Report on Willow Wines In Hong Kong

Introduction

Irrespective of industry, every business entity core objectives to have continuous growth without any shaking interference characterised by high end-goals that include efficiency, revenues, return in investment, productivity, customer relations, sustainability, quality, and importantly market expansion. Nevertheless, as pointed by Kandachar & Halme (2017) and Schaltegger & Wagner (2011), these mission and goals does not come without challenges like competition, changes in market, shift in consumer demands and perception, management, misalignment of consumer and organizational cultures, and overlooking the market needs and purchasing behaviour hindering or derailing their achievement. Every business whether successful or unsuccessful is built on assumptions shaping organization’s behaviour, dictating decisions to be made, and defining expected results. Under theory of business, failure to align these elements with reality characterised by continuous and gradual changes results in unsuccessful attainment of stipulated goals and vision.

Building from concept of internationalization, the business needs to be involved in planning, implementing services and products, culture, beliefs, vision, perception, approach, and competency that appeals to the intended market’s culture, behaviour, beliefs, and languages. Internationalisation offers an opportunity for businesses such as Willow Wines to grow its businesses before domestic market into foreign environment and dynamics. Notably, venturing into international market means encountering different market dynamics culturally, management practices, legal aspects, and organizational operations and structures. Willow Wines, a British Wine Company producing such brands as Mogen David, Cupcake, and Almaden Vineyards, entry into Hong Kong as an expansion strategy is expected to face several challenges because of change in market environment. Based on this preamble, the report will focus on analysing the cultural profile and management practices, the staffing policy and human resource aspects, communication problems and approaches to internationalization that can be adopted by Willow Wines.

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Cultural Profile and Management Practices

Willow Wines entry in Hong Kong it is pertinent to formulate a strategized plan that encompasses in depth understanding of market culture, forecasted demands, potential barriers, internal capabilities, and market entry strategy. Building from Trompenaars and Hampden-Turner (2011) assertions on market culture and businesses performance, understanding the Hong Kong culture enables the company establish competitive advantage through consumer services, employee engagement, leadership approach, marketing technique, management practices, and working environment. Yoon and Lam (2012) alluded to the fact that Hong Kong is a unique country where the government lowered duties on wine and beer and established no sales tax on the wines. The country inherits a diverse culture ranging from Chinese tradition, Shanghainese, and western culture. This diversity opened up acceptance to variety of beliefs, views, perception, and behaviours predominantly towards purchasing behaviour, products attitude, and aspects of leisure, which are all associated to consumption of alcoholic products in which wine is included (Tsang, 2014; Lam, 2015).

In context, Chinese culture put a lot of emphasis on concept of family solidarity, modesty, and saving face (Huang et al., 2016; Tang et al., 2016). Socializing and entertainment component from both Western and Eastern (Shanghai and Chinese) culture differ hugely where perspective of etiquette, social standing, and respect play a big role component during social engagement and interaction in eastern norms (Yoon et al., 2017). The difference in cultures concept of drinking, socializing, beliefs, and ways of life sets separate market structures setting two different consumer target.

In retrospect, although some locals especially Chinese and Shanghainese have adopted western culture that include idea of leisure and socialization, some elements such as cultural beliefs, attitude, and perceptions towards foods, beverage, and alcohol products in these communities goes deeper and ground on long history and traditions that can be problematic for businesses in alcohol and food industry to entry. Apart from languages, Hong Kong is one country where cultural norms would only pave way for light drinking, which is believed to be of benefit in terms of health (Walulik, 2012; Pettigrew, and Charters, 2010). Perhaps, several findings have established that almost half of the Chinese cannot sustain heavy drinking due to the genetic factors known to decelerate the essential removal of the acetaldehyde.

In a broader view, the unique position held by Hong Kong in the wine industry attracts more questions regarding the cultural base of the region and the accompanying habits. A recap of the history shows that Hong Kong initially adopted the Lingnan’s Cantonese culture, which was later absorbed by the British Culture (Louie, 2010). However, after the 156 years of rule and political separation from the Lingnan attracted the unique local identity.

Besides, the cultural spectrum is pertinent to the management practices that can be adopted within Hong Kong marketing environment. The business culture in the country is nurtured through hierarchical structures while most of the people are both career oriented and hardworking at the same time (Law, and Gunasekaran, 2012). Guanxi, referred to as relationships, is essential but not as prominent as it is the case in Taiwan and China. Most of the decisions made would take time but business relationships are normally strengthened through meals and even amicable ways of responding to questions raised by locals. While having business meetings, some would take relatively long. Therefore, when adopting management styles and practices, one would be attracted to almost democratic and collaborative style of leadership (Abramson, and Moran, 2018). However, this does not mean that the authoritative tone should be left behind. This means that Willow Wines should foster an integrated system that touches on the applicable side of several management practices and styles.

Characteristics of workers in Hong Kong

Willow Wines, while focusing on workers, should narrow down to the characteristics of workers the company is likely to encounter. Generally, a relook at the demographic profile insist on the language, customs, age and etiquette among many other things (McFarlin and Sweeney 2015). Chinese and English are two official languages used in Hong Kong with Cantonese dialect dominating the biggest percentage of the population in Hong Kong. Diversity in culture characterised by different languages, beliefs, values, attitudes, and behaviour predominantly towards alcoholic products but not limited to working values can be divisive. Although to large extend diversity in workplace can led to being competitive, efficiency, and enhance creativity in workplace, if not well managed, it might result in negative cultural stereotypes, prejudice, cultural and norms misunderstanding, understanding and fussing etiquette, and working conflict. Given that western culture and Chinese as well as Shanghainese, which are prominent cultures in Hong Kong, diverse hugely spanning for efficiency, competency, values management approach, and value of family can have a significant influence on workplace, employee engagement, relationship, commitment, and objectives.

Based on the above assertions, the company has to strategize on ways to capture these different cultures. For instance, it has to take into account the values and believes as well as personals goals when engaging with employees and to that extension consumer. An employee with Chinese and Shanghainese background consider family and personal status measured by tangible property and position (status) in an organization very important and it could be very rude and disrespectful in failure to observe set protocol and etiquette. For successful entry and subsequent growth and sustainability in a diverse market, Willow Wines need to emphasize on integration of different culture within its working environment that include adopting beliefs and approach that integrate not just prominent cultures but also smaller while taking care not to offend any. Within the business scope, workers in Hong Kong would struggle to build relationships as well as communication. It is more advisable that companies doing business in Hong Kong should equally observe the relationship.

Reception from suppliers, government, and distributors

Hong Kong has attracted the global attention over time because, at one point, China used it as an open market that posited fewer restrictions on the firms that wanted to invest in the country. While most of the businesses seem to thrive in Hong Kong, the growth is essentially attributed to the Chinese businesspersons who also form a significant portion or percentage of the entire population (Deresky 2017). Given that the country shares a diverse identify, liberal immigration policies, and open-mindedness to business and collaboration, entrepreneur from more than 170 countries can easily enter using visa-free and are allowed to conduct businesses including negotiations and signing dealings in the country. Coupled with ease of opening businesses, location relative to huge Chinese and Indian population, interconnection to western world, relatively low taxing system, and available infrastructure makes entry for Willow Wines into the country much easier and taking short period to establish businesses entities including alcohol (wines) businesses. Ideally, this sets a pretext of available supporting infrastructure (organizations) such as financial institutions, storages companies, insurance sectors, distributors, raw materials suppliers, and legal sectors. On the other hand, it sets platform for high competition that can be a positive or negative element to the company.

High number of suppliers in the industry within Hong Kong means that the entry of Willow Wines is a fresh opportunity that will increase the demand for their supplies. This means that suppliers have low bargaining powers in the industry and cannot integrate forward in vertical means. On the other hand, the government has been in full support of the wine industry and therefore, it cannot deny Willow Wines to be part of the growth (Bouncken et al. 2016). Macau and Hong Kong eliminated duties on the beverages such as beer and wine, which means that products linked to any firm can easily fetch market. As part of the employment initiative, Willow Wines stands a chance of employing or contracting distributors who would have a higher bargaining power compared to the situation before.

Leadership style to be adopted

Hong Kong puts itself as an easy-to-manipulate market but sensitive at the same attitude. The society is aligned towards a paternal attitude that observes hierarchy in both the family and business as well. While authority seems to observe the hierarchy, the foreign company and the locals consider respect as the highly valued virtue that has to be addressed at the same time (Lin et al. 2018). Integration of cultures in a diverse society to capture an approach where all not just the prominent in workplace or that of targeted consumers particularly in an environment consisting of a mixture of attitudes, culture, values, and norms implies that the business can implement a specific leadership style. However, the set of styles that address different needs of customers in the Hong Kong market must align or rather in position to accommodate other beliefs, opinions, objectives, thinking, values, and norms. For Willow Wines, this will be more demanding given that it has to have a deeper understanding of culture of all communities and societies in diverse Hong Kong. For effective formulation of entry strategy, growth, and effectiveness in achieving its goals, Willow Wines need to adopt a leadership approach that not only accommodate diverse cultures but also setting an approaches that every employees and consumers (including potential consumers) feel part of the larger picture.

Core aspects of the leadership to be adopted need to take into account and advantage the diversity in market, the talent in comes with, and being in position to challenges and problems faced in both organizations internal and external environments. (Chhokar et al., 2013; Wong et al., 2007) Although difference in culture backgrounds and values held by general public can be challenge in integrating a strategy that resonate with all stakeholders, the company need to work towards seeking employees with similar ideologies, mission, and perspectives of filling the win market gap. However, the difference between Chinese family-oriented leadership approach and western style emphasising on qualification and merit can be problematic to integrate in the business entity focusing on capturing both Chinese and Western wines markets.

Staffing Policy and significant HR aspects

Hong Kong will be a new foreign market for Willow Wines and this means that a new staffing policy should be put in place to address the concerns of the domestic market. The policy is referred to as the staffing internal human resource policy, which is equally a strategic asset prioritized for the organization. The policy puts into consideration the roles to be played by the internal HR leaders as well as staff believed to have the required competencies attached to the strategic human resource performance (Demirtaş et al. 2016; Wheelen et al., 2014). Building from concepts of staffing and employee engagement, it pertinent for the company to explore and have a deep understanding of its staff members outlining the extent individual behaviour, value, ideologies, and views aligns to those held by the organization. Notably, these components that include behaviour, beliefs, mission, and objectives held by organization and individual employee should be in align form a strong basis for consumer engagement, product development, and strategies in firms mission. The reason behind the choice of this policy revolves around the fact that local competent leaders can be in a good position to tailor the values of the company to suit the concerns and expectations of many workers. Additional Human resource (HR) functions that need to be observed include the human resource expertise, relationship management, communication, leadership and navigation (Nilson et al., 2016). Ethical practices cannot miss in this scope because they determine a central platform that would sound fair for both local and foreign employees.

Communication Problem in Hong Kong

As mentioned before, Chinese and English are common languages used in Hong Kong with the Cantonese accent but other huge language base exists in the country. While Willow Wines is a UK based meaning inheriting most of its organizational culture, values, and behaviour. Even though the company has may target this two dominant cultures, it need to communicate with the others in a manner that connects, relate, and respect their norms, values, and beliefs (Trompenaars, and Hampden-Turner, 2011). Due to dialect and norms, some languages and communication styles might be offensive and considered disrespectful. Diversity in Hong Kong means the company must formulate a strategy communicating to not just targeted consumers but takes into account the norms and cultural difference in both workplace and market environment. It needs to understand that consumer and employee’s behaviours, drinking patterns, attitudes towards a product, and reactions towards a new product are driven by the way the information is delivered to potential consumers and to the larger society. Language changes accompanied by shift in perceptions and attitude towards products and generally industry especially recent increasing emphasis of adopt Chinese culture can significantly affect such wine drinking culture mostly associated with Western culture.

Approaches to Internationalisation

Establishing a firm in a foreign country is accompanied by many challenges ranging from staffing, consumer relations, government policies, regional collaboration, cultural change, and purchasing behaviour of consumers. Perhaps, Willow Wines would still encounter the same problem while trying to balance employees from the main company and the ones from the local community. It is important to consider the fact that a company in a foreign country such as Hong Kong should try all means to integrate its objectives, vision, and organizational culture with established system, local consumer culture, and behaviour in order to enhance product and company acceptance (Michailova et al., 2017). For Willow Wines to successful entry and establish its business in Hong Kong, it needs to adopt an ethnocentric orientation ground its organizational culture, values, and norms on British traditions and Western identify. Although this has a risk of setting impression that foreign businesses and organizations taking over local values and identify or worse disrespecting consumers cultural values and beliefs. Given that alcoholic products (Willows Wines industry) holds diverging views and attitudes in different communities and cultures globally especially Chinese, Shanghainese, and Jews, which are dominant cultural groups in Hong Kong, where social structure, respect, and family values plays are strictly observed, taking a Western culture (British values and identify) may encounter negative reception or low acceptance. Nevertheless, the attitude of the company’s top leaders, directors, and employees must aligned to handle international tasks that consists of dealing with diverse cultures, market structure, government policies, and product attitude compared to the country of origin (Baik and Park 2015). In this case, policies and strategies are transferred from the headquarters to most of the international subsidiaries.

Secondly, the company may want to consider change its strategy in case using identify and values of original culture reformulating its organizational culture and perception to reflects those of country or consumers it intends to capture. In this case, Willows Wines has change its strategy, approaches, objectives, beliefs, and values to reflect Hong Kong culture encompassing Western, Chinese, and Shanghainese culture that are prevalent in the country. This strategy offers a better chance of connecting with consumers through elements that resonate directly with the needs, views, attitude, and purchasing behaviour hence enhancing success rate of the company (Cheung, and Kwong, 2016). Nevertheless, one can argue that the company losses that sense of pride and identify. Significantly, although Chinese and Shanghainese culture can be forgive to foreigners on breaking cultural and traditional norms, failure to deeply grasp and have deeper understanding of some behaviours, beliefs, and norms can greatly hurt product and organization reputation leading to negative attitude.

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References

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Appedices

Overview of Hong Kong cultural stratification

Most of the urban residents and young people form part of the strong labour force. Young Chinese workers are fond of Mandarin, Chiu-Chow, and Shanghainese. Confucianism defines as cope that incorporates the family values that describe a worker in Hong Kong (Yoon and Lam 2012). Besides, etiquette and customs witnessed among workers is very different from the westerners. Young people would address their senior with an honorific title together with their surnames. However, some of the workers would end up adopting some of the western names.

Leadership styles

The first style that needs to be integrated in the system is the directive or instrumental style, which is paramount in clarifying the accomplishments, roles, as well as expectations of the leader or the company (Bouncken et al. 2016). The style can be attached to the patriarch attitude that observes and upholds hierarchy. The second one is the supportive style, which expresses the attitude of showing concern for the well-being of the subordinate. This goes alongside the collaborative style, which brings the subordinates close to their employers (Lin et al. 2018). The participative style is more consultative and even the subordinates are involved in decision-making. Lastly, the achievement-oriented style fosters setting goals, a role assigned to leaders, to be attained by the juniors and subordinates.

Strategies for internalization by Willows Wines

The company can adopt the polycentric orientation, which favours the host country. This means that subsidiaries are managed as individualized or autonomous units given the mandate to run business functions on their own. Top officials are likely to be captured from the host country for the purposes of having a better understanding of the local demands and needs (Luo 2016). However, the approach tends to separate the subsidiaries from the headquarters.

The third approach is the geocentric orientation, which disregards nationality as if any competitive advantage. This means that employees are recruited across the entire the world with an aim of getting best people who have the right skills that can solve global problems (Baik and Park 2015). The main aim of this approach is gain mileage in terms of global integration and global differentiation between the foreign subsidiaries and the headquarters. The last approach can be studied by Willow Wines is regiocentric orientation where a firm focuses on a group of countries to establish the market characteristics. The basic assumption behind regiocentric is that the needs of customers across the chosen countries would be the same, and therefore pave way for application of similar strategies.

Sociocultural theory developed by argued that society have a huge role in development of people and culture and importantly development is behaviour include purchasing behaviour and attitudes towards some components is grounded on human interaction and culture one lives in. With rise of globalisation, the importance of cultural elements plays a critical for strategy formulation and strategizing form corporate leaders, managers, and executives. As pointed by Lewis Model od dimensions of behaviour corporate cultures, issues of leadership, planning, decision-making, recruitment and task assignment coupled with perspective taken towards consumer dimension (cross cultural dimensions)

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