Challenges and Lessons in Costco’s Global Expansion: Cultural Differences, Ethnocentric Attitudes, and Interpersonal Dynamics

QUESTION

1. What are the biggest challenges Costco will experience in trying to expand globally?

As other stores, Costco face several challenges, the biggest one is that most families tend to have small families. So, they will not need to buy big amount of goods. Furthermore, small families usually have small homes and there is no place available for large amount of food. On the other hand, retail prices are also depressed due to economic conditions, this lets people to purchase small quantity of food from nearest store where they live. Another challenge for Costco is how to persuade new customers to be Costco members

2. How did Costco attempt to avoid ethnocentric, polycentric or geocentric attitude? Provide example to support your conclusion?

To be clear I will briefly define

Ethnocentric attitude: means believing native country culture, language and behavior are the best

Polycentric attitude: foreign people works and understand better than other

Geocentric attitude: never mind native or foreign they focus on knowledge and efficiency

As I read management action, I found Costco used local employee to run the operations and Costco branch in Spain sales two-third products that originate from Spain, these attitudes meets ethnocentric characteristics

3. Use the table 4.6 to identify cultural differences that are likely to arise between Costco U.S employees and local employees working in Australia, Spain and China. How might these differences affect interpersonal and what can the company do to reduce any un intend consequences from these differences?

As I see the table, it shows ranking highest and lowest on the GLOBE cultural dimension. The countries mentioned in question are U.S, Australia, Spain, and China. I see assertiveness dimension Australia, U.S and Spain classify at highest level, while Spain classify from countries that has lowest high rate in-group collectivism dimension and lowest rate in gender egalitarianism. All these dimensional differences can affect in interpersonal interaction between employees, human resource at Costco can manage these cultural differences

4. What are the most important lessons to be learned about global management from this case? Discuss?

There are some important of lessons learned about global management for Costco as follow, the focus should be on requirements of global perspective rather than local requirements, and also maintaining the global economy reaching markets all over, empowerment employees and management and accept workers not only from local areas.

All these important lessons will assist for establishing operation for Costco and helps it sustain over long time