chapter  15
Cross-Cultural Issues in Service Quality
Pages 12

It was estimated that by the year 2000, multinational corporations (MNCs) would control approximately half of the world's assets (Dulek, Fielden, and Hill, 1991). Many companies that were identified as American, such as Kentucky Fried Chicken (KFC), Wendy's, McDonald's, Holiday Inn, and others, may saturate the U.S. market, but they are no longer domestic companies. KFC has been expanding in overseas markets such as Japan since 1970. In the 1990s the KFC store at the heart of the Forbidden City in Beijing attracted more Chinese tourists than the city itself. The McDonald's Corporation 1997 Annual Report reported that, in 1996, 50 percent of McDonald's Corporation's income came from operations outside the United States. In the hotel industry, globalization has also continued to grow. Holiday Inn, for example, entered the European market in 1969 and the Asian market in 1973. Slattery (1996) reported progressive international development of hotel chains from 1990 to 1995, most notably, Bass, Accor, Forte, New World, and Four Seasons. International expansion has many benefits; additional growth or expansion and added revenues or profits, which lead to improved return on investment, were reported as the greatest benefits (Go and Christensen, 1989). Other benefits included larger market penetration and thus more market share. In addition, greater name recognition and an international identity are also advantageous to the company. These benefits are undoubtedly most favorable; however, international expansion has exposed U.S. hospitality companies to groups of multicultural consumers. The rapid global development of the hospitality industry has made it important for MNCs to be able to function profitably in foreign markets. Global managers are expected to

successfully interact with people from various cultures and, more important, to be able to understand more than the domestic market, both in managing their operations and in marketing their products and services.