Cross-Culture management means to understand the cultural differences and their influences on the business, managers or management practices and on the whole organization. It is important for the businesses to adapt or understand the cultural perspectives of the country where they wish to expand their business so that they can help in improving the effectiveness of global management and if there will be any cultural differences these can be sorted out in such an order that it will not create any negative impacts on the operations of businesses (Cross-cultural management, 2014).
In this report, we are discussing the cross-cultural issues which are occurred by Coca-Cola Company in India. Coca-Cola is Atlanta, Georgia based company and is one of the most popular and largest beverage companies which were established in the year 1886. Moreover, it has been ranked on the list of top multicultural businesses and also known as globally No. 1 provider of sparkling drinks juices etc. Coca-Cola is global company carrying its business across the world. More than 200 countries are carrying the operations of Coca-Cola worldwide across 5 operating regions (History, 2012) (Who we are, 2017).
Whereas in India, the company came into existence in 1956 and in that year there was not any foreign exchange act. At that time the company was used to operate its money under 100% foreign equity but when the foreign exchange act was implemented new rules were made under which the foreign companies are asked to invest fewer than 40% equity only. Coca-Cola was forced to either to accept the rules or leave the country for the Janata Party and the company left in 1977. In addition to this, they came back in 1993 by wholly owned subsidiary i.e. Coca-Cola Pvt. Ltd. And Jayadev Raja was the first CEO of Coca-Cola in India (History of Coca-Cola in India, 2007).
AIMS OF THE REPORT-
· It aims to understand how different nations and their culture affect positively or negatively in business corporations. For this, the popular case of Coca-Cola in India has been described
· India carries a different culture as compared to the US and due to these cultural differences Coca-Cola is always in headlines and facing some issues.
· In this we can analyze that how and why different businesses are failing and went to lose just because of cross-cultural management.
There are number of business organization that is working in foreign countries and it is important for them to understand the cultures of that nation in which they want to work. If any business wants to get good and fruitful results from its foreign operations, then it is necessary for them to be aware of the cultural values of that nation and they must also meet the expectations of the people regarding their society. A worldwide marketer has to identify the cultural impact on the general public and this can be done by studying details of cross-culture with the help of some theories and models that provides knowledge regarding social impacts, customer needs etc. No doubt, Coca-Cola is the renowned soft drink company but still it has to face certain challenges in terms of socio-cultural. However, it was the first international refreshment drink company to enter in India but due to Foreign Exchange Act it has faced certain issues and instead of these they have also faced some issues in regard to its quality, market manipulation and also water exploitation etc.