...International Organization and Management Term paper Wal-Mart’s culturally and institutionally flawed entry into the German retail market Joakim Holsten Leren s105710 Julianne Øien s106222 Mirko Wichmann s145433 Lara-Caterina Buggert s145400 Eloise De Bont s145611 22 pages Table of Contents Introduction 2 Case presentation 2 The Wal-Mart concept 3 Institutional challenges [to be deleted] 4 Cultural challenges [to be deleted] 4 German market 5 Theoretical Background 5 The cultural perspective 6 The institutional perspective 9 Case Analysis 12 The cultural perspective 12 The institutional perspective 15 Recommendations 19 Cultural 19 Institutional 20 Limitations 22 Cultural 22 Institutional 22 Conclusion 23 References: 25 Introduction The purpose of this paper is to address and analyze the challenges Wal-Mart faced during its entrance into the German market in the late 1990s. We have analyzed this with the following problem in mind: “Which aspects, both cultural and institutional, led to Wal-Mart’s failure in Germany and what should they have done instead?” We will approach this problem by outlining theoretical frameworks for analyzing cultural and institutional aspects of a company. We will then employ said theories in order to analyze the case of Wal-Mart’s failure in Germany. Finally, we will come to a conclusion concerning what they should have done as they entered into the German market. Different forms...
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...times per week at more than 8,416 retail units under 53 different banners in 15 countries. With fiscal year 2010 sales of $405 billion, Wal-Mart employs more than 2.1 million associates worldwide. Nearly 75% of its stores are in the United States (“Wal-Mart International Operations”, 2004), but Wal-Mart is expanding internationally. The Group is engaged in the operations of retail stores located in all 50 states of the United States, Argentina, Brazil, Canada, Japan, Puerto Rico and the United Kingdom, Central America, Chile, Mexico,India and China Wal-Mart’s entry and operation in Germany Wal-Mart’s initial entry into German market was through the acquisitions of renowned 21 store Wertkauf chain for an estimated $1.04 billion in December 1997.It was followed one year later by the acquisition of In-terspar’s 74 hypermarkets from Spar Handels AG, the German unit of the French Intermarché Group , for €560 million. Thus Wal-Mart immediately became the country’s fourth biggest operator of hypermarkets. However, with a turnover of around €2.9...
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...Journal of Comparative International Management 2009, Vol. 12, no.2, 73-89 ©2009 Management futures Printed in canada Cross-cultural Communication and Multicultural Team Performance: A German and American Comparison by Steven W. Congden University of Hartford, U.S.A. Alexei V. Matveev College of Staten Island – CUNY, U.S.A David E. Desplaces College of Charleston, U.S.A. This study builds on work by Matveev & Nelson (2004) which investigated the relationship between cross-cultural communication competence and multicultural team performance using American and Russian managers. This study examines the impact of national culture on German and American subjects. While a relationship between cross-cultural communication competence and multicultural team performance was found, it did not differ by overall national culture. Of the four dimensions of cross-cultural communication competence, only Cultural Empathy was found to be significantly different between Germans and Americans. No differences were found for the dimensions of Interpersonal Skills, Team Effectiveness, and Cultural Uncertainty. 1. Introduction Worldwide intercultural cooperation drives corporate growth and development across the globe resulting in a heightened demand for a qualified but diverse workforce. researchers have documented that the successful performance of multicultural teams is a vital and contributing factor to organizational success (Jackson, may, & Whitney, 1995; Snow, Snell, davison, & hambrick...
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...The used change model The deal to a merger between two of the giants are remarkable achievement. There are no cultural differences. "Although the integration of the team spent after the merger of DaimlerChrysler, several million dollars has work on cultural sensitivity seminars for their staff on topics such as sexual harassment in the American and German restaurants etiquette, larger errors in business practice and management settings remain unchanged. So both brands could contain preserved different cultural class: • James Holden, the President of Chrysler from September 1999 to November 2000 described what he saw as "married up, marry down" phenomenon. "Mercedes, perceived as a fantasy, a particular brand, and Chrysler, Dodge, Plymouth and...
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...Germany: A Case Study in Cross-Cultural Management JAMES R. LINCOLN, HAROLD R. KERBO, and ELKE WITT'ENHAGEN* From a series of qualitative interviews with Japanese managers and German managers and workers in thirty-one Japanese-owned companies in the Dusseldorf region of western Germany, this article discusses differences in cultural patterns and organizational styles between the German and Japanese employees and the problems these pose for communication, cooperation, and morale. First, we deal with cultural contrasts: language issues, interpersonal styles (personability and politeness), and norms regarding the taking of responsibility. Second, we examine the impact on cross-nationality relations of established organizational practice: for example, German specialism vs. Japanese generalism; direct and vertical vs. indirect and incremental decision making. We also discuss efforts by these firms to find compromise systems that would meet the needs and interests of both sides. The third focus is the reactions of Japanese companies in North Rhine-Westphalia to German unions, works councils, and codetermination regulations. In the labor view, Japanese firms overall do no better or worse than comparable German firms. Japanese direct investment in Western economies is concentrated in North America and the United Kingdom. In consequence, a rich journalistic and scholarly literature examines the Japanese experience in the Anglo-American countries, the management styles and organization structures...
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...| Introduction: Definition Cultural Diversity From our increasingly diverse domestic workforce to the globalization of business, cultural competence is arguably the most important skill for effective work performance in the 21st century. According to de Woot (2000), companies in the industrial, financial and service sectors have to cleared most obstacles in the globalization process: that of size, that of time, that of complexity, and finally that of information and communication. Because of the differences in cultures, there might be some kind of misunderstanding among people working in the same organization due to their different values, beliefs, backgrounds, etc. To avoid cultural misunderstanding and turn cultural diversity to advantage, in this workshop we will provides a general definition for “culture” as well as for “diversity”, discusses the benefits of diversity in the workplace, the challenges of managing a diverse workplace, and presents effective strategies for managing diverse workforces. Definition of culture According to Kroeber und Kluckhohn (1952, p. 357) “Culture consists of patterns, explicit and implicit, of and for behaviour acquired and transmitted by symbols, constituting the distinctive achievement of human groups,.., the essential core of culture consists of tradition, ideas and their attached values, culture systems may considered as products of actions and also as conditioning elements of future action” Furthermore, managers often see...
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...Cultural Challenges When Entering the Global Market Prepared by: Dennis M. Reilly, Regent University, LDSL 724, Cultures & Values I. Executive Summary Globalization can be defined as the inevitable integration of markets, nation-states, technologies and people in a way that is enabling individuals, organizations and nation-states to reach around the world farther, faster, deeper, and cheaper than ever before. Culture has become a highly significant factor in determining the success in today's international business environment. In particular, organizations entering the foreign markets either by expansion or mergers and acquisitions (M&A’s) are known to suffer at a high failure rate due to not understanding and preparing for cultural differences. Studies suggest that failure is due to different and often controversial relationships between cultural differences, integration and performance. The purpose of this white paper is to examine the cultural concerns when American corporations/organizations enter foreign markets and the impact cultural understanding or the lack thereof has on their success or failure. II. Culture “Culture is not only all around us but within us as well”. Each individual within an organization comes with a unique background and culture. Culture can be defined as the blending of values, politics, beliefs, behaviors, customs and attitudes that distinguishes one society from another. Since culture is a learned behavior that encompasses...
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...INDIVIDUAL ASSIGNMENT Topic: Build a strategic HR management program for a German company in which most employees are Christian. Nowadays, business becomes internationally over the world. People can come a foreign country and setting up their business activities oversea. There are a lot of important matters that need to be considered before opening business in the foreign country. Human resource management (HRM) is one of such important matters that essentially contribute to the furture business success. Building a strategic HRM program will be very neccesary from the start for business establishment. The HRM shall be discussed in the following paragraphs, especially for a German company. Summary instroduction about Germany Germany covers an area of about 357,000 square km in the central part of Northern Europe. The German population is estimated at 80.5 millions. Christianity is the dominant religion, with 65 to 70 percent of the population. The official language is German. Germany was a founding member of the European Community in 1958. It is part of the Schengen Area, and has been a member of the eurozone since 1999. It is a member of the United Nations, NATO, the G8, and the G20. Germany is a highly developed country in the EU. Germany in Hofstede cultural dimensions According to Hofstede model, Germany has cultural dimensions such as: low power distance, high individualism, high masculinity, high uncertainty avoidance and high longterm orientation...
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...1.Introduction BenQ, a Taiwanese-based company, grabbed the international headlines on June 7, 2005, when it acquired the money-losing mobile phone division of Germany’s Siemens and launched the brand, BenQ-Siemens. Subsequently the acquisition proved to be a strategic mistake, as the two companies could not successfully integrate. This article tracks BenQ’s acquisition of Siemens, from the perspective of BenQ, through a qualitative case study. The analysis focuses mainly on culture and communication issues in what became an unsuccessful acquisition. The results indicate that the German Siemens and Taiwanese BenQ are different in important ways, from national culture to organizational culture. BenQ’s failed acquisition of the Siemens handset was a wakeup call, providing a valuable lesson to other companies planning to create their own global brand recognition. The issue here is the extent to which the two companies’ incompatible cultures made it unlikely that they could add value and create synergy. This study concludes that an international merger and acquisition has a better chance of success when managers consider the host country’s culture and allocate enough time and resources for assimilation. Furthermore, managers need to communicate and clearly define objectives and performance expectations during the integration and implementation process. Taiwan has spawned many top-tier electronic component...
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...Culture Impact on German Negotiation Style Chen Shuqi SEIB Abstract As the increasing frequency of international trades， international negotiation skills draw a lot of attention. Regarded as a major barrier for cross-cultural communication, understanding culture difference is of signification . This essay will firstly introduce the study history and relevant definitions of international negotiation and how culture factors impact on negotiation style. Considering the gradual closed trade relationship between Germany and China and the commonly acknowledged differences of national cultures between them, this essay would firstly analyzes images of Germans for the general Chinese in a book, Die Langnasen . Further, it clarifies German negotiation style basing on analysis from Hofstede's cultural dimensions theory. We find out that some of German business behaviors from the theory don’t fit with our general impression as the book concludes. After discussion about the deficiency of the theory or possible stereotype of the book, we try to present a modification of the prevalent impression about German negotiation style, and give some suggestion about how to carry out a better international business negotiation with Germans. It may be possible to provide us a better understanding in successful negotiation process with Germans. Key words: International negotiation, German culture, German negotiation style 德国文化对其谈判风格的影响 陈舒祺 国际商务英语学院 2011级国际商务管理 摘 要: 随着跨国贸易的频率迅速增长，国际商务谈判技巧尤为重要。...
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...Individual Written Case Study Report in Strategic Management IHS-3-422 London South Bank University 17/12/2003 Table of Contents List of Figures................................................................................. i Introduction ................................................................................... 1 1. The changing world automobile industry .............................. 1 2. Reasons for mergers and acquisitions .................................. 3 2.1. 2.2. Daimler-Benzs’ motives..................................................................... 3 Chryslers’ motives ............................................................................. 5 3. The Post-Merger Integration Structure................................... 7 3.1. 3.2. 3.3. Preparations for the merger .............................................................. 7 Integration Structure of DaimlerChrysler......................................... 7 Expected Synergies ........................................................................... 8 4. Cultural Issues ......................................................................... 9 4.1. 4.2. 4.3. Daimler-Benz’s Culture...................................................................... 9 Chrysler’s Culture ............................................................................ 10 Key Integration Problems and Post-Merger Business Culture .... 11 5. Used Management Approaches to solve the problems ...... 13 Recommendations...
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...When we say German GAAP, we refer to principles that are based on German Commercial Code (Nandelsgesetbuch, or HGB), and German Accounting Standards (GAS) that are set by German Accounting Standards Committee (GASC). GASC has similar function as Financial Accounting Standard Board (FASB) in United States – to develop and set accounting reporting standards, the process which includes publication of draft of standards, comments period, revision of draft period, public discussion, and finally, adoption of new standards. Germany has two entitles that serve as an enforcement mechanism of financial standards and as a mechanism that review and examine accounting standards in Germany – Financial Reporting Enforcement Panel (FREP) and Federal Financial Supervisory Authority (FFSA). In United States, enforcement mechanism of accounting principles is U.S. Securities and Exchange Committee (SEC). SEC’s mission is “to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation”, so the enforcement of accounting principals is only part of the SEC’s job (SEC, 2014). IFRS or German GAAP? Although Germany requires to use IFRS for publicly traded companies, German companies still have to use GAS for separate financial statements of publicly traded companies, and for any non-publicly traded company. That is because German taxation system is interconnected with GAS, and German tax law have not been renewed to reflect changes brought by IFRS. While modernization...
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...and sold 4 million cars and trucks in 1998. Schrempp and Eaton jointly led the merged entity, as co-chairmen and co-CEOs. | | DCX sources were confident that the new company was well poised to exploit the growth opportunities offered by the global automotive market in terms of geographical and product segment coverage. (Refer Exhibit II for Daimler Benz and Chrysler's product ranges) | However, analysts felt that to make the merger a success, several important issues needed to be addressed. The most significant of these was organizational culture. German and American styles of management differed sharply. A cultural clash would be a major hurdle to the realization of the synergies identified before the merger. To minimize this clash of cultures, Schrempp decided to allow both groups to maintain their existing cultures. The former Chrysler group was given autonomy to manufacture mass-market cars and trucks, while the Germans continued to build luxury Mercedes. However, analysts felt that this strategy wouldn't last long. When Chrysler performed badly in...
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...International Journal of Business and Management; Vol. 7, No. 16; 2012 ISSN 1833-3850 E-ISSN 1833-8119 Published by Canadian Center of Science and Education Cross-Cultural Etiquette and Communication in Global Business: Toward a Strategic Framework for Managing Corporate Expansion Ephraim Okoro1 1 School of Business, Howard University, Washington, USA Correspondence: Ephraim A. Okoro, Department of Marketing, School of Business, Howard University, 2600–Sixth Street, NW, Washington, D.C. 20059, USA. Tel: 1-202-806-1545. E-mail: eaokoro@howard.edu Received: March 22, 2012 doi:10.5539/ijbm.v7n16p130 Abstract The expanding scope of business corporations in the first decade of the twenty-first century is drawing much scholarly attention, and the trend has been described as a fact of life that defies the stretch of human imagination. The concept of global economy has expanded consumer awareness, defined new standards and rules of operations, and increased the need for national and corporate interdependence. Multinational organizations are exploring opportunities around the world, demonstrating sensitivity towards cultural differences in order to gain from the proliferation and growth of international enterprise. Recent studies indicate that while some corporations compete successfully in the global marketplace, others have failed to sustain their competitive advantage because of cultural imperialism or inadequate acculturation of their managers on international assignment...
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...We must realize that we do not exist within a bubble. With the rapid advance of technology the world is getting smaller. More and more organizations are taking a global approach to their businesses, expanding not only their reach but their footprint as well. This forces organizations to tailor their method of doing business to a certain degree to the area in which they are doing business. Culture plays a large role in the motivational scheme, weather you look at America as a salad bowl or a melting pot the country has applied its own influences upon different ethnic groups as to what works for motivation and what will not. Knowing this now tells us that we must examine what works for the cultures in the purest sense on their original soil. This will not only help us in the sense of a global expansion, it will allow us a basis of comparison back at home as well. In recent years when someone mentions manufacturing, invariably China comes to mind. This manufacturing powerhouse boasts a labor base of almost 1.3 billion people. With a limited infrastructure they have been able to undercut most developed countries bids when it comes to manufactured goods. When it comes to motivation the strict structure of the government and more importantly Chinese culture come into play. It has been noted that while China focuses on moral motivators for the average worker, “that extreme reliance upon nonmaterial incentives causes morale and production to suffer” (Riskin, 1973). As the...
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