Walmart Corporation is one of the largest corporation dealing with retail sales and merchandising. In fact, Forbes Magazine ranked the company as the biggest and most successful retailer and general merchandiser in the US for the year 2009 (Rhode & Paton, 2011). Despite its dominance in the US markets, Walmart has consistently failed to make an impact in other parts of the world. According to pundits, Walmart has for long overlooked the issues of culture that defines a global company(Rhode & Paton, 2011). Cultural relativism defines companies in global markets competing for global market share. However, Walmart has underestimated the issue of culture and consequently flopped in its attempts to become a global company especially when it attempted to make market penetrations in India, Mexico, Germany and Japan(Rhode & Paton, 2011). In this paper, I will explore one of the many cultural issues that has been counterproductive in Walmart’s efforts to become and remain a global company.
Walmart’s Cultural Issue
As elucidated by Swartz &Sherron (2004), Walmart suffers from the challenge of imposing American culture on other countries. Particularly, Walmart has faced criticism of utilizing bulk sales as the main way of increasing its revenues and profitability in other countries. Apparently, American culture revolves around buying goods in bulk whether it is groceries or other products. In foreign cultures however, the company has faced challenges since numerous societies do not buy their goods in bulk making it very difficult for the company to profit from global markets. In line with American habits and culture, Rhode & Paton (2011) articulate that Walmart has gained a reputation of selling goods in bulk even in foreign markets where people are used to buy fresh vegetables, meat and other household items and goods. This is an American culture where people in the US do not use public means and goods to visit malls and other outlets that sell consumer goods. Subsequently, the company has failed to penetrate markets for this precise reason.
The design of the stores that Walmart has erected in different countries also reflect hugely on the American culture. The company has for long been using the same designs in all countries that it seeks to make a market penetration (Swartz &Sherron, 2004). In Korea for instance, where presentation is the main marketing idea of any company, Walmart has been reluctant to change its design of its stores. Instead, the company has utilized the same designs, use the same size and colors contrary to the culture that is pertinent in the society. According to Rhode & Paton (2011), Walmart leaves its stores opened and exposed in the ceiling as it is with other American supermarkets and other shopping. Given the fact that countries such as Korea value artistic designs of the shops and supermarkets, Walmart has been making losses as it attempts to Americanize other markets. The rationale is that people and shoppers in Korea found the designs of the company very unpleasant implying that the company did not attract and retain as many customers as it hoped it would from the onset(Thomas, 2002).
Further, it is important to note that Walmart has not only imposed American culture on the foreign but has also taken business practices and standards to other countries. In the wake of increasing calls for cultural relativism and diversity, the company has continued to bring staff members from its native country. Thomas (2002)posits that the company ought to appreciate and recognize that diversity entails involving the native population in achieving its objectives and business goals. To the contrary, the company has ignored these calls and set up subsidiaries and franchises that rarely recognize the local workforce. Many managers of the company’s franchises across the world experience culture shock (Swartz &Sherron, 2004). It therefore became very difficult for them to operate profitably in seemingly foreign contexts. To that end, it is imperative to mention that Walmart has failed consistently in foreign markets because of its failure to adopt a cultural relativism strategy and instead, impose American culture on foreign markets.
Ethical and social responsibility issues that Walmart should deal with for being a global company
Walmart contends with various ethical issues regarding its cultural issues. Specifically, the company ought to eliminate its policies that require employees to be smiling all the time to the customers. This was a major undoing in its attempt to make a market entry in Germany where people take smiling for flirting(Thomas, 2002). The company lost huge chunks of customers who could have given the company a competitive advantage over its rival. It is unethical for employees to flirt with the customers in German society. Surprisingly, Walmart continues to ensure that the employees utilize this conventional approach of luring customers by entrenching it to its core policies and standards. As espoused by Swartz &Sherron (2004), the company should be flexible in its policies especially when venturing in foreign markets.
In foreign markets, it is unethical to indoctrinate employees with a foreign concept. Thomas (2002)says that Walmart used to hold daily employees’ meetings which ended with people chanting, ‘Walmart Walmart, Walmart’. This was aimed at increasing the morale and motivation of the employees. In contrast, it ended up alienating employees in foreign markets such as Germany and Korea from the company. The reason is that majority of the employees from other countries felt as though the company’s intentions were to indoctrinate them with American products and services. Although the company made radical changes to reduce the frequency of the meetings from daily to monthly and then annually, the damage had already been done. The company ought to adopt ethical ways of motivating employees as opposed to dictating on the employees their culture.
Further, the company has ignored various ethical frameworks that guide and govern global companies. In Korea and Mexico, was accused of undermining the health risks that the store attendants predisposed the local population to (Thomas, 2002). Apparently, shelving in majority of Walmart stores was done by attendants using bare hands. While this is normal and entirely ethical in American context, it is essential to note that majority of the people and societies in foreign markets view it as unethical and bordering irresponsible behavior. Walmart also lacks elaborate corporate social responsibility activities in foreign markets(Rhode & Paton, 2011). Notwithstanding the rise in social issues that affect societies ranging from global warming to poverty, the company lacks any activity that could help it improve its public image and alleviate the conditions of the societies in which its operations are located.
Walmart ought to recognize that cultural relativism typifies global companies. In other words, the company should embark on a strategy of hiring top executives managing different franchises from the local societies. The rationale is that hiring natives will enhance the effectiveness of the company’s major decisions since they will be in synch with the local cultural practices and patterns of interaction. Thomas (2002)posits that Walmart should stop ‘Americanizing’ foreign markets since it only serves to alienate employees and customers of the societies involved. Instead, the company should take up the issue of diversity from its basics and come up with strategies that appreciate other cultures.
In essence, Walmart is one of the most successful retail and merchandising companies in the world. Notwithstanding its success in America, the company contends with issues that has made its vision of venturing in foreign markets elusive. The rationale is that the company has been imposing American culture on other stakeholders located in foreign markets. Ranging from patterns of interaction to discriminating on the patterns of interaction between the customers and employees, the company should eliminate some of its policies that do not appreciate cultural relativism. In addition, the company should hire natives to manage most of its franchises located in foreign markets.
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