s cultural value dimensions of the host countries would help the headquarters manage across borders without culture shock

In the Communication process, these cultural variables cause cultural noise, which means misinterpretation of the message from a sender to receiver or anything that undermines the communication of the intended meaning. Ethnocentric attitude is one of the sources of noise in cross culture communication (Deresky, 2017) In the Levendary café case study, Foster insisted hiring a financial analyst to manage China audit team and Chen refused to cooperate. In addition, when Foster raised concerns about Levendary’s reputation and image, Chen felt his hard work and efforts were not being appreciated. To avoid cultural noise, Foster should develop cultural sensitivity, show empathy, and have face- face communication

Besides cultural differences, the headquarters should comply with the local law and government regulations regarding taxes and accounting system of the subsidiary country, which doesn’t apply to the US Generally Accepted Accounting Principles (GAAP).Therefore, to standardize the reporting structures and other financial procedures, a new division in the company with global team members should be created, specifically to oversee all the operations of the US controlled foreign subsidiaries, and henceforth streamline the communication between them, and evaluate the operation performances and strategy implementations in monthly or quarterly periods.

Due to the lack of international management and expanding experience, Levendary cafe needs to recruit more local or foreign employees to build a new department for China market, because China is a potential market with its growing GDP. Furthermore, for improving the effectiveness of communication and increasing the efficiency, the headquarter could provide a separate path for Chinese managers to directly report to headquarter.

Other established players like KFC, McDonald's are more standardized and successful in Asia though they haven’t made many changes to menus, Deny’s in Japan changed the entire menu catering towards local taste preferences but the levendary café in China changed both the menu and the look and feel of it depending on the location. Therefore, “Thinking Local and Acting Global” is a successful and mature strategy for quick service restaurant chain to develop foreign markets.

Reference

Ambler, T, Witzel, M & Xi, C 2009, ‘Doing Business in China’, Routledge Publication, New York.

Bonache, J & Noethen, D 2014, ‘The impact of individual performance on organizational success and its implications for the management of expatriates’, The International Journal of Human Resource Management, Vol 25.

Deresky, H 2017,’International Management: Managing Across Borders and Cultures’, 9th edition, Pearson Education Limited, England.

Meyer, E, 2015, ‘When culture doesn’t translate’, Harvard Business Review, October, 2015.

Qin, C & Zhang, C 2015, ‘A case study of expanding business from the US to China: Addressing cross- cultural management’, Industrial Engineering and Manufacturing Technology-Proceedings of the 2014 International Conference on Industrial Engineering and Manufacturing Technology (ICIEMT 2014), pp. 213-216.

Tian, R & Wang, C 2010, ‘Cross-Cultural Customer Satisfaction at a Chinese Restaurant: The Implications to China Foodservice Marketing’, International Journal of China Marketing, vol.1, no.1, pp.60-72.