Culture And International Business: Effects Of Internationalization On Organizational Objectives

Background

Describe about the Culture And International Business for Reserch Proposal?

Organizations in different segments are expanding their frontiers beyond the national markets. However, for international expansion, the organizations have to face cultural and language barriers related to the acceptability of the products. This research focuses on the cultural issues faced by the leading coffee chain of United States – Starbucks Corporation. Initially headquartered in Seattle, Starbucks operates in around 64 countries including UK, China, Canada, Japan, USA and presently India. In the context of international expansion, Starbucks has faced various issues related to blend of cultural mix in different countries (Akerman , 2010).

The coffee chain has been boy-cotted by anti war Protestants in Lebanon and New Zealand for the higher coffee prices and adoption of American delivery style. Starbucks for expansion in the markets of China and India had to keep in mind the social tea drinking habit of the customers and accordingly plan the product line. Thus keeping in mind the various issues faced by companies initiating to expand the researcher has selected the particular topic to evaluate the effects of internationalization on organizational objectives. The researcher thus strives to establish the importance of cultural and other regulatory factors in the process of internationalization (Parrish and Linder-VanBerschot, 2010).

Hofstedes cultural dimension theory

This model is developed as a framework for the cross- cultural communication between the different employees and organizations operating in international basis. The model defines five dimensions of cultures that generally prevail within an organization or within a country. De Mooij (2010) stated that with the help of these five cultural dimensions the organizations planning to expand their business globally would be able to identify the branding strategy, advertising strategy and predict the consumer behavior. Thus by understanding the specificity of the target market of and their local habits the companies will be able to design their products accordingly. Waltz (2010) opined that the five dimensions of national cultures are namely:

Power distance: The countries with higher power distance characteristics maintain social hierarchy. On the contrary, the countries with low power distance provide equal power to all citizens. Thus for planning international expansion, the companies should target the countries with low power distance so that the products are equally sold and the whole target population is covered (Akerman, 2010).

Individualism vs. collectivism: In countries displaying individualism, the organizations may face difficulty because the employees will keep individual interests above the organizational interests. However, the collectivism culture within a country will give the organization opportunity to successfully implement both individual and organizational goals (Hofstede, 1983).

Uncertainty avoidance index: Countries experiencing high uncertainty avoidance index denotes that the consumers in that country will avoid acceptance of any new products and thus globalization in such countries is a futile effort on the part of the organization (Yeniyurt and Townsend, 2003). On the contrary, global expansion should be focused on the low uncertainty avoidance countries so that the product is readily acceptable and embraced by the consumers.

Hofstedes cultural dimension theory

Masculinity vs. Femininity: A masculine culture will hamper the growth of new products within the country and will also generate negative impact on the working conditions of the organization. Thus, organizations planning international expansion should focus on feminism cultures (Suranovic, 2010).

Long-term orientation vs. Short-term orientations: The countries experiencing long term orientation culture generally accepts new product introduction since they tend to think about the long-term future. On the contrary, the short-term culture may adopt the new product but may readily discard it.

Indulgence vs. Restraint: In an indulgent culture, the introduction of luxury and habitual products like coffee, a car etc tends to be successfully embraced compared to the restraint culture where the consumers follow strict norms and avoids new products (Leidner, 2010).

The model popularly known as the Heckscher-Ohlin model states that two major factors that is the labor and capital determines the comparative advantage of the countries involved in global trades. Thus based on the availability of labor and capital locally, the organizations should decide on the global expansion choices. Thus, Kuemmerle (2012) commented that the focus should be on the relative advantage rather than absolute advantage. Thus according to the theory organizations in labor-intensive countries should specialize in the production and export of labor-intensive products and vice versa. Baylis et al. (2013) suggested that international trade would improve economic efficiency however; Ramamurti (2012) argued that this theory will also cause a relocation of income between different factors of production.

Global product life cycle is a major element that affects the organization’s global development. The product will pass through the four major stages namely introduction, growth, maturity and decline and thus the organizations engaging in global expansion should select the countries accordingly in each stage of the product’s life cycle (Steger, 2010). In the introduction stage the organizations should successfully introduce the products in innovative countries like US, Germany and Japan were the consumers have an indulgent culture. In this stage, the product would face local competition and can be highly priced. In the growth stage, the companies will use technological advancements in order to introduce the product to developed countries. Thus, competition increases. In the maturity stage, the market becomes saturated and the demand will increase in less developed countries. Gubbi et al. (2010) opined that although the model may help in determining the phases of product in accordance to its introduction in different countries however it is difficult to determine the phases of the product.

This model helps to understand the comparative advantage of an organization in global competition. Carté and Fox (2008) suggested that the model states that the certain domestic advantages make the firms competitive globally. The four determinants of national advantage are Factor conditions, demand conditions, Related and supporting industries and Firm strategy, structure and rivalry. Hutzschenreuter et al. (2011) suggested that presence of factors like land, labor, population, natural resources locally helps the organizations to exploit the same and gain competitive advantage. Moreover, a higher demand in the home market for the product indicates growth, innovation and improvements. Thus, it is essential to establish a strong local market. Akerman (2010) further commented that if the organization gets the support of local suppliers and complementary industries then they will be able to produce products in a more cost effective manner. However, Bajona and  Kehoe (2010) argued that the model focuses exclusively on the home base advantages thereby neglecting the competitive advantages that an organization can gain in international context. Moreover, the model fails to explain the export-dependency and resource-based industries.

Factor proportions theory

The researcher aims to study the factors influencing the international expansion strategy of Starbucks and analyses the challenges Starbucks faces in the context of international expansion.

To analyze the factors influencing the international expansion strategy of Starbucks

To identify the potential challenges faced by Starbucks in the context of international expansion

To recommend necessary strategies to Starbucks in context to successful international expansion

Quantitative methods

Sampling plan

Sampling involves selection of individual respondents from a large population. In this research project, the target population is the internal management staffs of Starbucks. The representative samples among the target population are the employees who are directly or indirectly related to the expansion strategy of Starbucks. Sampling frame denotes the members of the population who are eligible to be included within the given sample. Since a quantitative research involves a questionnaire survey, hence the researcher selected the employees of Starbucks as the sample population. The researcher in this study used the random probability sampling technique in order to select the respondent employees randomly from any Starbucks store as per the convenience of the researcher (Silverman, 2010).

The researcher in case of quantitative research has avoided adoption of any recruitment strategies as the respondent employees are selected randomly from within the total target population.De Vos et al. (2011) commented that incentive plans to respondents gives rise to ethical issues if the incentive is not paid within the given research guidelines. Thus in case of employee interviews the researcher avoided indulging in any kind of incentive structure (Bernard, 2011).

The researcher for adopting opinions related to the necessary changes and challenges that Starbucks faced in order to implement the internalization strategy chose to interview around 20 employees from different Starbucks stores in UK.

Method of data collection

According to Banister et al. (2011) quantitative research is concerned with hypothesis testing or determination of a size of interest. Thus the methods used for the data collection involves experiments or clinical trials, face-to face surveys, obtaining data from MIS, online surveys, telephonic interviews etc. The researchers by availing these methods of data collection are able to successfully acquire responses from a large group of respondents within a low budget and also within a short time frame.

In this research, the researcher successfully selected face-to face field survey in order to obtain raw responses from the employees at Starbucks. According to Speziale  et al. (2011) this technique gives the researcher an advantage to personally approach the respondents and build a cordial relationship with the participants making the participant feel comfortable with the research procedure and gain their co-operation for the research project.  The researcher in this case required to analyze the current position of Starbucks after globalization and required to assess the factors that are responsible for successful globalization in Starbucks. Thus, online interviews or telephonic interviews would have hampered the response rates and increased the inaccuracies of the responses. Yue-jun et al. (2012) further added that the face-to-face interviews may be conducted either using Paper-or –Pencil personal interviewing (PAPI) or Computer-assisted telephone interviewing (CATI). In the project the researcher is a student thus keeping in mind the financial constraint, the researcher used the CATI method, which helped the researcher to reduce costs of paper required for survey questionnaire procedures. Moreover, the researcher with the use of CATI technique was able to successfully save the time of recording the data separately in the computer database (Lichong, 2010).

International product life cycle

Data Collection issues

The researcher had to further avoid the framing of questions sensitive to social desirability bias. In case of the quantitative questionnaire produced by the researcher for the current study, the employees would avoid answering personal questions related to income, contact numbers and previous employment details. Thus, the researcher in order to make the employees comfortable and effectively acquire the responses framed the options using ranges so that the exact amount of the income needs not be disclosed (Neutens and Rubinson, 2010).

Questionnaire design

Majority of the researchers use close ended and structured questionnaires in order to conduct responses. The close-ended question requires the respondents to choose from among the possible set of answers that most closely represent the viewpoint of the respondent (Tashakkori and Teddlie, 2010). The close-ended questions offer answers and alternatives thereby reducing the time of survey and helping the respondents to easily connect to the research project. Thus, Oliver (2010) commented that the rates of rejection in case of close-ended questions are low. However, Portaluppi  et al. (2010) argued that the use of these structured questionnaires may restrict the flow of thought of the respondents and the results are not accurate since the answers prepared by the researcher will involve personal biasness.

In this research, the researcher has used the likert scale along with the close-ended questions in order to rate the answers of the respondents and facilitate easy completion of the project. Following are some of the close-ended questions of this project.

What is your present age?

Options	Responses
18 to 25 years
25 to 40 years
40 to 55 years
More than 55 years

What is your monthly income?

Options	Responses
Below £ 5000
£ 5000 to £ 8000
£ 8000 to £ 10000
£ 10000 to £ 13000
£ 13000 to £ 15000
£ 15000 and above

What are the probable causes for availing international expansion by Starbucks?

Options	Responses
Capture  a global target market
Increase revenue and market share
Avail economies of scale
Increase innovation in the coffee products
Competitive strike
Government obligations

To what extent do you agree that cultural diversities has affected the expansion policies at Starbucks?

Options	Responses
Agree
Strongly agree
Neutral
Disagree
Strongly disagree

How would you rate the globalization policy of Starbucks in UK?

Options	Responses
Poor
Fair
Good
Very Good
Excellent

To what extent are you satisfied with the present working culture at Starbucks UK after the adoption of the expansion strategies?

Options	Responses
Very satisfied
Satisfied
Neutral
Dissatisfied
Very Dissatisfied

The quantitative data majorly constitutes of the numerical evidence regarding the research project. Thus, the researchers need to employ different statistical methods in order to interpret the quantitative data and derive the required conclusion Johns and Jon (2004). The quantitative data may be interpreted with the help of spreadsheets and databases, statistical methods, sensitivity analysis and comparison of the datasets.

According to Marshall and  Rossman (2010) visual presentation of the quantitative data is useful for explaining the results of the reports to the users of the information. The common forms of data presentation are graphical representation, diagrams, maps and tabular presentation.

In this research, the researcher uses the simple SPSS software and MS Excel formulas in order to interpret the results of the primary quantitative data. In case of data presentation since the researcher has used likert and rating scales in responses hence the use of tabular representation for showing the response rates along with graphs and charts are helpful. The researcher has adopted the tabular presentation because it would make the cross-comparisons and analysis easier. In case of graphical representation, the use of Bar charts will specifically show the discreteness of the data making it easier for the researcher to analyze the data.

Porter’s Diamond Theory of national advantage

Sampling plan

According to Lindlof and Taylor (2010) in qualitative research methods, only a subset of a target population is selected for obtaining the responses. Majorly three types of sampling methods are used namely purposive sampling, quota sampling and non-probability sampling. The researcher here has used the non-probability sampling method and selected store managers for interviewing about the factors influencing the globalization strategies of Starbucks. Responses related to recommendations also were fetched from the store managers since they are directly related to the internal affairs of Starbucks.

In case of the qualitative research, technique the researcher used the recruitment strategy before selection of the store managers of Starbucks. The recruitment strategy included the following parameters namely:

Manager within the age between 30 years and above

Designations of store manager, floor manager, systems manager, administrative manager, marketing manager

Experience in Starbucks for more than 2 years

Transferred to UK stores (Non-native of UK)

The researcher keeping in mind the responses that the researcher required framed the recruitment strategy so that the managerial staffs transferred to UK branches should be able to give responses in relation to the effects of globalization and to the factors responsible for the globalization of Starbucks. In case of qualitative research, the researcher also used the incentive strategy. Gill and Johnson (2010) commented that the incentive strategy is helpful for obtaining the responses of the different top-level respondents.

The targeted sample size of the researcher was 10 store managers however for the lack of support and inconvenience in accessing the interview permission the researcher was successful in obtaining interviews of only five store managers.

Method of data collection

According to Bryman (2012) qualitative data collection, methods are time consuming and expensive hence a small sample size is used for the collection of the data. Major methods of qualitative data collection are namely focus group interviews, observations, action research and in-depth interviews. The qualitative data collected is also a part of the primary data. However, the qualitative data involves collection of broad opinions of the respondents. Thus, the researchers generally use either face-to face interviews or observation methods in order to collect qualitative data. In case of the face-to face interviews, the use of semi-structured questionnaire and open-ended questions helps the researcher to effectively record the opinions of the respondents.

The researcher in this project has taken the help of in-depth interviewing technique in order to gain insight and understanding into the potential challenges that Starbucks is facing in context of its global expansion policy. Since the sample respondents concerned the managers of Starbucks of different designations, hence the researcher was not able to conduct a focus group interview. The researcher had to make prior appointments over the phone to schedule the in-depth interview. Similarly, observational methods are also not useful in this research context.

Since the researcher needs to evaluate the success rate of the current expansion, strategy of Starbucks hence the use of open-ended questions has helped the researcher to collect unlimited number of probable answers. Moreover, Silverman (2010) argued that unlike the close-ended questions where the given alternatives are limited as per the knowledge of the researcher, using open-ended questions gives opportunity to discover unanticipated findings. Further, in order to obtain the recommendations concerned with the expansion strategies of Starbucks, the researcher required using semi structured and open-ended questions that permitted the respondents to show their creativity, self-expression and richness in detail.

Aims and objective

Banister et al. (2011) opined that qualitative data emphasizes on the meanings, experiences and views of the respondents. Thus, the questions framed for a qualitative analysis are broad, flexible and conceptual. The questions framed thus should produce a scope of interactive interview session between the researcher and the respondent in order to generate views. The researcher has used the case study research design in order to analyze the impact of globalization on Starbucks.

Following are the qualitative open-ended questions used by the researcher for the managers.

How has the working environment changed I Starbucks due to consistent international expansion?

What are the major hurdles that you are facing in Starbucks due to its internationalization policy?

What according to you are the potential problems that Starbucks may face in further global expansion?

What are the probable suggestions that you would like to give to the management of Starbucks in relation to future expansion strategies?

From the questions framed by the researcher in this project it can be concluded that the researcher has used ideal questions for obtaining recommendations, leading questions for obtaining problems in globalization and direct questions for factors and need for globalization.

The major issues that a researcher supposedly faces in case of qualitative data collection are namely the social desirability biasness, high refusal rates and issues with literacy of the respondents (Silverman, 2010). In this research, however the researcher had the provisions of facing two of the data collection issues namely social desirability bias and high refusal rates. Since the interviews were to be conducted with high-level professionals at the senior posts in Starbucks, hence the issue relating to literacy of the respondents were not present. In order to avoid the refusal rates and social desirability biasness the researcher framed the open-ended questions very carefully. The researcher has used indirect questions in order to avoid the social desirability biasness. However, in case of recruitment questionnaires, the researcher required the personal data like names, designation, work experience with Starbucks and age of the respondent.  It is forecasted by the researcher that majority of the respondents will avoid answering the questions related to these personal information. Hence, the researcher has included a note on code of ethics at the beginning of the questionnaire mentioning the guidelines of Data Protection Act in order to ensure the safety of the personal data of the respondents.

According to Bryman (2012) the four major types of qualitative data are namely structured text, unstructured text, audio recordings and video recordings. The researcher here has recorded unstructured text data from the interview responses. For the purpose of data presentation, the researcher has adopted the preparation of transcripts. During the preparation of transcripts, the researcher had to carefully record the non verbal expressions along with the verbal opinions of the respondents. The researcher can also effectively maintain a researcher diary, self-memo and summaries of the observation points in order to record the important details during the in-depth interviews. According to Neutens and Rubinson (2010) the following steps should be undertaken by the researcher in order to organize and present the qualitative data.

Transcribe the data

Translate the data

Data cleaning procedure

Labeling the data

Coding the data

For the purpose of data analysis, the researcher will undertake any of the following common analysis techniques namely content analysis, narrative analysis, discourse analysis, framework analysis and grounded theory. In this research in order to create an argumentative result, the researcher will use discourse analysis techniques in order to analyze the qualitative data.

During the research, the researcher needs to abide by a code of conduct that provides regulations for right and wrong set of behaviors on the part of the researcher as well as the respondents (Bernard, 2011). In this research, the researcher adopted the following ethical considerations.

Data Protection: As per the Data Protection Act 1998, the researcher had to confirm during the primary data collection that the researcher will not use the internal data of Starbucks for any commercial purpose and the data will be primarily used for academic purposes only.

Voluntary participation: The researcher also had to ensure that the respondents participated voluntarily in the research project. The researcher’s behavior towards the responses needed to be unbiased and non-influence. Thus, any kind of coercion and force was avoided during the research project (Speziale et al. 2011).

Respondent’s anonymity:  Again as per the Data Protection Act, the researcher also needs to confirm that the secrecy of the personal data like name, designation, phone number and email id of the respondents will be maintained and used exclusively for academic purposes. It is ensured that any form of mental or physical harassment was not involved with the respondents in the course of research work.

The researcher faced limitations in acquiring reliable primary data from the respondents. Since the employees of Starbucks were interviewed hence there may be instances of biasness over the responses relating to internationalization of Starbucks. Moreover, being a student the researcher was not able to interview the senior management level of Starbucks in order to get in-depth information on the international challenges of the company. Apart from these, the researcher also faced time constraint and financial constraint in completion of the research project. The research was completed within a short span of time with a very small sample size because the researcher had less time and low budget for making in-depth analysis (Bernard, 2011).

The researcher has used the Gantt chart in order to plan and schedule each stage of the research project separately. Tashakkori and Teddlie (2010) suggested that Gantt charts help the researcher to assess the duration and determine the resources required for completion of the research project.

Major stages	Week 1	Week 2	Week 3	Week 4	Week 5	Week 6	Week 7
Research topic selection	ü
Academic research on the selected topic	§
Setting of research design
Literature review completion
Formation of the research Plan
Secondary data collection
Primary data collection
Analysis & Interpretation of Data Collection
Recording of Findings of the Data
Conclusion  and recommendation framing
Formation of Rough Draft
Submission of Final Work

The research proposal highlights the issue concerning which the researcher has selected the topic. The researcher has highlighted the research objectives suggesting that the researcher plans to investigate into the globalization methods and advantages and disadvantages of Globalization in the context of Starbucks. Further, the proposal clearly states the sampling plan, sample size, data collection methods and data presentation methods in case of both quantitative and qualitative research undertaken by the researcher for the completion of the project. Finally, the researcher points out the ethical issues and the limitations involved within the research project thereby concluding with the presentation of the scheduled period of research project.

Reference list

Akerman, A. (2010). A theory on the role of wholesalers in international trade based on economies of scope. Research Papers in Economics, 1.

Bajona, C., and  Kehoe, T. J. (2010). Trade, growth, and convergence in a dynamic Heckscher–Ohlin model. Review of Economic Dynamics, 13(3), 487-513.

Banister, P., Bunn, G., Burman, E., and Daniels, J. (2011). Qualitative Methods In Psychology: A Research Guide: A Research Guide. McGraw-Hill International.

Baylis, J., Smith, S., and Owens, P. (Eds.). (2013). The globalization of world politics: an introduction to international relations. Oxford University Press.

Bernard, H. R. (2011). Research methods in anthropology: Qualitative and quantitative approaches. Rowman Altamira.

Bryman, A. (2012). Social research methods. Oxford university press.

Carté, P.  and Fox, C. (2008) Bridging the Culture Gap: A Practical Guide to International Business Communication. 2nd ed. London, Kogan Page

De Mooij, M. (2010). Consumer behavior and culture: Consequences for global marketing and advertising. Sage.

De Vos, A. S., Delport, C. S. L., Fouché, C. B., and Strydom, H. (2011).Research at grass roots: A primer for the social science and human professions. Van Schaik Publishers.

Gill, J., and Johnson, P. (2010). Research methods for managers. Sage.

Gubbi, S. R., Aulakh, P. S., Ray, S., Sarkar, M. B., and  Chittoor, R. (2010). Do international acquisitions by emerging-economy firms create shareholder value? The case of Indian firms. Journal of International Business Studies, 41(3), 397-418.

Hofstede, G. (1983) The cultural relativity of organizational practices and theories. Journal of International Business Studies. 14(2), pp. 75-89

Hutzschenreuter, T., Voll, J. C., and Verbeke, A. (2011). The impact of added cultural distance and cultural diversity on international expansion patterns: A Penrosean perspective. Journal of Management Studies, 48(2), 305-329.

Johns, M. D., and Jon, H. G. (2004). Online Social Research: methods, issues & ethics.

Kuemmerle, W. (2012). The entrepreneur’s path to global expansion. Image.

Leidner, D. E. (2010). Globalization, culture, and information: Towards global knowledge transparency. The Journal of Strategic Information Systems, 19(2), 69-77.

Lichong, W. (2010). The Review of Theories and Methods on Knowledge Quantitative Evaluation [J]. Science & Technology Progress and Policy, 3, 043.

Lindlof, T. R., and Taylor, B. C. (2010). Qualitative communication research methods. Sage.

Marshall, C., and  Rossman, G. B. (2010). Designing qualitative research. Sage publications.

Neutens, J. J., and Rubinson, L. (2010). Research techniques for the health sciences. Benjamin-Cummings Publishing Company.

Oliver, P. (2010). The student’s guide to research ethics. McGraw-Hill International.

Parrish, P., and Linder-VanBerschot, J. (2010). Cultural dimensions of learning: Addressing the challenges of multicultural instruction. The International Review of Research in Open and Distributed Learning, 11(2), 1-19.

Portaluppi, F., Smolensky, M. H., and Touitou, Y. (2010). Ethics and methods for biological rhythm research on animals and human beings. Chronobiology international, 27(9-10), 1911-1929.

Ramamurti, R. (2012). What is really different about emerging market multinationals?. Global Strategy Journal, 2(1), 41-47.

Silverman, D. (Ed.). (2010). Qualitative research. Sage.

Speziale, H. S., Streubert, H. J., and Carpenter, D. R. (2011). Qualitative research in nursing: Advancing the humanistic imperative. Lippincott Williams & Wilkins.

Steger, M. B. (2010). Globalization. John Wiley & Sons, Ltd.

Suranovic, S. M. (2010). International trade: Theory and policy. Flat World Knowledge, Incorporated.

Tashakkori, A., and Teddlie, C. (Eds.). (2010). Sage handbook of mixed methods in social & behavioral research. Sage.

Waltz, K. N. (2010). Theory of international politics. Waveland Press.

Yeniyurt, S., and Townsend, J. D. (2003). Does culture explain acceptance of new products in a country? An empirical investigation. International Marketing Review, 20(4), 377-396.

Yue-jun, H. U. A. N. G., and Hao-cui, L. I. A. N. G. (2012). Quantitative Analysis of the Influencing Factors of Secondary School Students’ Solutions to Traditional Mathematic Application Problems in Rural Areas——Based on the Investigation of” Foundation” and” Innovation. Journal of Mathematics Education, 5, 010.