Organization Culture, Strategy and Leadership

Organization Culture, Strategy and Leadership

Organization Culture, Strategy and Leadership Project – Strategy formulation is one of the responsibilities and roles of effective leadership (John & Allen 1998, p. 45). According to John & Allen (1998, p. 45-46), the perspective of strategy assumes assumptions of the task of leadership especially due the emphasis given to guiding, shaping and controlling the organization environment.

Effective strategy formulation is one of the essential elements of ensuring the business success. Failure by the business executives to exhibit effective strategy formulation could lead to the failure of the business. As such ensure effective strategy formulation within the organization requires the managers and the business executives to exhibit strong leadership skills. Strategy and leadership cannot be alienated as one influences the other (John & Allen 1998, p. 47).

A strategy is an action or a plan designed within the organization for the purpose of achieving an overall or a major goal. On the other hand, leadership can be described as the ability to influence others towards a particular direction within the organization (Pride, Hughes & Kapoor 2010, p. 201).

This paper will analyze Wal-Mart stores generic business strategy, organization culture and formal organization structure. Wal-Mart store is multinational retail store operating a chain of hypermarkets, grocery stores, and discount department stores.  Studies show Wal-Mart as the most profitable retail store in the world. Currently, Wal-Mart operates in 26 countries outside of the United States (Vosburgh 2011, p. 10).

Generic Business Strategy

A generic business strategy can be described as the strategy that is adopted by a business to gain a competitive edge over its competitors in the industry (Goldman & Nieuwenhuizen 2006, p. 22). Goldman & Nieuwenhuizen (2006, p. 23) argues that a generic business strategy is vital to the success of the business especially in a competitive industry.

Michel Porter designed three generic strategies that can be used by a business to gain a competitive advantage in the market. The porter’s generic strategy is used to describe how an organization can pursue a competitive edge within its market scope (Tanwar 2013, p.13). The modern business world is characterized by increased competition. As such to ensure business survival it is essential for the business to pursue activities that would give it a competitive advantage over the competitors within the industry.

Competitive advantage is the distinct feature of the business that gives it an edge over the competitors in the market. The more competitive business is, the better the chance for the business to survive in the current global market. According to Tanwar, R., 2013, p. 13-15) Porter identified three generic strategies which include cost leadership, differentiation, and focus. 

To ensure efficient utilization of organization resources, porter argues an organization must choose only one of the three strategies. The porter’s generic strategies show the relationship between the strategies of cost reduction, market focus, and the product differentiation.

In the argument of Porter, an industry has various segments that can be exploited by the organization.  To gain a competitive advantage over the rivals, a business is expected to make a choice about the kind of competitive advantage that it seeks and its scope.

The basic types of competitive advantage include product differentiation and lower cost. Making the choice on the appropriate strategy for the business requires proper leadership skills. Choosing an inappropriate strategy could lead to the loss of organization competitiveness within the industry. As such it is appropriate for the business to ensure enough resources are devoted to conducting research for the purpose of understanding the industry.

In the argument of Stankeviciute, Grunda & Bartkus 2012, p. 1201) Wal-Mart is ranked as one f the most successful retail store in the world. The company success largely is associated with its cost reduction strategies.  Wal-Mart stores operate in the retail sector that is largely characterized by huge competition not only from the large stores but also from small scale traders (Stankeviciute et al. 2012, p. 1202).

Stankeviciute et al. (2012, p. 1202-1204) further argue to survive in the retail industry and to ensure organization competitiveness an organization needs to establish itself as the cost leader. The Wal-Mart use of the cost leadership strategy and its integration with the porter’s five forces has provided the company a competitive advantage in the industry enabling the company to be ranked as one of the must successful retails stores.

The adoption of cost leadership strategy by Wal-Mart has to some extend acted as the price barrier within the industry thus reducing the number of competitors.  Wal-Mart has adopted various strategies to ensure the success of its core cost leadership strategy. Some of the strategies adopted by Wal-Mart to ensure cost reduction include the adoption of technology, elimination of stock holding costs and sourcing its products directly from the manufacturers’ thus eliminating wholesalers cost (Stankeviciute et al. 2012, p. 1203). 

In the argument of Stankeviciute et al. (2012, p. 1203-1205) Wal-Mart has also adopted waste reduction measures by investing in a stock management system that helps monitor stock levels in real time. The stock management system has been instrumental in minimizing waste costs. Wal-Mart adoption of cost leadership as its generic business strategy has enabled the company to achieve its low-cost price strategy.

Adopting a cost leadership strategy is essential to business since it enables a business to charge a relatively low price compared to the price of the competitors. Charging a low price can act as a barrier to entry of new competitors and can also drive away the existing competitors due to continued sustained loses. In the case for Wal-Mart cost leadership strategy has enabled the business to control a large market share in the industry and create a competitive advantage for the company.

To maximize its sales, Wal-Mart also discounts its products since it has a significant cost advantage over its rivals in the industry.  To ensure effective cost-leadership strategy a close cooperation between all the areas of the business is required. As such effective leadership is required in all the functional areas of the business (Stankeviciute et al. 2012, p. 1205).

Organization Culture

In the recent past, there has been a growing concern in the manner in which organizations conduct business. One of the components that have been identified as essential in growing the business is the organization culture. According to Schein (2010, p. 96), organization culture is the shared experiences, norms, and beliefs within the organization.

As a leadership concept, organization culture can influence the success or the failure of an organization. It is the responsibilities of the business leaders to impose the right culture in the organization. In the argument of Schein (2010, p. 97) organization culture is influenced by various factors. One of the factors influencing organization culture is leadership.

To a large extent, organization culture is influenced by the business leadership. The attitude of the business leaders can determine whether the business will succeed or fail. As such leader’s attitude could form the basis of the organization culture. Often employees within the organization look up to their leaders for direction and guidance.

Therefore, the way the leaders interact with their employees and solve the day-to-day challenges forms a basis of the organization culture (Sadri& Lees 2001, p. 854). The organization culture is also likely to be created by what leaders reward and punish, pay attention to and allocate resources.

According to Sadri & Lees (2001, p. 854), the organization culture influences the organization strategy. An organization is more likely to be successful if the organization culture has a close relation with the business strategy. The business leaders should thus ensure that the organization has the right culture that supports the business strategy. The organization culture influences the manner in which things are done in the organization. Organizational culture is, therefore, central to the operations of the business and its success (Klein 2011, p.23).

The success of Wal-Mart has been attributed to the organization culture. Wal-Mart has been described as having a strong and pervasive culture that gives the company a competitive advantage in the market.  The culture of Wal-Mart is attributed to have been formed by the founder Sam Walton.

Wal-Mart has managed to retain its organization culture elements since it started operating. The organization culture of Wal-Mart is created around the brand and the image of the company. According to Klein (2011, p.24), the organization culture of the organization can be assessed by having an understanding of its behaviors and artifacts, shared perspectives, awareness and the unconscious assumptions of the business. 

Studies indicate that the organization culture has an influence on the performance of the organization (Davies 2007, p.6). It is therefore highly likely that successful businesses are supported by a strong organization culture.  Various studies conducted on Wal-Mart stores indicate that the company has a strong organization culture which is the driving force of its success. The organization culture of Wal-Mart has contributed to the company recognition by both the insiders and the outsiders of the company (Jacques, et al. 2003, p. 514).

According to Davies (2007, p.9-14) Wal-Mart organization culture is characterized by; first, strong leadership- Wal-Mart has adopted both the transformational and the transactional leadership styles. The transformational leadership is described as the type of leadership that changes the life of the community and people in the area in which the leader operates.

Transformational leadership has been at the center of Wal-Mart. Wal-Mart has been able to change the life of the people and society within its area of operation through its various corporate social activities as well as its low pricing strategy. On the other hand, transactional leadership has given the company vision and strategy.

Transactional leadership is the type of leadership that is responsible for the strategy execution and the daily running of the business operations. Second, low price products- Wal-Mart culture has been formed around offering low price products since the inception of the company. The low-price strategy has given the company a competitive edge in the industry, which makes it the largest retailer store in the world (Schneider 1998, p.295).

Over the years despite the worsening economic situations Wal-Mart has offered its customers low price products in line with its culture. Its low pricing strategy has contributed to the company recognition around the world. The low-price culture has also contributed to the organization effectiveness and efficiency as it aims to lower the cost of its operations so as to continue providing its customers with low price products.

Third, innovation- Wal-Mart has been at the center of innovation over the years (Schneider 1998, p.296). The company innovative strategies have enabled the company to continue providing high-quality, low-priced products. In line with its innovative culture, Wal-Mart continues to adopt the use of new technology in its business. Recently the company adopted the use of stock management system.

The company has also adopted technology in communication with the aim of reducing its cost. Fourth, entrepreneurship and risk taking- over the year’s Wal-Mart has ventured into business and markets that would be considered risky. The continued venture in different countries shows the entrepreneurial spirit of the company.

The entrepreneurship has been part of the Wal-Mart culture since the inception of the company as the company has since been expanding its areas of operations and market. In the current global market, organization entrepreneurship is an essential skill in ensuring the organization competitiveness and retention of its current market share.

Organization Culture Strategy and Leadership Project
Organization Culture, Strategy and Leadership Project

Failure of the business leaders to understand the value of corporate entrepreneurship and engage in it could lead to the organization loss of market share and competitiveness. As such where the entrepreneurship is part of the organization culture it is highly likely that the business will be a success, as a case for Wal-Mart. Fifth, customer relations- another important element of the Wal-Mart organization culture is its customer relations. Wal-Mart strives to ensure customers satisfaction in its operations.

The Wal-Mart customer relations have been an essential element in creating customer loyalty. Customer loyalty is essential as it ensures the company can retain its market share and attract new customers as well. Sixth, outcome orientation- as part of Wal-Mart culture, employees are encouraged to achieve the desired outcome. As a way of motivating the employees to achieve their targets, employees are often involved in setting the company goals.

This culture has enabled the company not only to meet the target but also supersede these targets. Employee participation creating a sense of belonging in the company thus increases their productivity (Schneider 1998, p.296). Wal-Mart could thus be argued to have a strong organization culture which has been instrumental in its success.

Formal Organization Structure

The formal organization structure of the organization defines the activities such as supervision, coordination and task allocation to different officers of the organization. The organization structure is important in allocating responsibilities and enhancing accountability in the organization. The organization structure as acts a control procedure in the organization and helps reduce possible conflicts. 

According to Rosen (2004), Wal-Mart has adopted a hierarchical functional organizational structure. The organization structure of Wal-Mart hence has two feature; hierarchy and function-based. As such Wal-Mart has adopted a hybrid organizational structure. The adoption of a hybrid organization structure has some of the following benefits to the company, shared vision and mission, improved interactions among departments, speed in decision implementation, minimizes complexity and flexibility.

The Wal-Mart organization structure defines the business operations of the company. The organization structure also does define the relationship of the different officers and departments within the company as well as defining the duties and responsibilities of the company officers. As such the Wal-Mart organization structure is instrumental in creating the formal company culture. The Wal-Mart organization structure also defines the limitations of how the organization would address a particular issue (Rosen 2004).

Formal organization culture is essential in the day-to-day operations of the business as it creates a way of addressing the daily operations and how people respond to daily challenges an interact. The formal organization culture of Wal-Mart has impacted on the success of the company by ensuring different departments work in harmony and with minimal conflicts. It has also been instrumental in ensuring that different employees at various levels of the organization are accountable for their actions. Where employees are made accountable for their actions, it is highly likely they will be more productive and efficient. 

A strong formal organization culture could contribute to the organization competitiveness in the industry. As such the organizational structure adopted by Wal-Mart has been influential in the success of the company by not only defining roles and responsibilities but also creating the formal culture of the organization (Rosen 2004).


The current global market is quite competitive and as such the success of the organization will largely depend on effective strategy formulation and effective leadership. The ability of the organization to choose an appropriate generic business strategy would prove to be the point of difference between different players in the market.

The generic business strategy adopted by the organization determines the direction of the organization as well as its ability to effectively compete in the market. The businesses executives have the responsibility to integrate the generic business strategy with the organization culture as well as the formal organization structure.

Integration of the generic business strategy with the organization culture and structure creates an enabling environment for the organization to achieve its goals. The business leaders should ensure the adoption of the appropriate culture within the organization that can support the business strategies as well as the organization structure.


Davies, D.J., 2007. Wal-Mao: The discipline of corporate culture and studying success at Wal-Mart China. China Journal, (58), p.1-27.

Goldman, G., & Nieuwenhuizen, C. (2006). Strategy: sustaining competitive advantage in a globalised context. Cape Town, Juta.

Jacques, P. et al., 2003. Wal-Mart or World-Mart? A Teaching Case Study. Review of Radical Political Economics, 35(4), p.513-533. 

John, R., & Allen, M. (1998). Global business strategy. London [u.a.], Thomson.

Klein, A., 2011. Corporate culture: its value as a resource for competitive advantage. Journal of Business Strategy, 32(2), p.21-28.

Pride, W. M., Hughes, R. J., & Kapoor, J. R. (2010).Business. Australia, South-Western/Cengage Learning.

Rosen, E.I., 2004. The Quality of Work at Wal-Mart.Conference on Wal-Mart: Template for 21st Century Capitalism.

Sadri, G. & Lees, B., 2001. Developing corporate culture as a competitive advantage. Journal of Management Development, 20(10), p.853-859.

Schein, E. H. (2010). Organizational culture and leadership. San Francisco, Jossey-Bass.

Schneider, M.J., 1998. The Wal-Mart Annual Meeting : From Small-Town America to a Global Corporate Culture.Human Organization, 57(3), p.292-299.

Stankeviciute, E., Grunda, R. & Bartkus, E.V., 2012. Pursuing a Cost Leadership Strategy and Business Sustainability Objectives: Wal-Mart Case Study. Economics and Management, 17(3), p.1200-1206.

Tanwar, R., 2013. Porter’s Generic Competitive Strategies.Journal of Business and Management, 15(1), p.11-17. 

Vosburgh, R., 2011. WAL-MART STORES. Supermarket News, p.10.

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Ethical Decision Making In Business

Ethical Decision Making In Business

Ethical Decision Making In Business – The daily running of a business entails various ethical issues and considerations.  Every business organization must understand different business ethics and ethical approaches to make rational decisions in diverse situations. This paper explores business ethics and values by considering three scenarios where ethical dilemmas exist, with the situations calling for ethical decision making.

In the first instance, the manager is forced to fire 500 employees to save the business, which employs over 100,000 people, from bankruptcy. The manager employs the five ethical approaches, which include utilitarian, rights, common good, fairness and justice, and virtue approach. In the NHS case study, the institute must decide whether to approve beta interferon drug based on its proved clinical efficacy only or to consider its cost effectiveness since the drug costs up to £10,000 per patient per year.

Finally, BDL Company has a policy of not hiring people over 50 years old as it considers young people to be more productive since ageing is known to diminish a person’s cognitive functioning, especially in speed. However, this policy is challenge by the provisions of the Age Discrimination in Employment Act, which prohibits employers from practicing age-related discrimination. The three scenarios exhibit challenging ethical dilemmas that require a careful application of ethical approaches and theories.

Ethical Decision Making Considerations and Values

There are various ethical considerations and values that impact the daily running of a business.  As a result, it is important for organizations to understand different business ethics and ethical approaches to make rational decisions in diverse situations.

For instance, the manager in the first case below is required to fire 500 employees to save the business that employs over 100,000 people from bankruptcy. In the process, the management has to consider such issues as acting for the common good, which means firing the few to save the majority while still observing their rights to truth, justice, and fairness.

In the NHS case study, the body must decide whether to approve beta interferon drug based on its proved clinical efficacy only or to consider its cost effectiveness since the drug costs up to £10,000 per patient per year. Finally, BDL Company does not hire people over 50 years old since ageing has been shown to significantly reduce performance in cognitive tasks. However, the Age Discrimination in Employment Act prohibits employers from practicing age-related discrimination, which makes the firm appear to be acting against the law.

Firing Some Employees to Save Company from Bankruptcy

The manager’s actions can be explained using the five approaches to ethical decision making, which are utilitarian, rights, fairness and justice, common good, and virtue approaches. To begin with, the utilitarian approach requires that an ethical action should be the one that promotes the greatest good and least harm to the affected parties (Velasquez et al.).

In the scenario under analysis, firing the 500 employees to save the company can be seen as ethical since the collapse of the firm would harm over 100,000 employees, the business owners, the suppliers, and other stakeholders.

Additionally, the manager applies the rights approach in dealing with the fired workers. The approach states that people have the right to truth, privacy, not to be harmed, and self determination among others (Velasquez et al.). By informing them on time and writing them recommendation letters, the manager ensures that the rights of the employees are respected.

The fairness and justice approach might be challenging to determine in this situation since the criteria used to decide the employees to fire is not explained, thus making it hard to determine whether discrimination or favoritism are used. However, the common good approach is evident since retrenching the 500 helps save the firm and the many people depending on its survival.

The principle dictates that ethical actions are those that promote the welfare of everyone, and the manager not only safeguard the interests of the organization but also of the fired employees (Velasquez et al.).

Finally, the manager applies the virtue approach in his dealing with the retrenched staff. Virtue model demands that one acts according to certain ideals, such as compassion, love, honesty, fairness, and integrity among others (Velasquez et al.). The manager not only explains apologetically the reasons for the firing, but he also writes recommendation letters to the affected workers to assist them in finding new jobs.

These approaches have contributed differently to the organization’s overall benefits. For instance, the utilitarian approach has a considerably high impact on the firm’s survival since it directly supports the downsizing of the labor force. Secondly, the common good approach considers the actions that most benefit the larger community and, thus, supports the firing of some to save the majority from negative effects of a collapsed firm.

Moreover, the rights approach benefits both the organization and the dismissed employees. Whereas the workers have the right as humans to be treated as ends and not means, the company also retains its right as an entity to either hire or fire depending on prevailing situations. However, fairness and justice approach seems to be more beneficial to the employees; if the company acted fairly in choosing the workers to discharge, the main effects would be on the employees by shielding them from unfair dismissal.

Similarly, virtue approach seems to be applied by the manager to safeguard the interests of the employees more than those of the company. Nevertheless, even the approaches that seem to benefit the workers more than the firm are still significant for the organization, By making the former feel contented with the decision, the company avoids negative outcomes such as lawsuits.

Clinical and Cost Effectiveness in New Drug Approval

In reference to the case study, the NHS approval of a new drug should be based on both its clinical and cost effectiveness. For instance, whereas the new multiple sclerosis drug – beta interferon – has demonstrated effectiveness in alleviating the effects of the disease, it is significantly costly at £10,000 per person per year (Fisher and Lovell 64).

Cohen and Reynolds define cost effectiveness as the value of a new medication in regard to the increased health benefits it brings in comparison to the increase in cost (2119). The purpose of cost effective analysis is to promote rational decision making for both the clinicians and policymakers. Without this practice, any new drug that proves to be effective in causing the intended outcome would be approved even if its cost were far too high when balanced against the supposed benefits.

Therefore, the National Institute for Clinical Excellence (NICE) is right in prioritizing cost effectiveness and the creation of an economic model that will enable the relevant parties to understand the costs and benefits of the medication (Fisher and Lovell 64). Although the need to have the treatment is so crucial for the MS patients, it is equally important for the relevant agencies to make the analysis to understand fully how much the drug will benefit them clinically and the costs involved.

The cost effectiveness criterion for approving the new drug focuses on consequentialism approach to ethical decision making. Consequentialist or teleological ethics are based on the assumption that the consequences of an action determine whether it is good or bad (Fisher and Lovell 124). Therefore, decisions that lead to good outcomes are to be considered ethical.

In the case study, approving the new drug for free availability on the NHS without considering its cost effectiveness would have some considerable consequences. If the drug’s high cost is not proportional to the benefits to the patients, the users would run the risk of paying so heavily for less significant clinical benefits. The chief executive of NICE emphasizes the critical importance of evidence-based guidance in regard to the medicine’s cost effectiveness and considers delay in approving it to be in the best interest of MS patients (Fisher and Lovell 65).

In doing so, the institute appears to be considering the consequences of the final decision to the patients of MS who must bear the high costs of the new drug. Therefore, the use of cost effectiveness as a criterion by the NHS for the approval of new drugs is based on the consequentialist approach.

The delay by the NHS to give its final decision concerning the approval of beta interferon demonstrates an issue of ethical decision making. The ethical issue arises from the consideration that the drug has been shown to be effective in controlling the symptoms of MS, but it is also so costly, thus raising the question of cost effectiveness (Fisher and Lovell 64).

The institute must determine the best cause of action given that the patients have the right to access the medicine, while the organization is mandated with the responsibility of ensuring the users get the best deal when benefits are weighted against costs. In fact, the appraisal committee had initially indicated that the drug would require a considerable reduction in price to attain cost effectiveness (Fisher and Lovell 65).

Since the institute promised to make transparent the process of creating its economic model with the results being made public for scrutiny and comment from the interested parties, it could be assumed to be acting with the best interest to the patients under consideration. Therefore, the delay by the NHS in giving a final verdict is based on the need to make the most ethical decision.

Excluding Those above 50 Years Old from Employment

BDL’s policy of excluding those above 50 years old from employment may be taken to be discriminative. In fact, the U.S. has the Age Discrimination in Employment Act (ADEA) that was signed into law in 1967 and prohibits employers from showing favoritism on the basis of age (Neumark 1).

Whereas the act had initially set the limit at 65 years, thereby prohibiting age-related discrimination for people between 40 and 65 years of age, the limit was eventually removed (Neumark 1). Therefore, in the U.S., no employer is supposed to base their decision concerning a job applicant on the basis of their actual or assumed age since mandatory employment was eliminated for all ages.

Ethical Decision Making In Business MBA
Ethical Decision Making In Business MBA

In the UK, the majority of citizens also view age-related decisions by employers as discrimination, with the concept of ageism emerging as a common term (Loretto et al. 281- 282). Most employees and job seekers view ageism as equal to any other form of favoritism and express their desire to have legislative protection introduced in the law to curb the practice among employers.

Although the concept of age discrimination took long to enter scientific and popular discourse in the UK, increased lobbying could make it to be cemented in law, thus prohibiting employers from practicing ageism in their workplaces. In the 1990s, Britain experienced rising concerns over age discrimination due to an increase in early exit from the labor market for older workers (Lorettto 280). Nevertheless, the UK showed considerable reluctance in formulating laws to protect workers and potential employees from ageism.

However, BDL Company may defend their policy using the rights approach. As an entity, the firm has a right to decide how it runs its business, including hiring and firing. Although this approach appears to be focused on individual’s rights to self-determination and respect for their choices, the owners of BDL may consider themselves as individuals constituting a single entity that has the right to determine who is fit to work for them in line with their mission, vision, and objectives (Velasquez et al.).

Moreover, the firm could argue that their policy is for the good of the business since past studies have established that age affects various cognitive functions, especially speed processing. According to Murman, normal aging leads to significant reduction in performance on various cognitive tasks that require a person to process and transform information quickly (111). These functions include working memory and process speed among others. Since BDL is a shoe making company, most workers must be involved in tasks requiring considering cognitive functioning, which older people might lack.

Eckert et al. affirm the effects of age on cognition, with their findings on brain changes indicating that “a frontal pattern of gray matter and white matter variation were uniquely related to age-related declines in processing speed…” (1). Therefore, it is evident that people above 50 years may not be as productive as young adults, which might explain BDL’s decision not to hire them.


To sum up, there are various ethical considerations and values that impact the daily running of a business. An entity must be conversant with various business ethics and ethical approaches to deal with various situations and make rational decisions. For instance, in the case of the company that needs to fire 500 employees to save the business from bankruptcy, the management has to consider such issues as acting for the common good, which means firing the few to save the majority while still observing their rights to truth, justice, and fairness.

Similarly, ethical issues arise where NHS must decide whether to approval beta interferon based on its proved clinical efficacy only or to consider its cost effectiveness as well. In the end, the institute considers the lack of cost effectiveness as a major factor.

Finally, BDL Company has to contend with the issue of hiring people over 50 years old, considering that ADEA prohibits employers from practicing age-related discrimination, while science has established that ageing reduces performance in cognitive functions significantly. Although the firm’s policy may be seen as discriminatory, it has the right to run its operations to its best interests.

Works Cited

Cohen, David J, and Matthew R. Reynolds. “Interpreting the Results of Cost-Effectiveness Studies.” Journal of the American College of Cardiology, vol. 52, no. 25, 2008, pp. 2119-26.

Eckert, Mark A., et al. ‘Age-Related Changes in Processing Speed: Unique Contributions of Cerebellar and Prefrontal Cortex.” Frontiers in Human Neuroscience, vol. 4, Art. 10, 2010, pp. 1-14.

Fisher, Colin, and Alan Lovell. Business Ethics and Values: Individual, Corporate and International Perspectives. 2nd ed., Pearson Education Limited, 2006.

Loretto, Wendy, et al. “Ageism and Employment: Controversies, Ambiguities and Younger People’s Perceptions.” Ageing and Society, vol. 20, 2000, pp. 279-302.

Murman, Daniel L. “The Impact of Age on Cognition.” Seminars in Hearing, vol. 36, no. 3, 2015, pp. 111-21.

Neumark, David. “The Age Discrimination in Employment Act and the Challenge of Population Aging.” NBER Working Paper Series 14317, National Bureau of Economic Research, 2008.

Velasquez, Manuel, et al. “Thinking Ethically.” Markkula Center for Applied Ethics.

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Cross-Cultural Management Assignment

Cross-Cultural Management at McDonald’s Assignment

Cross-Cultural Management Assignment – McDonald’s is the largest single-brand chain of restaurants globally. Since its establishment, it has offered various products such as soft drinks, cheeseburgers, hamburgers and potato chips in its menu with various additions and phasing out over time. McDonald’s has overtime spread across the world and overcome significant cultural differences between its home country, the United States and its new markets.

However, its expansion into India is likely to face more significant challenges due to the magnitude of cultural differences between the United States and India. Through the application of Hofstede’s cultural dimensions, the most significant differences include power distance, indulgence and individualism. The high acceptance of inequality between people, the restrained culture and collectivism of the Indian society are some of the challenges that McDonald’s is likely to face.

Further, through the application of Trompenaar’s culture dimension concept, the significant challenges include particularism and diffuse Indian culture which does not have clear boundaries on private and public places. However, the recommendations are that through adverse selection marketing, concentration on innovation, improvement of products quality, and staff satisfaction, the challenges can be overcome.

One of the largest restaurant franchises currently in the globe is McDonald’s. Having been started in California as a drinks and food stand in 1937 by Patrick McDonald, it has expanded to approximately 122 countries across the world (Grant, 2010). The McDonald’s Restaurant has mastered the art of franchising and is presently the largest restaurant chain with a single-brand and furthermore, the largest global restaurant operator. In the early years of operation, McDonald’s focused on selling hamburgers, apple pies, potato chips, coffee, cheeseburgers, and soft drinks. However, today several menu items have been phased out over time with several others brought on board.

According to Grant (2010), McDonald’s has also beaten all odds and ventures into nations with an entirely different culture with the United States which is the home country. However, there are other countries that the restaurant has yet to establish franchises. One of the countries that McDonald’s therefore ought to open the business in India. Although there is a significant difference in culture such as leadership, communication, staff handling, marketing and ethics, India has a substantial market that McDonald’s can exploit (Ferraro and Briody, 2013).

Cross-Cultural Management Findings

For McDonald’s Restaurant to take on the Indian Restaurant market, it has to overcome the challenges that are brought on board by the significant differences in culture between the home country, United States and India, the new and prospective market (Trompenaars and Hampden-Turner, 2011). Through the application of theories and concepts of Hofstede’s dimensions of culture and the Trompenaar’s dimensions of culture, the challenges that may emerge due to differences of culture can be analysed (Deresky, 2017).

Migliore (2011) states that the most significant cultural dimensions that McDonald’s restaurant franchise is likely to face in the process of opening the business and adapting in India are the differences in power distance, individualism and indulgence (See Appendix). One of the culture dimensions with the most significant difference is power distance. It elaborates the extent to which the less commanding members of the society in organisations and institutions in a nation, such as India, agree and expect that power is unequally spread.

The power distance score for India and the United States is 77 and 40 respectively and therefore; there is a difference of 37. This implies that McDonald’s is likely to have a difficult time in marketing their products and services in India based on the fact that the inequalities of the society are endorsed by the populace as much as the leaders of India do (Sriramesh, 2013).

The other significant cultural dimension difference that McDonald’s is likely to face is Individualism (See Appendix). According to Tu, Lin and Chang (2011), individualism is higher in the United States as compared to India. Individualism is the interdependence degree society can maintain among its members. The United States and India scores are 91 and 48 respectively. There is a difference of 43 between the two countries.

The United States is an individualistic society, and most people only take care of themselves and their direct families hence it is easy for the McDonald’s restaurant to influence individual families. This is primarily because individualism means that the standards of ethics are established by individual families and not the society (Tu, Li and Chang, 2011). However, the Indian society is a highly collectivist society. Most ethics and related-decisions are made on a society level. This culture is likely to create a challenge for McDonald’s restaurant as it is easier to influence a family as opposed to an entire society.

Another Hofstede’s cultural dimension of significant difference between the United States and India is the indulgence. According to Pandey and Devasagayam (2015), indulgence is the degree to which individuals attempt to control their impulses and desires based on the manner in which they were born. The score for indulgence in the United States and India is 68 and 21 respectively as below.

Cross-Cultural Management Assignment
Cross-Cultural Management Assignment

A significant difference of 47 exists between the two countries. In the United States, children, adolescents and adults are highly indulgent hence communication and negotiation with various stakeholders is a readily achievable objective. However, Indians have a restrained culture, especially in food consumption. For instance, it will be a considerable challenge for McDonald’s to have Indians populace indulge in the consumption of beef.

This is because individuals have been brought up to respect cows as members of the family. Cows in Hindu are seen as animals that are motherly giving. All products with beef related products would mount a massive challenge in convincing Indians to be stakeholders, let alone communicating or negotiation with them.

On the other hand, the Trompenaar’s cultural dimensions that can be applied in analysing the difficulties McDonald’s may face in setting up business in India includes Universalism versus Particularism and Specific Versus Diffuse Cultures (Dickson et al. 2012). In the United States, leadership decisions are taken without situational context regard.

Therefore, McDonald’s managerial decisions are easily made in the United States as the concentration is on the legal contracts. That is universalism. However, India focuses on particularism which means that the concentration is more on personal relations. Leadership decisions are highly likely to be difficult in the making in India due to the focus on personal relations as opposed to legal contracts.

Furthermore, according to Katan (2014), the specific versus diffuse culture dimension is significant between the United States and India. Staff handling by the McDonald’s restaurant in the United States is easy as borders, distinctions, and private and public spaces are separated. For instance, the relationship between subordinates and their bosses are prohibited. Therefore, there are specific cultures in the United States that makes the staff handling easier for McDonald’s.

On the other hand, staff handling in India is most likely to be a challenge as the culture is diffuse. This means that private and public spaces do not have a clear border or distinction. More so, work relationships are allowed to extend beyond that to personal relationships. Employees and their superiors are most likely to be in each other’s life aspects beyond McDonald’s. This is most likely to make it challenging to handle staff as connections between the subordinates and bosses may lie beyond the working relationship.

Conclusion Cross-Cultural Management

McDonald’s expansion into India is most likely to face challenges due to a significant difference in culture. Cultures are very different between McDonald’s home country, the United States and India. Through the application of Hofstede’s dimensions of culture, indulgence, individualism and power distance are the most significantly different between the two countries (See Appendix). McDonald’s face the challenge of indulgence in India as Hindus are brought up believing beef should not be taken. Hence, all products related to beef are less likely to be served in India. More so, India is more of a collectivist nation than an individualistic one.

Most decisions on ethics, therefore, depend on society viewpoints. Thus, as opposed to the United States, McDonald’s is less likely to influence the people whose ethics rely on the society as opposed to an individual family. Further, power distance which elaborates on the inequality of people in the society is high in India, which makes it difficult in convincing people to Purchase McDonald’s products and services through marketing.

On the other hand, Trompenaar’s dimensions of culture which could have significant challenges on McDonald’s expanding into India includes specific versus diffuse cultures and universalism and particularism. Unlike the United States, India does not have clear borders on private and public spaces, and therefore, handling of staff would be difficult for McDonald’s as work relationships extend to personal relationships.

More so, leadership decisions would also face challenges as unlike in the United States, India focuses on personal relations as opposed to legal contracts in performing operations and making judgments. Indulgence, power distance and individualism are possible to influence over time. However, particularism and diffuse cultures would need more than just McDonald’s willingness to transform the dimensions as they border on government-based responsibilities.


For McDonald’s to overcome the challenges it is likely to face in setting up business in India; the following recommendations have to be carefully followed. According to Lian, Ferris and Brown (2012), one of the ways of reducing power distance in India by McDonald’s is ensuring that there is a reduction in errors, quality of services and products is improved, and there is a satisfaction of safety and staff members. More so, draconian and autocratic relationships should be eliminated and more premiums placed on collaboration between the employees and their supervisors. This will allow evenly distributed power and a comparatively lesser emotional distance between supervisors and employees.

For McDonald’s to excel in India, Individualism has to be promoted as opposed to collectivism. The culture of collectivism can be transformed through promoting innovation and high individual responsibility level. According to Zhang, Liang and Sun (2013), either technological or food innovation can dismantle the idea of collectivism as people are drawn towards personal needs rather than collective wants. Individualism will allow some competition degree amongst people hence decisions and ethical standards being decided individually rather than by the society. This would allow McDonald’s to penetrate the Indian market easily and to have a higher degree of influence.

Furthermore, indulgence can be heightened through constant adverse selection marketing. According to Er-li (2010), this kind of marketing allows the seller and the buyer to have information on the product which is not matching. With time, people in India may find themselves taking all kinds of products in the McDonald’s restaurant.


Deresky, H. (2017). International management: Managing across borders and cultures. (9th ed.) London. Pearson.

Dickson, M. W., Castaño, N., Magomaeva, A., & Den Hartog, D. N. (2012). Conceptualizing leadership across cultures. Journal of world business47(4), 483-492.

Er-li, C. A. O. (2010). Channel partners selection and drive based on adverse marketing [J]. Science-Technology and Management2, 019.

Ferraro, G. P., & Briody, E. K. (2013). The cultural dimension of global business. Upper Saddle River: Pearson.

Grant, E. (2010). Might makes mcright: McDonald’s corporation’s trademark strategy. J. Contemp. Legal Issues19, 227.

Katan, D. (2014). Translating cultures: An introduction for translators, interpreters and mediators. Routledge.

Lian, H., Ferris, D. L., & Brown, D. J. (2012). Does power distance exacerbate or mitigate the effects of abusive supervision? It depends on the outcome. Journal of Applied Psychology97(1), 107.

Migliore, L. A. (2011). The relation between big five personality traits and Hofstede’s cultural dimensions: Samples from the USA and India. Cross-Cultural Management: An International Journal18(1), 38-54.

Pandey, S., & Devasagayam, R. (2015). The effect of deals and moods on compulsive buying in young adults: A comparison of an indulgence culture and a restraint culture. Journal of Customer Behaviour14(3), 257-270.

Sriramesh, K. (2013). Power distance and public relations: An ethnographic study of Southern Indian organisations. In International Public Relations (pp. 181-200). Routledge.

Trompenaars, F., & Hampden-Turner, C. (2011). Riding the waves of culture: Understanding diversity in global business. Nicholas Brealey International.

Tu, Y. T., Lin, S. Y., & Chang, Y. Y. (2011). A cross-cultural management comparison by individualism/collectivism among Brazil, Russia, India and China. International Business Research4(2), 175.

Zhang, X., Liang, X., & Sun, H. (2013). Individualism-collectivism, private benefits of control, and earnings management: A cross-culture comparison. Journal of business ethics114(4), 655-664.

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Disruptive Innovation Project

Disruptive Innovation

Over the past decade, the business world has been positively and negatively affected by several disruptive innovations. Disruptive innovation occurs when a new or underrated company initially at the bottom of an industry’s market moves up and eventually displaces the existing competitors. It alters the industry’s competition strategies by introducing completely new approaches. The term disruptive innovation was first coined in the book, The Innovator’s Dilemma. In the 1997 best-seller, a Harvard Business School professor wrote about “why some innovations that were radical in nature reinforced the incumbent’s position in a certain industry, contrary to what previous models would predict.”

New business adopts new layouts that cannot be mimicked by competitors making it the lead in that specific industry. This subsequently affects the entire market network and processes. For that reason, businesses have been striving to shift their means of operation to keep up with this competition.

Disruptive innovation has led to business shifts from traditional approaches to modern technological approaches. Technology is continuously experiencing a revolution. Technical changes or digital innovations lead to a technology disruption (Rachinger, Korajman, Vorbach & Guggenberger, 2019). An excellent example of how companies have shifted due to the internet and digital innovation is in the competition techniques.

Companies have adapted to a digital transformation strategy in which they integrate various digital technologies in all the main business operation areas. Offering customers an exemplary digital experience at a low operation cost demands new technological business applications. In the end, the market concedes these innovations. They speed up operations and convey businesses’ outcomes more effectively.

Digital transformation means a change in a business’s culture as well as a change in thought. This transformation has created a need for organizations to change their dynamics to swiftly cater to the industry’s changing needs. Today’s management teams are working hand in hand with IT experts to meet the industry’s competition by speeding up the company’s activities, lowering operational costs, and generally improving the whole business process.

Disruptive Innovation
Disruptive Innovation

The digital transformation process positions the customer at the center of the business model (Kotarba, 2018). Businesses are taking advantage of technology to reach their customers more effectively and efficiently through mass media and advertisements. This new model shapes and changes the entire working and operations of a business. Technology has also made it easier to adapt to the changing demands of the market.

However, these technological disruptions have not been advantageous for all businesses. They are a great challenge for companies that have not been able to cope with the sudden changes followed by high paces. This has seen the disintegration of past business models and the closure of big businesses.

Disruptive Innovation and Technological change

Technological change has influenced and pushed businesses beyond the traditional business models from the strategy to the operations. The Australian government is committed to delivering a stable, safe, and inclusive digital economy. It has seized all chances and opportunities brought about by the digital transformation. Most businesses have adapted to innovations such as remote sensors, blockchain, quantum computing, artificial intelligence, robots, and autonomous techniques into their processes, and the results are improved outputs.

More industries have been created for the production of more products and services. Endorsement of digital transformation has brought about more employment opportunities, improved life quality, better-paying jobs, and an improved ministry of industry.

Australia has laid out all the future opportunities and challenges brought about by technological changes. This has enabled businesses to maximize and augment the available opportunities. According to research, Australia’s digital technology innovations contributed to approximately 58 percent of the country’s economy in 2014, and the estimated improvement over the next ten years could be around 315 billion dollars (Fleischmann, Daniel & Welters, 2017). To ensure that all its citizens survive in the technological disruption and that no one is left behind, the government points out all work that is ongoing and analyzes more recommended efforts.

Australia’s digital future is fixated on four primary areas, which include the people, digital tools, digital services, and the regulatory system. The government focuses on people by ensuring that citizens have the right digital skills to operate on new technological innovations. It also ensures that digital tools are integrated by providing adequate infrastructure.

Regulatory systems are maintained by the government, providing an enabling environment that ensures cybersecurity. The government also focuses on better ways to deliver digital services to all citizens equally. Digital technologies have delivered benefits across the economy sectors, such as agriculture, services, health, mining, manufacturing, education, transport, tourism, and emergency services.

However, despite a significant increment in the employment rates, some jobs have definitely been lost. An example is the truck drivers in mine areas who have been taken over by automatic trucks that do not require personnel operation and are safer. The CEDA (Committee for Economic Development of Australia) has envisioned that of all the jobs that would be lost, 40 percent would be attributed to replacement by automation (Healy, Nicholson & Gahan, 2017). The benefit brought by disruption, however, oversee the disadvantages as more employment rates have been recorded since the technological advancements began.


Fleischmann, K., Daniel, R., & Welters, R. (2017). Developing a regional economy through creative industries: disruptive innovation capacity in a regional Australian city. Creative Industries Journal, 10(2), 119-138.

Healy, J., Nicholson, D., & Gahan, P. (2017). The Future of Work in Australia: Anticipating how new technologies will reshape labor markets, occupations, and skill requirements. Department of Education.

Kotarba, M. (2018). Digital transformation of business models. Foundations of Management, 10(1), 123-142.

Rachinger, M., Korajman, I., Vorbach, S., & Guggenberger, T. (2019, June). The Influence of Technological Disruptions in Business Ecosystems on Elements of Companies’ Business Models. In R&D Management Conference 2019.

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Five Forces Model Automobile Industry

Five Forces Model Automobile Industry Case Study Analysis

Title: Five Forces Model Automobile Industry Case Study Analysis. Michael Porter’s Five Forces Model is a simple yet effective business analysis tool that is used to determine whether a strategy has the potential to be profitable in a company’s competitive environment. When carried out in the right way, with the right tools, the Five Forces Analysis can provide invaluable insight into your business’s competition and how much power you hold in the market, so you can adjust your strategy for success. As its name suggests, there are five forces which include the intensity of rivalry, power of buyers, power of suppliers, threat of substitutes and threat of potential new entrants (Porter. 1981).

Intensity of Competitive Rivalry

The key factors that influence the intensity of rivalry in the automobile industry include the number of competitors, the brand recognition of the competitors and the frequency with which new automobile products are introduced by competitors. According to Potter’s case study the global automobile industry is highly concentrated.

However, none of the companies in the industry has achieved donation of the market. The case study indicates that about seven firms have around 10 to 15 percent of the market share. The reason for this is the high acquisition levels and collaboration activities in the global automobile industry, which minimizes competition regardless the frequency of purchase or recognition of the different brands in the industry.

As a result, the intensity of competitive rivalry in the industry is moderate. The implication of the moderate competitive intensity is that automobile firms still manage to make significant profits especially since the level of competition is suppressed by the joint ventures and alliances among automobile firms in the industry.

Five Forces Model Porter
Porter’s Five Forces Model

Power of Buyers

The factors that shape the power of customers in the automobile industry include the number of buyers in the industry, frequency of purchase, and the size of purchases. According to Potter, the global demand for cars is associated to a nation’s economic performance.

The data on Worldwide Car sales in 2016 indicate that China, which is among the top best performing economies in the world had the largest had a percentage increase of 10.7 in car sales in 2016. This demand can be viewed in the context of the wider process of a country’s economic development which leads to selective ownership that causes mass market volumes of short time cycles that reduce within mass volume causing delays in purchases or consumer changing segments.

This means that buyers demand for automobiles is determined by eternal elements that they cannot control. In this regards, the intensity of the power of buyers is moderately weak, which means, firms are still able to make reasonable profits.

Power of Suppliers

The power of suppliers is influenced by the following factors, the number of suppliers, replaceability of the supplies and the exclusivity of the supplies (Porter, 1980). Potter indicates that suppliers of the global automobile industry have become solution provider and knowledge partners with the automobile firms. Moreover, technology is increasingly becoming more intelligent enabling the suppliers to gain larger economies of scale giving them the power to bargain.

However, in the global automobile industry 33% and 17% of all suppliers have their manufacturing facilities in Eastern Europe and China respectively which raises the issue of Intellectual property rights and theft of technology. These has caused a decline in the power of mot suppliers as this trend is expanding to other parts of the world. For this reasons, the intensity of the power of suppliers is moderately strong, which means that the firms are forced to collaborate and partner with suppliers to minimize most of raw material to maximize profits.

Threat of Substitutes

Threat of substitutes in the automobile industry is determined by technology advancement, affordability and availability of potential substitutes and customer’s acceptance (Porter, 1980). According to the case study, the global automobile industry threat of substitution is mainly due to environment issues and economic consideration, where people see alternatives that are cheaper and greener.

The automobile industry contributes about 70% of the emission of CO2, and consumers are ready to take up alternatives that are more environmentally friendly. However, such substitutes are mostly provided by the same automobile firms. In this case, the intensity of threat of substitutes in the industry is weak making the industry attractive and profitable.

Threat of New Entrants

The threat of new entrants is influenced by the strength of brands of existing competitors, technology and financial requirements and entry barriers (Porter 1980). Potter indicates that there are issues related to the outward and inward direct investment that firms seek to use to expand or grow into new markets affect entry strategies adopted by these companies. However, on a positive note most governments around the world are attracting investors by providing a range of grant aid and subsidised domestic rates, but the capital and cost of production and manufacturing is quite high. For this reason the intensity of treat of new entrant is weak, which makes the industry competitive ad highly profitable.

Five Forces Model Conclusion

From the case study, it is evident that competitive rivalry in the automobile industry is moderately strong, while the buyers bargaining power is moderately weak. It is also evident that the suppliers bargaining power is moderately strong, while the threat of substitutes is weak. The threat of new entrant is weak considering that the firms in the industry have gained strong market positioning that are hard to compete with and the high investment capital needed. Based on this analysis, is evident that the automobile industry is a feasible market especially for the companies that are already operating in the market.


Porter, M. E. (1980) Competitive Strategy. New York: Free Press

Potter, N.S. The Global Automotive Industry: The Turbulence Increases

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