CROSS CULTURE

MANAGEMENT
Assignment-1

JANUARY 8, 2020
CH.SAI VARUN
191146- SEC:C
 STARBUCK’S IN ITALY
It is a well-known fact that the Italians love their coffees. They have
also invented a coffee culture that is unparalleled to any other place in the
world. Italians are certainly passionate about coffee -- consuming 4.6% of
the world's supply. For Italians the cup of coffee is an absolute ritual and
an established habit, something that builds ties and social relations.
Italians, however, maintain the ritual of the “cup of coffee” at home
as well and you may have noticed the convivial habit to invite someone to
“have a coffee”. The coffee at home certainly won’t be the American type,
served in a mug, but will be made with a mocha,
The company debuted its first Italian location in Milan in September,
a high-end Starbucks Reserve Roastery.
While the Seattle-based chain (Starbucks) has achieved near-
omnipresence in other European countries, Italy’s intense coffee culture
is a tougher barrier to break.
Challenges Starbucks faced In Italy:

1)ITALIANS mostly caffeinate at home: 75% of the coffee consumed by

Italians was drunk at home, but they don't enjoy it the
way Starbucks serves it They also favour making coffee at home, and
when they do go out for it, they drink espresso shots and inexpensive
cappuccinos while standing at the bar.

2)ITALIANS don't like chain cafes: like most of U.S consumers ITALIANS
don’t like to go chain cafes as they don’t believe in chain cafes but believe
in individual stores as there were cheap when compared to chain cafes,

3)ITALIANS really don't like foreign brands: This lack of international

players in Italy was due to the strong Italian tradition and customs in food.
Lavazza, an Italian brand, dominates coffee sales with a 36.9% market
share in ITALY

4)Italians value experience in their BARISTA (a person who serves in a

coffee bar): Starbucks is famous for supporting its employees and paying
for tuition to help them get online degrees. the average Italian age barista
is 48 years old, and that crafting espresso is a valued profession in Italy.

5)They don't pay Starbucks prices: It is not common for Italian business
consumers to sit in a coffee shop and work on the laptop or meet in a
public space. The most common drink expresso is very much cheaper in
local brands than compared to Starbucks.
 Is world flat?
It all started with globalization
❖ Globalization 1.0
❖ Globalization 2.0
❖ Globalization.3.0
GLOBALIZATION 1.0
Started: 1492 with discovering America by COLUMBUS
ENDED: 1800
Player: country
GLOBALIZATION 2.0
Started: 1800
Interrupted by world war-1, great depression, world war-2
Ended:2000
Player: multinational company
GLOBALIZATION 3.0
Started:2000
Player: individual

The Ten Flatteners (Flat = Connected)

1. COLLAPSE OF THE BERLIN WALL:
❖ No more communism
❖ Free market
❖ democracy
2. NETSCAPE-
❖ PC
❖ WWW
❖ INTERNET
3. WORKFLOW SOFTWARE:
❖ WORKING TOGETHER
❖ Different hardware& different location
❖ Web technology (HTML, HTTP, LOTUS)
4. UPLOADING:
❖ COMMUNITY DEVELOPED
❖ CONNECTING INDIVIDUALS
❖ BLOGGING & WIKIPEDIA

5. OUTSOURCING: Y2K
❖ Split: service & manufacturing
❖ Performance: most efficient & cost effective
6. OFFSHORING: CHINA
7. SUPPLY-CHAINING: WALMART

8. INSOURING: UPS & TOSHIBA

9. IN-FORMING: GOOGLE & YAHOO
❖ Information finding
❖ Search engine
10. THE STEROIDS: Facebook, WhatsApp, Instagram
❖ Computing
❖ Instant messaging
❖ Video conferences
❖ Computer graphics

“Yes, I accept the world is flat” by THOMAS L. FRIEDMAN that analyses

globalization, primarily in the early 21st century but considering there
are still some countries which are not free & and some countries which
are not effectively using flatteners.
The list of countries that do not have freedom of the press includes:

1. Belarus
2. Burma
3. China
4. Cuba
5. Egypt
6. Iran
7. North Korea
8. Saudi Arabia
9. Syria

North Korea is still under dictatorship. I would not say that the world
is not connected but to broaden I would say there is still time that
world need to be flattened completely.
 3)Between India and China
Cultural Similarities
❖ Both are more family oriented as compared to western societies.
❖ Both the countries are very religious.
❖ Both give extreme value to education. They drive students crazy
with exams just like India.
❖ Majority of both the populations want a male child. China obviously
because of the one child policy while India generally.
❖ Both societies are obsessed with fair skin, big coloured eyes and
national language.
❖ Both countries give much value to their history.
❖ Both Indians and Chinese give respect to their elders as a custom.
❖ Both Indians and Chinese love meaningful, inspirational Bollywood
movies because they can easily relate to them.
❖ Both the countries have several dialects and languages in them
unlike the stereotype that Indians speak Hindi and Chinese
mandarin.
❖ The older generations in both the societies are more traditional
then their younger ones who are rapidly becoming more
westernized.
❖ Majority of people in both the countries aspire to study / visit / live
in a western country.
❖ Both the societies are very hospitable.
Cultural Differences:
1)RELIGION:
CHINA: TAOISM INDIA: HINDUISM
2)CULTURAL DIMENSION:
DIMENSION CHINA INDIA
Collectivism/individualism collectivism both
Uncertainty avoidance high low
Power distance medium high
Masculinity/femininity masculinity both
3)mode of thinking:
CHINA: holistic INDIA: analytical
4)mode of communication:
CHINA: silence is a sign of respect INDIA: Elaborative & Argumentative
5) context culture:
CHINA: low context culture INDIA: high context culture
 Infosys & Wipro
Why Wipro & Infosys are now hiring local talent in U.S?
Major companies in the US chose India to set up their workforces.
Apart from the IT talent pool that we have in India, location comes as a major
advantage. These US companies can have employees working for them
24×7 if they hire people from India, as the time lag fit perfectly. But now,
things are changing. More and more companies have started outsourcing
their work overseas.
The Indian IT juggernaut has slowed down due to reasons like
business requirements and geopolitical factors. Due to this, many Indian
firms find it important to set up many workforces abroad and hire teams for
their company with the residents there. There are several reasons revolving
around it.

Why Are Indian Companies Higher Overseas?

The Indian IT juggernaut has slowed down due to reasons like
business requirements and geopolitical factors. Due to this, many Indian
firms find it important to set up many workforces abroad and hire teams
for their company with the residents there. There are several reasons
revolving around it.

1.Immigration Issue:
Recent dawn of the anti-immigration and anti-outsourcing
policy in the US has created a huge pressure on Indian firms to hire the
local talent in the US.
The liberal visa norms which made an easy flow of talent from India
to client sites has also degraded. It then becomes important to hire the local
people overseas, to not face any loss with the loss of employees.
2.Localisation:
Business expansion is an important initiative for Indian IT firms
to make. In order to understand the business around the place, companies
must go and settle in foreign destinations. An industry like IT experiences
success in the technology-rich countries, whether the US or not. It then
encourages the firms to hire local talent. According to a news report, Wipro
had localised more than 50% of its talent in the US.
3.Skills like AI and analytics:
Fast-bussing and high in demand technical skills related to IT
like analysis and artificial intelligence, have a vast talent overseas, especially
in the US. Indian companies are in a constant need of these skills and it
becomes important to hire them.
4.Demand for local hires:
With Indian companies setting up abroad, they also face some
conservative customers who demand local talent hire in firms mostly
political. Last December (2018), Infosys opened its large centre in Hartford,
Connecticut, where it plans to hire some 1,000 US workers by 2022.

5.Economy Slowdown:
If the economies of the world are going to suddenly change in terms
of their performance, it will certainly have a bearing on enterprises and,
therefore, on technology companies.
Slowdown in US economy threatens TCS, Infosys, Wipro
•Concerns about a slowdown in US economy poses the
biggest risk to India’s $167 billion information technology
(IT) outsourcing industry as experts fear Fortune 1000
companies may cut spending on technology, hurting Tata
Consultancy Services Ltd (TCS), Infosys Ltd and Wipro Ltd.