Grasping the unique qualities of foreign cultures is key to the success of global brands. The growth of emerging economies in Southeast Asia, South America, and Africa has inspired many multinational corporations to expand their operations into new cultural arenas. An excellent example of a company with cross-cultural perspectives is the H. J. Heinz Company based in Pittsburg, PA. The company offers a massive variety of processed food items that are marketed in over 200 countries throughout the world, making it one of the most well known brands in history. It’s hard to sit down at a restaurant and not find a Heinz branded product at the table. In order to achieve this level of success on the global market, the Heinz Company has had to adapt to the needs of local residents in a wide variety of business environments. The following essay will single out and discuss a primary cultural issue that impacts the organization’s interactions outside the United States. The paper will also provide an analysis of ethical and social responsibility issues faced by the Heinz Company as a result of being global
Identify a global organization with a multinational presence. Identify and research a cultural issue that affects this organization’s interactions outside the United States. Define the issue and provide an overview of how became an issue in the organization. Prepare an analysis of the ethical and social responsibility issues your organization must deal with as a result of being global. Write a 1,050- to 1,400-word paper summarizing the results of the analysis. Include the following:
- Identify ethical perspectives in the global organization.
- Compare these perspectives across cultures involved in the organization.
- Describe a viable solution for this issue that could be acceptable by all stakeholders.
Defining a Cultural Issue
There exists a large list of potential cultural issues that a multinational corporation may have to address. In its 2012 Annual Report, the Heinz Company stated “The success of the Company is dependent upon anticipating and reacting to changes in consumer preferences, including health and wellness. There are inherent marketplace risks associated with new product or packaging introductions, including uncertainties about trade and consumer acceptance” (Heinz Company 2013). A cultural issue that could adversely affect the success of Heinz is an inability to maintain brand loyalty in overseas markets. Changing trends in the world’s diet are starting to favor organic and raw ingredients. In particular, European and Asian markets are starting to recognize the health benefits of avoiding processed foods. Since most of the products sold by Heinz are highly processed, this trend could be detrimental to the business model. The company will need to find a way to adapt to this trend to maintain a loyal customer base.
Analysis of Ethical Perspectives
As a processed food manufacturer, Heinz Company has a major impact on issues related to environmental sustainability. Hundreds of suppliers provide the raw materials to make products like ketchup and mustard, which typically come directly from agricultural operations. From an ethical viewpoint, it is important for Heinz to work with suppliers that have a strong code of ethics and do not engage in environmental pollution. Taking a firm stance on these issues will build trust among consumers who see their communities damaged by unethical agricultural companies. Currently, the company has already made great strides towards these goals by releasing a semi-annual sustainability report. The report contains the firm’s goals related to economic support, environmental sustainability, and charitable causes. The wide scope of the Heinz Company’s business operations creates vast opportunities to improve social responsibility. Condiment bottles make up a large portion of the company’s sales and put communities at risk of pollution. One major accomplishment for the firm was to start using fully recyclable ketchup bottles that were originally developed by the Coca-Cola Company (G & A Institute 2011). This initiative has proved to be very beneficial to large urban areas that suffer from rampant pollution.
Comparison of Perspectives Across Cultures
The European market is ahead of the United States on the issues of recycling and sustainable urban design. Consumers in this market will continue to demand products that come from corporations with strong ethical values. The highly congested living environment of Europe has motivated consumers to demand products that can be recycled and reused. The Heinz Company must closely monitor the consumer demands in this market and react quickly to their changing needs. For instance, it is possible for a small startup company to release a sustainable ketchup product that could take over significant market share in a short amount of time. In contrast, many emerging economies, such as China, have a vastly different perspective on economic growth. They want to take advantage of industrial technology to grow society as fast as possible, despite the negative effects on the environment. Consumers in China are far more concerned with pricing and value, as opposed on social responsibility (McKay, 2012). It will be important for Heinz to balance the contrasting needs of these two cultures.
Viable Solution for Stakeholders
A viable solution to this issue must grow profitability for shareholders, uphold supplier relations, and maintain social responsibility in the community. An acceptable solution is for the Heinz Company to build a supply chain exclusively with organic agriculture producers. This strategy would position the company to capitalize on growing trends in global dietary choices, while maintaining a position that appears highly ethical to stakeholders. Common shareholders may have to pay a premium for this project initially, but it will put the corporation in an ideal position to grow market share and customer loyalty. As time goes by, this will translate into a higher return on equity for common shareholders. The end result of this decision will provide global consumers with a higher quality product that supports the rising sustainable agriculture needs across the globe.
The success of H. G. Heinz as a global brand is undeniable and has delivered shareholders billions of dollars in profit. However, the global economy is slowly moving away from processed foods and choosing locally produced organic foods as a healthier alternative. The company will need to reformulate its products to suit these demands if the trend continues. Putting forth a sincere effort towards improving ethics and social responsibility can also provide a strong boost the brand’s image on the global scale. By shifting the supply chain to exclusively organic producers, Heinz will be able to deliver better value to customers and higher returns to shareholders. In summary, businesses that operate on the global scale must be prepared to deal with fast paced dynamics of cross-cultural perspectives.
G & A Institute. (2011). Featured Social Responsibility Report – H.J. Heinz Company.
McKay, Z. (2012). The Ten Principles For Doing Business In China.
H. J. Heinz Company (2013). 2012 Annual Report.