Cultural intelligence and competence are knowledge about cultural differences and their support. The leader is required to understand the peculiarities of national cultures, be able to establish communication with representatives of other cultures, and apply knowledge about cultures in work. The practical result of global leadership effectiveness can be discussed in the example of Starbucks’ entry into the Indian market. Starbucks announced a partnership with the Indian company Tata Global Beverages. The company has been expected to be successful if the leadership considers all culturally relevant characteristics.
India is a country with mixed cultures; according to GLOBE, it is a part of the southern Asia cluster. However, even though the country shares several cultural features with its neighbor – China, it has unique characteristics due to British colonialism (Tuleja, 2017). Therefore, there are distinct differences between the United States, the United Kingdom, China, and India, which should be considered while entering the Indian retail coffee market (Tuleja, 2017). Regarding India’s closest neighbor China, tea culture is prevailing, emphasizing tea ceremony (Tuleja, 2017). It is similar to the Indian population, which tends to drink tea instead of other beverages. However, the increasing coffee consumption in youth is recognized; coffee shops serve as a social hub for young people.
Concerning power distance, the US and UK have similar scores and the same attitudes towards individualism, uncertainty avoidance, and long-term orientation. Thus, these states are individualistic cultures accompanied by performance orientation and a low level of group collectivism. On the contrary, China is mainly team-oriented with a high power-distance score and hierarchy (Tuleja, 2017).
India is related to Chinese culture in terms of these characteristics. The score of individualism is the average of the UK and China, which amounted to 48 (Tuleja, 2017). Moreover, Indian people chow their emotions in the business environment. There is cooperation rather than competition in the industry (Tuleja, 2017). Consequently, India cannot be recognized as a culture with the same characteristics as the US and the UK.
Concerning leadership traits and style, the most effective approach for managers is to be collaborative and human-oriented. Global leaders should have valuable skills such as empathy and understanding (Heidrick & Struggles, 2015). For international managers, it is crucial to review various perceptions; different stories empower and humanize, while a single narrative can create the wrong attitude towards other cultures (Adichie, 2009). According to Tuleja (2017), leaders in the South-Asia region must adhere to a self-protective style, focusing on the leader’s safety and the group as a whole. Additionally, it is recommended to be inspirational; consequently, charismatic and value-based leadership would also be valid.
India is a highly hierarchical society affecting the management style of Indian organizations and companies. For both levels of leadership, company employees do not doubt the fact that there should be strong management. A manager’s position requires the performance of a particular role as a head who expects the unquestioning obedience of subordinates. Anglo-Saxon traditions based on egalitarianism are unacceptable in a society whose members are deeply rooted in the idea of ​​caste, historically inherent in India.
In the US and the UK, the principal idea of ​​a coffee shop is the so-called third place between work and home. It is not customary in the US to stay in a cafe for a long time; it benefits the economic performance as the customer turnover is relatively high. Contrasting to Starbucks in China, it focuses on indoor comfort rather than a take-out format. In China, the targeted population is the youth; for a long time, coffee shop has been associated with wealth (Tuleja, 2017). For instance, only the upper class could afford coffee daily. Starbucks coffee is viewed as a status symbol in the eyes of the Chinese (Tuleja, 2017). It is a product that demonstrates the sophistication and capabilities of the middle-class consumer in China. Therefore, these days, Starbucks has become a permanent meeting place among Chinese business people and executives of large companies and a favorite meeting place for friends.
Concerning the Indian customer experience, there is no culture of social use of alcohol. Hence, Starbucks may become a preferable place for meeting up for a drink (Gupta et al., 2018). Considering that about half of Indians are at the age of 25, it also can be perceived as a romantic place (Tuleja, 2017). As having a girlfriend or boyfriend at a young age is not welcomed by the older population, the coffee shop is a solution for a date.
Starbucks’ entry into the Indian market should remain in charge of Starbucks Coffee China and the Asia Pacific segment. India has a wide variety of cultural traditions and customs that influence business models and styles (Gupta et al., 2018). The culture is the result of a thousand-year history of Hinduism, Islamic traditions, British domination, and, in recent decades, Western business concepts (Gupta et al., 2018). Nevertheless, the best solution would be to locate the Indian division in the Asian department. Even though it has a particular impact on Britain’s colonization, the culture tends to be more Asian than European.
A global manager is a specialist whose functions include developing a strategy, planning, and coordinating a company’s transactions outside the country. Its main goal is to achieve the company’s competitiveness on a global scale. In Asian countries, the cross-cultural differences in the business environment are significant. Thus, leaders should analyze their own cultures at the initial state to understand the differences and similarities with other cultures. It is reflected in the case of Starbucks and its entry into the Indian Market. The deliberate examination of whether India’s culture is closer to its Asian neighbors rather than Britain has resulted in more successful interactions.
References
Adichie, CN (2009). The danger of a single story [Video]. TED. Web.
Gupta, P., Nagpal, A., & Malik, D. (2018). Starbucks: Global brand in emerging markets. Emerald Emerging Markets Case Studies, 8(4), 1-22. Web.
Heidrick & Struggles. (2015). LeadershipTV® – What Makes a Global Leader? [Video]. YouTube. Web.
Tuleja, E. A. (2017). Intercultural Communication for Global Business: How leaders communicate for success. Routledge.