Cultural Influences On Global Businesses: A Case Study Of Coca Cola Amatil

Cultural Differences and their Impact on Coca Cola Amatil

Question:

Discuss the different type of cultural influence in organizations. 
 

When dealing with global business, organizations has to deal with different type of cultural differences in which they operate. It would be effective for the global organizations in positively responding to different cultures in term of business communication (Griffith & Dimitrova, 2014). This practice makes global business to survive for a longer period of time. The organization that is chosen as example for this study is Coca Cola Amatil (CCA), which is the largest food and beverage organization in Australia. With successfully handing local business, the organization also operates in five other countries namely New Zealand, Papua New Guinea, Samoa, Indonesia and Fiji (Coca-Cola Amatil, 2016). The people in these countries pose separate culture that is different from each other and it influence the business operation of this organization. The study will describe four cultural influences that influence the business operation of this organization. Effective information technology offers business new avenues for allowing them in remaining competitive in local as well as international market. Apart from that, the study will also analyze the ways technology has changed the landscape of Coca Cola Amatil in operating in overseas market.

In this modern era, almost every company including small scale or large-scale organization is trying to have a global reach around the world. Communication and cultural differences are always there, while organizations try to involve in trading with other foreign country. Apart from that, the employees of the international organizations may face various cultural differences in their work environment due to cross-cultural differences. Culture is collective programming in the mind of people that makes one group of people different from other group of people (Pudelko et al., 2014). In many cases, business operations are hampered because organizations do not take time in understating different cultures of people international market in which they operate. Coca Cola is the largest food and beverage organization that provides non-alcoholic ready to drink beverage. It operates in over five countries and thus, different cultures of those countries influence greatly the business of this organization (Kossek et al., 2015). Following are the main four cultural influences that influence Coca Cola Amatil in operating overseas. 

Though it can be seen that, Australian people are down and to earth and speak politely, they are sarcastic and like to use humor in their language. This nature of Australian culture has made difficult for Coca Cola Company in operating in overseas business. It has been found that the people of Australia do not initially like to welcome people because of sustaining privacy in the business. In this context, when Coca Cola Amatil operates in New Zealand and Fiji, the people feels is difficult in sharing information, as the people of these two countries are very friendly and open minded (Brouthers, 2013). Apart from that, the organization also faces language differences in operating in overseas market. It has been found that in case of operating in the market of Fiji and Indonesia, the organization faces language barrier, as these countries do not use English as their main language. The main language of Fiji is Fijian and therefore, it is very difficult for the employees of this organization to understand the Fijian language (Clampit et al., 2015). The case is same for Indonesia in understanding Indonesian language of the country.

Language Barriers and their Effect on Business Communication

According to Ramsey et al., (2014), the sense of irony of Australian employee of Coca Cola Amatil may not be welcoming to people in other countries when making business in those countries. On the other hand, the accent with which the people of Australia speak their English is quite different from other countries in which they operate their business. Thus, when the organization send their employee from their home country to other country, the language may not be understandable to all the employees in those countries. On the other hand, Beugelsdijk et al., (2015) opined that Australians are very mindful in the sense that they are not willing to impress others by showing that they are better than others are. For this reason, the marketing strategies that Coca Cola use in this country is smooth and do not use aggressive sense marketing strategy. On the other hand, the people of New Zealand are very much tended to take part in competition. Due to this culture of people, all the organizations in this country make tough competition among them showing one’s priority over others (Wood & Wilberger, 2015). Therefore, the organization follows aggressive marketing strategy in this country for remaining competitive among competitor organization. Apart from that, in Indonesia people like group thinking that means any group work is preferred in this country. Due to this nature of people in Indonesia, individual business is not preferred in this country. Therefore, being an individual business, the CCA has to follow unique product strategy for ensuring the strength of individual business (Eckman et al., 2015).

Religion influences organizations in several ways, while operating in overseas market. Religion is an important culture that shapes the behavior of the people. Generally, the people of Australia is a multicultural society and people have right to choose any religion. According to Wilken et al., (2013) the people do not have to face criticism upon selection of religion. In this context, when the employees of this organization are sent to New Zealand, they may face criticism if they do not hold Christian language. Christian culture of Australia and New Zealand, facilitate Coca Cola in increasing the production and commercial activities, as the people in this religion tend to be give ideas in business activities. On the other hand, Chang et al., (2013) opined that Buddhist and Hindu religion in Fiji influence the business of this organization as, the people from these religions are not that much tended in business activity. According to Lu and Fan, (2015), the promotional activity of the organization is also influenced according to different occasion of different religion in the international markets. For example, in New Zealand and Australia, Coca Cola tend to promote their products through highlighting the Christmas Occasion, but on the other hand, in case of Fiji, the organization has to promote their products through highlighting Hindu and Buddhist occasions. It has been found that though Indonesia is a multi religion country, majority of people in this country are Muslim. On the other hand, Caligiuri and Lundby, (2015) opined that employees having different religions are employed in CCA; most of them are Christian who come from their home country Australia. In this situation, when there is the event of Christmas party, Christian people remain engaged in being alcoholic as it is their prime festival. In such circumstances, employees from another religion do not really like this festival. Apart from that, there are many Muslim employees in CCA, who dislikes drinks and thus, these employees become demoralized (Dunning, 2013).  

Religion and its Influence on Coca Cola Amatil’s Business Operations

Generally, the businesspersons of Australia apply their shrewdness in making business relationship for checking whether the business will be sustainable or not. In this way, the owner of Coca Cola Company also thinks very crucially for making any business deal with other organization. According to Oxtorp, (2014), the organization do not have the tendency to share too much information at the first meeting of business deal for protecting important information from new person. On the other hand, Drnevich and Croson, (2013) opined that the people of New Zealand and Indonesia do not welcome this culture and therefore, pose high chance of cancelation business deal in the first meeting. In Australia, Coca Cola do not discriminate between male employees and female employees. They give equal opportunity to all of the employees including male and female employees. This culture often does not match with the culture of Indonesia and Papua New Guinea because in these countries people do not give priority to women employees (Lu & Fan, 2015). In this situation, if the organization sent any female employee to make business deal with any organization of these two countries, they feel uncomfortable in giving priority to that female employee. 

In Australia, Coca Cola Amatil does not generally pose too much conservation in the dress code matter of the employees. According to Caligiuri and Lundby, (2015), the people Australia are not very formal in their business meeting, but the dress code of the employees of Coca Cola Amatil is conservative and the employees wear formal dress in the workplace. The male employees of CCA in Australia tend to wear dark colored conservative business suit in the workplace and business meeting. On the other hand, Wood and Wilberger, (2015) opined that in Indonesia and Fiji the employees have to wear strict conservative dress. In this kind of business culture, the employees of CCA from Australia face lot of issues in accommodating with it. The employees always have to wear cotton wear because of hot weather of the country. Apart from that, the female employees this country has to wear conservatively that will ensure that the employees are covered with ankle to neck (Griffith & Dimitrova, 2014). In this case, any employee shifted from Australia to these countries, face lot of dress related issue. The female employees are also restricted to wear any type of tight fitting cloths and thus, create the employees from Australia of CCA uncomfortable with the culture of Indonesia and Fiji (Lu & Fan, 2015).

According to Narula, (2014), technology focused organization are more likely do success international business in foreign markets. On the other hand, Al-Abed et al., (2014) opined that technology also facilitate overseas business in developing value added products. With the help of technological advancement, international organizations around the world have become able to flourish in their business. The evidence of technological blessing can be evidently seen in case overseas business operation of Coca Cola Amatil. It has changed the landscape of the organization in operating overseas. Coca Cola has signed a plan with IBM for providing cloud-computing software in the organization (Lee et al., 2012). The deal has brought operational agility in CCA because of adopting cloud software in the organization. With the blessing of cloud computing software in the organization, the employees from different countries of this organization can access the information regarding the business from different place with greater flexibility. According to Prajogo and Olhager, (2012), disaster recovery option of cloud software has helped this organization in creating data recovery system that in turn has reduced the cost and time of the organization in engaging third party for keeping back up of information. On the other hand, vom Brocke et al., (2014) opined that Cloud computing has also helped the organization in automatically updating the software so that the stakeholders of the organization can get updated information.

The Impact of Technology on CCA’s Global Operations

Coca Cola Amatil has also implemented Enterprise Resource System (ERP) in their organization that is one of the most recognizable blessings of technology. This ERP system has made the organization to make centralized local and global data. The ERP system has given ample of opportunities to the organization for drilling out highly specific data of every local unit and international unit in which it operates (Park & Choi, 2014). Thus, this technology has made it easier in aggregating all the international data into one singly system for a better control over it. According to Caligiuri and Lundby, (2015), with the coordination viewpoint of business, ERP has given the organization an opportunity to coordinate every single sale, manufacturing and distribution unit both globally and locally for checking whether each stakeholder in supply chain department is working in coordination with other or not. On the other hand, Drnevich and Croson, (2013) opined that ERP system has also enabled the organization in managing cost for complex supply chain. Most important aspect of this technology is that it facilitates the organization in getting visibility over the financial aspect of every local and global business unit. According to Prajogo and Olhager, (2012), as an international organization, Coca Cola Amatil has to different exchange rate and currency of different organization that is difficult to handle properly. ERP act as the facilitator for this organization in translating the currency and presenting it in local currency so that they can easily calculate the cost and benefit associated with global business (Park & Choi, 2014).

One of the toughest task of global business is ensuring that the product is shipped in right place where it is intended to place.UPS service has helped the organization in checking the estimated cost and associated international rules and regulations regarding the shipment of products. The is the blessing of GPS and UPS software through which the organization can easily track the goods under shipment and thus, loss of products in international shipment is minimized (Wood & Wilberger, 2015). The organization can also check the shipping time of the goods and thus, flow of consistency of raw material in the inventory of the organization. With the help of this GPS system, the organization can also maintain good relationship with the vendor group, as the organization can ensure that their goods are being shipped as per the schedule of the organizational process. With help of technology, the organization makes online payment to overseas vendor and third parties through online portal. Apart from that, the organization can also receive payment from overseas parties through online payment system (Drnevich & Croson, 2013). It also facilitates the organization in paying the employees working over overseas market.

With the use of technological tools like Skype and Google voice, the organization can arrange business meeting with other international units that reduces time and cost of the organization. With the instant messaging features of Skype, the organization becomes able to keep in touch with the international staffs (Prajogo & Olhager, 2012). The organization can also check the progress of the projects in the international markets and ask questions regarding the problem faced in the project so that they can send instant document for solving the problem. It is an efficient of replacement of face-to-face meeting, which is very much useful in to conduct meeting with overseas employees (vom Brocke et al., 2014). It also reduces the time of cost of the organization in terms of business travel.

Conclusion

According to Prajogo and Olhager, (2012), social media is another technological aspect that facilitates the organization in promoting their products in international market and reaching o larger group of people in shortest period of time. Social media also empowers the word of mouth promotional strategy of the organization. With the help of social media channels, the customers can share their opinion regarding the product features with their friends in the social networks and can also suggest them to buy the products. Thus, it has effectively increases the promotional effectiveness of the organization by increasing customer database. On the other hand, Al-Abed et al., (2014) opined that social media can also acts as a platform of customer feedback system. Through this social media site, global customers can post their comment and suggest improvement over the product that also minimizes the cost of the company. Technology has also helped CCA in outsourcing some of their department in another country. Thus, the organization has become able to get cheaper labor and low rate tax over the business that has enabled then in getting greater profit coming out of the business operation (Lee et al., 2012). Many technological tools provide commercial services that provide country specific market research and trade statistic information that facilitates the organization in changing the business policies according to the market condition of different countries (Drnevich & Croson, 2013).

According to vom Brocke et al., (2014), one of other aspects that has shaped the strength of this organization is use of electronic commerce in the business operation. The organization outsourced the electronic commerce service in which the customer can directly order for their drinks and get the order to be delivered by sitting at their home. On the other hand, Park and Choi, (2014) opined that e-commerce and electronic data exchange helps the organization in providing important information to the suppliers as well as the customers. Electronic data exchange has also minimized the pressure of paperwork by introducing the exchange of data electronically. In this way, it is very much helpful in keeping huge data of to be stored electronically. Not only storing data electronically, the data also stored with high degree of security. Thus, unethical access of data by unauthorized person is prevented by ensuring high level of security (Drnevich & Croson, 2013). It also facilitates the organization in making strong relationship with global traders, through providing accurate and timely information. 

4.0 Conclusion

While concluding the study, it can be said that Coca Cola Amatil operates in five countries with facing different cultural barriers. It has been found that in Australia, people generally use English language, but in Fiji and Indonesia, the people generally speak Fijian and Indonesian Language. Therefore, the business faces language differences in operating over these countries. Apart from that, the organization has also to customize the promotional activity in different countries according to the main religious occasion of those countries. The use of sarcasm of the Australia people is not always welcoming in other countries. Thus, the organization sometime faces misunderstanding in business operation. On the other hand, the organization is also influenced by culture in terms of dress code. It has been found that the female employees of CCA who are shifted from Australia to Indonesia faced dress issues because of highly strict restriction of this country on dress codes. It has been found that technology has strongly shaped the integration of global business operated by the organization. The use of cloud computing system has given the organization in accessing organizational information from anywhere in the world. Apart from that, the blessing of enterprise resource system has also helped the organization in coordinating each unit of global business into a single unit.  

References

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Beugelsdijk, S., Maseland, R., Onrust, M., van Hoorn, A., & Slangen, A. (2015). Cultural distance in international business and management: from mean-based to variance-based measures. The International Journal of Human Resource Management, 26(2), 165-191.

Brouthers, K. D. (2013). A retrospective on: Institutional, cultural and transaction cost influences on entry mode choice and performance. Journal of International Business Studies, 44(1), 14-22.

Caligiuri, P., & Lundby, K. (2015). Developing Cross-Cultural Competencies Through Global Teams. In Leading Global Teams (pp. 123-139). Springer New York.

Chang, W. W., Yuan, Y. H., & Chuang, Y. T. (2013). The relationship between international experience and cross-cultural adaptability. International Journal of Intercultural Relations, 37(2), 268-273.

Clampit, J., Kedia, B., Fabian, F., & Gaffney, N. (2015). Offshoring satisfaction: The role of partnership credibility and cultural complementarity.Journal of World Business, 50(1), 79-93.