Michel Camdessus, former managing director of the International Monetary Fund (IMF) said that: “Globalization is simply the continuation of the trend toward greater international economic integration that has been under way for the last fifty years. The difference is that today’s markets are larger, more complex, and more closely integrated than ever before. And now capital moves at a speed and in volumes that would have been inconceivable a few decades ago.” (Walker, Walker, Schmitz, 2003, p.2). One could surely argue that, globalisation as defined by our contemporary experience, is a continuation of a historical evolution that has been underway for at least the past five hundred years, with European colonialisation and imperialism leading to a dynamic between parochial tribalism and global commerce that frames the modern state of affairs- a dialectical dynamic that Benjamin Barber (1996) fittingly calls Jihad vs. McWorld.
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As stated by Elmer (2003), “Stepping out and fitting in around the world” is what multinationals brand of companies are doing to conquer new markets and to be sustainable on the long run. The challenge of crossing the border “to step out and fit in each and every culture worldwide (Elmer, 2003), and be both a global and a local company is the effort of Fast Food brands like KFC, McDonalds and Nando’s. Downs (1993) stated that “One of the greatest stumbling blocks to understanding other peoples within or without a particular culture is the tendency to judge others’ behavior by our own standards”. As per Criag Storti (1989. P. 32-34): “The more we retreat from the culture and the people the less we learn about them; the less we know about them the more uncomfortable we feel among them; the more uncomfortable we fell among them the more inclined we are to withdraw.” Therefore to survive a multinational has to learn about the people of the country they are operating in.
Hofstede (1991), Trompenaars (1993), Czinkota and Ronkainen (1993) all agreed that culture is based on languages, economy, religion, policies, social institutions, class, values, status, attitudes, manners, customs, material items, aesthetics and education, which subsequently influences managerial values. The ability of Hofstede’s framework to capture more than the individualism-collectivism dimension of culture contributed to its popularity (Sivakuma and Nakata, 2001).
According to Hofstede (1980), the uncertainty avoidance dimension deals with the national culture’s ability to tolerate ambiguity. Individuals in these high uncertainty avoidance cultures tend to be rigid and dogmatic. They are threatened by unknown situations. Life is perceived to have many risks, and the resultant stress needs to be lessened. So the cultures may rely upon such mechanisms as rules, customs, laws, and religion in pursuit of security.
1.2 Problem Definition
With the effect of globalization, it has been noted that many multinational fast food brands are establishing in the Mauritius. After nearly 30 years that KFC implemented itself in Mauritius, we now have an influx of different famous brands of fast foods. Another phenomenon leading to this increase of fast food on the market is the opening of retail outlets like Bagatelle and Cascavelle. Mauritius is known for its history of different ethnic groups and with a diversity of food culture, the question arising is how these companies are able to gain share of the market and how they have adapted themselves to the Mauritian culture.
1.3 The industry understudy
This study will be conducted for the Fast Food industry with reference to the following multinational brands: KFC, McDonalds and Nando’s. This will enable us to analyse how they are operating and how the importation of American and Portuguese food culture are adapting to our famous Mauritian cuisine:Bryani, Dal puri, Gateaux Piment, Mine Bouille and other typical Mauritian food.
1.4 Aim of research
The aim of this research is to investigate how these multinationals are facing the cross cultural barriers and how they have been able to overcome them.
1.5 Objective of Research
To identify cross cultural barriers existing in the Mauritian Market and the fast food sector.
To analyse how cross culture barriers affects the Marketing strategies of Fast Food Companies
To analyse the impact of cross culture on the brand equity of these Multinationals
To analyse the impact of the anxiety and uncertainty avoidance theory faced by Fast Food Multinational on the Market.
To evaluate how Mauritians has accepted these Multinationals in their culture.
1.6 Research Structure and hypotheses
Companies who extend their business abroad have to face a challenge of cross-cultural communication. Bennis and Nanus (1985) refer to Erez (1992) and claim that communication is the only approach by which group members can cooperate with each other toward the goal of organization. In line with this a possible hypothesis is as follows:
HYPOTHESIS 1
Ho: Cross cultural barriers have no impact on fast food multinational marketing strategies
H1: cross cultural barriers have impact on fast food multinational marketing strategies
Steenkamp et al. (2003) found that perceived brand ‘globalness’ was positively related to perceived quality and prestige. Another hypothesis can be:
HYPOTHESIS 2
H3: Cross cultural barriers have no impact on brand equity of fast food multinational marketing strategies
H4: Cross cultural barriers have impact on brand equity of fast food multinational marketing strategies
Hofstede (1991, p. 116) points out that ‘uncertainty avoidance should not be confused with risk avoidance even more than reducing risk, uncertainty avoidance leads to a reduction of ambiguity’. One of hypothesis will show this from the study
HYPOTHESIS 3
H5: The anxiety and uncertainty avoidance theory have no impact on Fast foods Multinationals on the Market.
H6: The anxiety and uncertainty avoidance theory have impact on Fast foods Multinationals on the Market.
Levitt (1983, p. 87) argues that well-managed companies have moved from emphasis on customizing items to offering globally standardized products that are advanced, functional, reliable and low priced. The following hypothesis will try to this point.
HYPOTHESIS 4
H7: Mauritian has adopted these Multinational Fast Foods.
H8: Mauritian has not adopted these Multinational Fast Foods.
1.7 Structure of the Study
The dissertation will comprise of different chapters as outlined below.
Chapter 1: Introduction – defines the background of the research and outlines the aim and research objectives. It also gives an overview of the structure of the study to be carried out.
Chapter 2: Literature Review -presents a detailed account of relevant materials in relation to the subject matter including theories and principles relating to cross-cultural barriers, also in relation to the food and fast foods multinationals. It also emphasizes on Individualism versus collectivism and uncertainty avoidance in relation to Hofstede’s cultural framework.
Chapter 3: Situation Analysis – It provides a brief of the Mauritian Fast food Multinationals and the problem they have encounter to be present on the Market
Chapter 4: Methodology – defines the basic methods used to carry out this study along with the procedures that are used to analyse and prepare the collected data. It also identifies the problems and limitations during the research.
Chapter 5: Analysis & Findings – Presents an analysis of the data collected together with a discussion.
Chapter 6: Recommendations & Conclusion – provides recommendations to provide a smoother adjustment for the Fast Food Multinationals in view with cross cultural issues.
Chapter 2 – Literature review
Since the very beginning of human history, food has assembled peoples in the way that no any other things have been able to do. No matter whether it was the ancient agora or today’s modern day supermarket or restaurant, the market of food has always played a central role in human’s lives, communities, communication, and culture (Huddleston et al., 2009; DeJesus and Tian, 2004). Culture is often defined as a system of values as well as a determinant of consumer behavior. Members of a particular culture transform their experiences with their physical and social environments to an abstract level of belief about what is desirable and what is not (Lillis and Tian 2010). Such encoded beliefs, called values, act as a general guide for everyday behaviors, including those pertaining to buying and consumption. Cultural values differ among nations along Hofstede’s four dimensions of national character (Emery and Tian, 2003; Hofstede, 1984; Tian, 2002). The growing amount of international business has increased the need to understand consumer behavior from a cross-cultural perspective (Mooij, 2004; Senguder, 2001; Sunderland and Denny, 2007; Tian 2002 a).
With the globalisation of markets, marketing research has assumed a truly international character and this trend is likely to continue (Malhotra et al., 1994). Today’s Consumers have greater knowledge of the value of various competing offerings. Effective communications may be the most important competitive advantage that firms have to meet diverse consumer needs on a global basis. According to Edmondson (2000), two-thirds of all industries either already operate globally or are in the process of doing so, McDonalds’s earns over 62% of its income outside the U.S. For cross-cultural acceptance, “Altering and adjusting the marketing mix determinants are essential and vital to suit local tastes, meet special needs and consumer’s non-identical requirements” (Czinkota and Ronnenken, 1995). Growing internationalization of tastes and buying patterns has made the development of global and regional brands more feasible (Doyle, 1994).
2.1 Fast Food Industry and Food culture
The fast food revolution essentially had its origins in the US in the mid 1950’s and this style of catering has continued to grow there and to spread to most of the rest of the world in the decades since then (Jones et al, 2002, p.41). Schlosser (2001) has suggested that within the US the impact of this revolution has been seen to be particularly pervasive. He argues, for example, that during a relatively brief period of time the fast food industry has helped to transform not only the American diet but also our landscapes, economy, workforce and popular culture. More generally fast food can be seen as a powerful symbol of globalisation and of post-modern society and few countries of the world seem immune to its apparent attractions. McDonaldss, for example, claim to serve 45 million customers every day in 30,000 restaurants in 121 countries around the world (Jones et al, 2002, p.41).
Fast food have been defined by Bender and Bender (1995) as a “general term used for a limited menu of foods that lend themselves to production-line techniques; suppliers tend to specialize in products such as hamburgers, pizzas, chicken, or sandwiches.” Fast food is one which gained acceptance of Indian palate after the multinational fast food players adapted the basic Indian food requirements with vegetarian meals and selected non-vegetarian options excluding beef and pork totally from their menu (Goyal, and Singh, 2007).
Carmouche and Kelly (1995) suggested a list of factors that shape the food consumption behavior: social class, gender, age, culture, race, and religion (also considered a cultural factor). Food is one important factor that influences the choice to visit a particular place and affects tourist’s attitudes, decisions, and behavior (Henderson 2009; Hjalanger and Corigliano 2000). Ample evidence has been found that religion can influence consumer attitude and behavior in general and food purchasing decisions and eating habits in particular (Bonne and Verbeke 2008b).
In many societies, religion plays one of the most influential roles in shaping food choices and consumption behavior: the types of food that can be consumed, who should prepare and cook the food at what times, and how and when to eat it. However, different religions have different rules and teachings about food consumption behavior. Followers of religions also differ in observance of these rules: some follow the rules strictly, while others behave with more flexibility, and few may not care at all. Hence, in order to investigate the relationship between food consumption behavior and religion, it is important to give ample consideration to this religious diversity both within and among the followers of each religion. (Maedeh Bon, Mazhar Hussain, 2010) All restaurants of KFC, an American fast-food chain, in France are Halal certified and KFC also serves such food in eight of its British restaurants on a trial basis (The Economist 2009).
2.2 Culture and Cross Culture
2.2.1 Definition of Culture
According to Ferraro (1994), the only requirement for culture is to be human is that the people in the world belong to a culture. Marzheuser (1995) stated that culture consists primarily of the symbols and stories people use to communicate their history and values. For Hall (1976), culture is a word which stands for the sum of earned behavior, patterns, attitudes and material things. Culture has been defined as “the collective programming of the mind which distinguishes the members of one human group from another” (Hofstede, 1980). Beyond individual differences, human dispositions and behaviors are influenced by the norms, beliefs and values of their cultural environment (Triandis, 1989).
Furthermore, cultural values shape not only one’s behavior, but also one’s perceptions of the self and of the social environment (Triandis, 1989). Much insight has been gained from the GLOBE research project (House et al., 2004), where culture was measured both as values of the respondents and in terms of their perceptions of how people deal with collective challenges within their culture.
2.2.2 Cross Culture
Okazaki et al (2011) defined global consumer culture positioning as: a brand is associated with a widely understood and recognized set of symbols believed to constitute emerging global consumer cultures. As Simon and Dolan (1997) illustrate; McDonalds’s has been very successful with package offers in the USA and in Germany, where a hamburger and fries offered together with a beverage. While Local consumer culture positioning is defined as a strategy that associates the brand with local cultural meanings, reflects the local culture’s norms and identities, is portrayed as consumed by local people in the national culture, and/or is depicted as locally produced for local people (e.g., McDonalds’s chicken teriyaki ads in Japan). In contrast, foreign consumer culture positioning positions the brand as symbolic of a specific foreign consumer culture (e.g. KFC slogan “Finger-lickin’ good” was translated as “Eat your fingers off” in China).
Beyond individual differences, human dispositions and behaviors are influenced by the norms, beliefs and values of their cultural environment (Triandis, 1989). Furthermore, cultural values shape not only one’s behavior, but also one’s perceptions of the self and of the social environment (Triandis, 1989). Cultural differences have significant impact on our intercultural communication. They are the source of misunderstanding, misinterpretation, anxiety, and uncertainty, which ultimately result in miscommunication (Stephan and Stephan, (2002); Gudykunst (2002); Gudykunst and Lee, (2002). Generally, culture is conceptualised as a shared way of life collectively developed and shared by a group of people and transmitted from generation to generation (Tubbs and Moss, 1994). Culture embodies many complex elements such as beliefs, values, language, political systems, and tools which together give a group its code or characteristics (Griffin (2000); Tubbs and Moss (1994). This code is not imposed by one individual or an external body. Rather, it is “socially constructed” (by members that make up the group) and “historically transmitted” (Philipsen, (1992) and Griffin (2000)).
Intercultural communication is thus “the exchange of information between well-defined groups of people with significantly different cultures” (Barnett and Lee (2002). The process is quite complex in the sense that this exchange of information takes place in a context which is a fusion of significantly different systems. The process also requires conscious attempts by each party at reducing “uncertainty about the future behaviour of the other party through an increase in understanding of the other group” (Barnett and Lee (2002); Gudykunst, (2002)). For Gudykunst and Lee (2002) and Griffin, (2000) Cultural variability (the extent to which cultures differ) is key to any conceptualisation of intercultural communication. Various studies have examined cultural variability at the level of power distribution (or power distance), uncertainty avoidance, gender roles, face negotiation, individualism-collectivism, and others.
Mazneski (1994) opines that cross-cultural awareness facilitates to perform a set task successfully. Berthon (1993) views culture as the results of the human actions and shows the link between the ideas of mental programming and the consequence of behaviour derived from this. Therefore, cross-verging across culture has different aspects such as attitude, communication, conflict and negotiation, performance and compensation, which explain the ethical issues and how to appraise them. Bond and Forgas (1984) concluded that different perceptions, attitudes and biases in different cultures ultimately mould the ethical monochromes across-culture, have a distinct presence ubiquitously. In that light, McFarlin and Sweeney (1998) observe that once you perceive and interpret the behaviour of another person, you often must communicate your feelings or reactions to what took place which is an extension of the ethical base to appraise performance and preference. Ambos and Schlegelmilch (2008) argue that one culture may support certain type (or types) of organizations rather than other types, and culture differences will eventually influence on the performance of company.
International marketers have long realized that products and services frequently must be adapted to the varying needs and preferences of consumers in different countries (Cateora and Graham 2002). As McDonalds’s adapted its products in India and has made changes to its menu to cater to local tastes elsewhere in the world. In 1996 McDonalds’s launches its first restaurants in India and to respect local custom the menu there did not include beef. Instead, there was a novel item – the Maharaja Mac, made with mutton but served in the McDonalds’s sesame-seed bun (Rugimbana and Nwankwo, (2003).
The goal of marketing management is to create positive identity impressions in the local consumers’ minds, even if this entails some alteration to the company’s global identity expressions. As reported in The Economist (2001), in the fast-food industry, menu offerings are influenced by the prevailing cultural values – Maharaja Macs at McDonalds’s India, Teriyaki McBurgers at McDonalds’s Japan, and Kosher and non-Kosher restaurants in McDonalds’s Israel – and advertising, outdoor signage, and in-store ephemera need to be in the native language. Restaurant architecture frequently incorporates native motifs and global trade characters can take on a local flavor. A Starbuck’s in Shanghai has a Ming Dynasty façade and the entrances of some Chinese KFC restaurants are guarded by full-size, fiberglass models of Colonel Sanders who, in his Asian reincarnation, looks a little portly like a Buddha. According to former CEO, Jack Greenberg, localization has contributed to McDonalds’s worldwide success (Foreign Policy 2001), although some analysts warn that decentralization has become so pervasive that it threatens to undermine the main pillars of the brand – service, quality and cleanliness (The Economist 2001).
2.3 Cross Culture Barriers
Hofstede (1991), Trompenaars (1993), and Czinkota and Ronkainen (1993) all agreed that culture is based on languages, economy, religion, policies, social institutions, class, values, status, attitudes, manners, customs, material items, aesthetics and education, which subsequently influences managerial values. Witkowski and Wolfinbarger (2002) found that the relationship between the different components of service quality – reliability, empathy, responsiveness, assurance, and tangibles and perceptions of overall service quality varied across both cultures and across service settings.
2.3.1 Language
Language is the key to the heart of a culture, so related are language and culture that language holds the power to maintain national or cultural identity. Victor (1992) noted that there are at least 2, 796 languages spoken on planet earth. According to Rubin (1992), language is a set of characters or elements and rules for their use in relation to one another and as described by Nanda and Warms (1998) language does more than just reflect culture: it is the way in which an individual is introduce to the order of the physical and social environment. As the definition of Dawson (1967), language lies at the root of culture, and that culture and language are inseparable aspects of the same process. According to Edwards (1985), language is important in ethnic and nationalist sentiment because of its power and visible symbolism (reason why the Mauritian government as implemented Mauritian Creoles in schools). For Bolch (1996) language and culture are so firmly intertwined that optional cross-cultural international business cannot be attained without substantial foreign-language capabilities. Reasonable cultural awareness without foreign-language capabilities is common, especially among English speaking business people, but such a lack of skills set very definite limits on the efficacy of cross-cultural performance. Intercultural communication gained prominence after efforts by anthropologists and linguists like Hall and Lado to link language, culture, and communication (Kramsch, 2001).
2.3.2 Norms, Roles, Beliefs and Values
Norms are culturally defined rules for determining acceptable and appropriate behaviour (Tubbs and Moss, 1994). They include those that govern social situations and conversational routines such as greetings, making requests, and expressing various emotions. Roles are also sources of cultural variability. Roles are sets of norms applicable to specific groups of people in society. As culture relates to norms, values and customs of people it generates behavioural differentiation. Culture as a set of norms, rules and customs, as a result people from different cultures have differences in their norms and customs. Culture is a pattern of spiritual, emotional, mental and physical realities, all of which interact in the life of society and individuals. It involves the way we think, dress and speak, the words we use, our beliefs, the food we eat, the style of our clothes and our homes, the relationship between relatives, our music and our art, and much more. Higher education levels expose individuals to different cultural perspectives and make them less likely to follow local behavioral norms and more global as consumers (Keillor et al., 2001). “Cultural syndromes are cognitive structures that help one organize and interpret the world by focusing attention on certain patterns or themes in the subjective elements of the environment, such as values, norms, beliefs, and assumptions (Triandis, 1994a)
2.3.3 Status
Homer and Kahle (1988), the value attitude behavior hierarchy would support the contention that cultural values do correlate with attitudes. Orientation toward status is another cultural dimension identified as affecting human behavior and refers to how people are judged in society (Trompanaars & Hampdon-Turner, 1997). ‘Achievement” is a cultural orientation where people are accorded status based on how well they perform their functions (e.g., subject matter expertise) and on what they have accomplished. ”Ascription ” is a cultural orientation where status is attributed based on who or what a person is (i.e., based on age, gender, or social connections).
2.4. High context-communication and low context communication.
High context or Low context communication theory is one of the most important theories in cross-cultural research, which can be viewed as a culture based on the messages that people within the culture prefer to use (Richardson and Smith, 2007). It properly links management style and staff behaviour to discuss the issue of cross-cultural management in communication. According to Richardson and Smith (2007) refer to Hall (1976) and argue that cultures cannot be easily classified into High Context or Low Context, but to some extent, “some cultures tend to be at the higher end while others are at the lower end of the continuum”. In a high-context culture, people interdepend on each other. Information is widely shared through the word with potential meaning. In a low-context cutlure, people tend to be individualized, kind of alienated and fragmented, people do not involve with each other too much. High context communication tends to engage an indirect way to express while low context communication prefers direct information exchange (Kim, Pan and Park, 1998, Richardson and Smith, 2007). In a low-context culture, people coming from other culture can easily match these machinations, but in a high-context culture, these high-context machinations cannot be easily matched by people coming from low-context culture (Holden, 2002).
The characteristic of high-context communication is economical, fast, efficient, and satisfying, however, programming is time-consumed (Kim, Pan and Park, 1998). Contrarily, low-context massages are more context-free than high-context communication, information about the character and background and values of the participants are less influencing on people to make deals, however, the reliance to make deal is upon the explicit communication. In high context cultures communication involves messages ”in which most of the information is already in the person, while very little is in the coded, explicit, transmitted part of the message” While low context the mass of the information is vested i n explicit code (Hall & Hall, 1990). Cultural dimensions such as uncertainty avoidance, high-low context, field dependence-independence, and analytic-holistic reasoning are all cultural dimensions that may impact the leader’s search (Salas e t al., 2004).
2.5 Hofstede cultural dimension Framework
The human relations theme contains cultural dimensions that address how members of cultures react, interact, and develop relationships with others. Specifically, this theme includes dimensions that describe the identification of in- versus out-groups and corresponding expectations (Hofstede, 1980), preferences for individualistic tendencies versus group consensus and corresponding behavioral consequences (Trompenaars & Hampden-Turner, 1998), and the maintenance of the status quo (Schwartz, 1999). The power relations theme contains cultural dimensions that revolve around peoples’ beliefs, values, and subsequent behaviors resulting from perceptions of power. Cultural dimensions within this theme guide rules and regulations regarding people’s reaction to power as well as the perception, acceptance, and adherence of power being distributed unequally (Hofstede, 1980). Hofstede’s classification was originally related to work values rather than consumer behavior and other micro phenomena; it might be less relevant in more culture specific studies on more micro phenomena in consumer behaviors (Yau et al. 1999). However, his work appears to be heavily relied upon because of its extensiveness across cultures and its intuitive appeal.
While the first four themes deal primarily with direct social interactions, the next several themes pertain to differences in cultures’ orientation to more inanimate objects (i.e., rules, times, nature). Dimensions, which pertain to a culture’s orientation to rules, include those that describe the adherence to, application of, and comfort with rules for members of a certain culture. Specifically, this theme refers to attitudes and preferences for ambiguity, rules guiding actions, and the amount of rules that govern behaviour for a particular society (Hofstede, 1980). National cultures also have different preferences with regard to perception of time and how those perceptions guide behavior. The time orientation theme refers to dimensions that explain how time perceptions of members relate to rewards, how time is viewed, and whether or not members pay attention to time (Hofstede, 2001; Hall & Hall, 1990).
The following provides a brief outline of the six dimensions of national cultures (Hofstede, 2001; Hofstede et al., 2010).
(1) Power distance refers to the extent to which a society accepts the fact that power in institutions and organizations is distributed unequally. It is shown as much by the behavioural values of superiors, who display their power and exercise it, as by the behavioural values of subordinates who wait for their superiors to show their status and power, and are uncomfortable if they do not personally experience it.
(2) Uncertainty avoidance refers to the extent to which members of a society feel uncomfortable in ambiguous and uncertain situations and take actions to avoid them. The dimension of uncertainty avoidance measures the extent to which people in a society tend to feel threatened by uncertain, ambiguous or unde¬ned situations. Where uncertainty avoidance is high, organizations promote stable careers, produce rules and procedures, etc. ‘Nevertheless societies in which uncertainty avoidance is strong are also characterized by a higher level of anxiety and aggressiveness that creates, among other things, a strong inner urge to work hard’ (Hofstede, 1980a).
(3) Individualism versus collectivism refers to the extent to which individuals are supposed to look after themselves or remain integrated into groups. Hofstede (2001) defines it as “the collective programming of the mind that distinguishes the members of one group or category of people from another”. According to this definition, national culture is a set of collective beliefs and values that distinguish people of one nation from those of another.
(4) Masculinity versus femininity refers to the distribution of emotional roles between the genders. It contrasts “tough” masculine with “tender” feminine societies. A society is masculine when the dominant values favour assertiveness, earning money, showing off possessions and caring little for others. Conversely, feminine societies favour nurturing roles, interdependence between people and caring for others (who are seen as worth caring for, because they are temporarily weak). The masculinity/femininity dimension has been so called because, on average, men tended to score high on one extreme and women on the other, across societies.
(5) Long-term versus short-term orientation refers to the extent to which a culture programs its members to accept delayed satisfaction of their material, social and emotional needs. Long-term orientation is future-focused and has long-term goals whereas short-term orientations focus on respect for tradition and are oriented toward the past and the present. Long Term Orientation stands for the fostering of virtues oriented towards future rewards, in particular, perseverance and thrift. Its opposite pole, Short Term O
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