(1)Indian government traditionally undervalue the business activities. Politics and leisure are gained more value than work. While in U. S.
, American dream emphasis on working hard for personal value, business and politics gain the same social respect. (2)India has many political and legal issues with foreign investors. Indian law to some extent is ambiguous when handling the lawsuits with foreign investors,which may have been the reason causing problems for Coke’s operations in India? 3) Both countries may have different ways of doing businesses. Foreign investors should consider the fact that every culture is different and they need their own practices (polycentric), if Coke still thinks its American style of business operation is better and practices it in India(ethnocentric), the consumers in India will regard those practices as wrong and inappropriate. This could also have been the reason why India blame on the water contamination and shortage caused by Coke.As the Indian people interpret silence as guilt, thus the representatives of Coke should response quickly: firstly, to apologize for the destroying of water resources in India, and then do some compensation for the local people. secondly,find ways independently or Corporate with authoritative NGOS to solve the problem. It is very important for Coke to built good reputation and consumer loyalty in international market.
thirdly, learn from what Pepsi does: doing CSR such as digging village wells, trying best to reduce water waste,etc. these measures could help to interact with local people, improve relationships with government and the public.From global standardization to localization Change the style of advertisement to fit the flavor of Indian people. Add some Indian cultural factors to the can package. Take more CSR as what Pepsi did. Improving relationships with Indian government and the public. Start to communicate with local consumers, and response quickly. Because in India, keep silence means guilty,even though India and U.
S. both speak English, because of different value, culture and social environment, miscommunication may exists; on the plus side, it is the best way to understand the need or complain of Coke’s consumers. 1) MNCs should overcome Parochialism–view the world through their own perspectives, and the simplification–the process of exhibiting the same orientation toward different culture groups. Because doing things the same way in foreign markets as they are done in domestic markets may arise more conflicts when involving in cross-cultural management. In this case, Coke prefers individualism to achieve their own value in India, while India is a society respect more about politics than business, Coke did not improve the relationships with bureaucratic offices and finally it brings trouble to Coke about the pesticide findings.
MNCs should set up unique human resource management system to fit for local employees, improve communication effectiveness to reduce misunderstanding among multicultural groups in the company, for example, to provide language and cultural training, to improve feedback system. Internally, to select CSR practices that fit with the company’s existing capabilities; externally, work with NGOS, pragmatically respect local culture and protect the environment.