WALMART

CROSS CULTURAL ISSUES &

CHALLENGES

Submitted by:-
Poorva Isha – MBA- HR ( B-03)
Harshita Mathur- MBA-HR ( B44)
 ABOUT WALMART

 World’s biggest retailer

 First store opened at Arkansas in 1962 by Sam Walton.
 One of the world’s largest private employer.
 They have different types of stores, super markets.
 Operates more than 10,000 retail units under 69 banners in 27
countries.
 CROSS CULTURAL ISSUES IN GLOBAL HRM

 workforces are becoming increasingly diverse and multicultural.

 increased difficulty in managing cross-border cultural relationships.
 Increasing competition both nationally and internationally
 Organizational leaders and policy makers are required to know how human
resources (HR) are managed in different parts of the world.
 CULTURAL ISSUES

 Corporate company culture: company's

experience, leadership and dominant coalition,
ownership, stage of development and business
diversity.
 Professional industry culture: comprises of two
elements; functional orientation and industry
norms.
 National ethnic culture: National ethnic culture
includes elements such as country history,
education, social organization, religion and
philosophy.
 CULTURAL ISSUES IN GERMANY

 German resistance to baggers and greeters

 Corporate culture of Wal-Mart and staff expectations
 Language Problems
 Sharing of rooms during meetings
 German issues of company control over private life of employees
 Liberal market economy meets coordinated market economy
 Govt. restrictions limited Wal-Mart to acquisition option
 Unable to become Cost leader
 Employee representation in Germany not understood by Wal-Mart
 Legal limitations on operational hours
 Violation for German laws
 Acquisition of weak brands in poor locations
 Low profitability market
 ENTHROCENTRIC MYOPIA
Factors are
 Firstly, some of the American employee management practices just didn’t fit in
the German context.
 Lack of analyses of the local market and the specifics of local customers’
demands
 Wrong store merchandising
 Cashiers were forced to smile which they were not habituated to and ended up
seeming not so sincere.
 Annoyance towards Walmart’s plastic packaging
 CULTURAL ISSUES IN JAPAN

 Geographical Issue
 Japan is a small country with limited spaces.
 Small housings and apartment sizes,
with high rent prices means that
Japanese would need to minimize their purchases.
 Cultural and demographic
 Aging population
 Japanese tends to prefer quality over low prices
 High entry barriers for foreign retailers
 Strong bond between manufactures and wholesalers so price
controlled by them.
 Several small purchases.
 High operating costs, especially because of the prices of rent and
buildings in general.
 Inability to apply original supply chain model
 Negative public image
CULTURAL ISSUES IN SOUTH KOREA
 1998, Walmart entered South Korea
 decided to leave the country in 2006.
 Like in Germany, Walmart failure in
South Korea was due to many aspects
especially cultural differences as their
management team did not take into
consideration these characteristics of
the country.
 It is fair to claim that Walmart did not
do sufficient research or intercultural
training before implementing in South
Korea.
 The inter cultural communication was
also brought in; due to the fact South
Korea and the United States have both
different communication language
and style.
 REASONS OF FAILURE IN SOUTH KOREA
It enables to see the differences and similarities the United States and South Korea have in
terms of national cultures and allows to better understand Walmart’s failure.
 Power distance: South Korea has a hierarchical society meaning that they tend to agree with
the hierarchical order without further explanation.
 Collectivism Vs. Individualism South Korea is regarded as a collectivistic civilization; and loyalty
is important for them. Walmart imposed its own individualist style.
 In the Uncertainty avoidance, South Korea’s uncertainty avoidance is higher than United
States’. In South Korea, people feel that they need to work hard and have rules; while in the US
they only work hard when needed.
 CHALLENGES RELATED TO IHRM
 Coordinating market, product, and production plans on a worldwide basis
 Creating organization structures capable of balancing centralized home-office
control with adequate local autonomy
 Extending HR policies and systems to service staffing needs abroad
 Compliance with Laws and Regulation
 Management changes
 Leadership development
 Workforce training and development
 Adaptation to innovation
 Compensation
 Understanding benefit packages
THANKYOU