Cross Cultural Perspectives
M Viens
ETH/316
November 24, 2014
Aubrey Weekes

Cross Cultural Perspectives

The Walmart Corporation is a large, major, and successful retailer in the United States. Walmart’s attempt at branching out in countries such as China, Mexico, Brazil, and Germany has failed. Globally Walmart is not performing well; they have had difficulties in these countries. Their global revenues, “grew by a mere 1% in 2013, and its revenue per square feet declined by 4.2%” (Team, 2014). The China market does not add much to Walmart’s profits, but it is important to Walmart in regards to enduring perspective. Mexico is a principle global site, but there are many problems there also. In Germany, Walmart failed basically because they thought they could implement American standards in the stores. Walmart is handling these issues, and solving them would be their main concern (Team, 2014).
Walmart Culture Issues Hong Kong, Indonesia, and South Korea are failures for Walmart, mainly due to not adhering to the cultures of these countries, and abiding a code of ethics. A couple of obstacles are food and products were placed on shelves, not in line with the country, and stores were constructed a long distance from the cities making it difficult for people to reach them. Foreign people many of them walk to stores or take public transportation. American people will travel to buy food stocking up for a month or more. Buying in bulk is a major issue in Walmart. Foreign people either walk or take public transportation making it difficult to buy in bulk. Bulk sales are a major issue that Walmart has learned in foreign countries. Foreigners prefer buying their food fresh from the butcher, local markets, or outdoor marketplaces. Walmart is notorious for selling items in bulk (Boyle, 2009). Walmart does not seem to understand cultures in different countries, and they need to abide the laws and standards of other countries. They bring in the American practices, and expect these countries to abide by them which many are unethical to foreign customs. One country that Walmart instituted American standards is Germany. According to Walmart’s code of conduct, associates of Walmart are to smile at all customers while bagging the purchase. Smiling at customers is not natural in business and created misunderstandings as German people thought the associates were flirting with them. Walmart also gives motivational meetings that end in a “Walmart, Walmart, Walmart” chant at the end (Kwintessential, 2014). German people found this strange, and useless. These issues aided Walmart into changing their policies and practices in the stores. The daily meeting was also reduced worldwide, first to once a week, then to once a month, and now they are optional (Landler,2006). Walmart pulled out of Germany during 2006. Associates are stakeholders that need to be treated with respect as they are the people that customers come into contact with daily. Stakeholders are customers, associates, suppliers, and shareholders, and each has a code of ethics, which should practice honesty, and exhibit integrity. Walmart has also found that ethical issues have become clear. Foreign customers found it unethical in the way employees handled the produce, and they see it as a health risk (Lutz, 2013). In these countries, Walmart employees do not handle produce; they put the manufacture crates directly on shelves. The New York Times did an investigative piece and exposed a $24 million in bribes to some bureaucrats to bypass laws, policies, and receive permits to build other stores. Allegedly, the CEO H. Lee Scott and other executives knew of this and tried to hush it up. “This looks lid a comprehensive failure on the part of the Walmart board,” says the Mission Center for Corporate Governance at Yale” (Foroohar, 2012). This type of practice according to The Times does not end there in Mexico. Other countries have corrupt and bureaucrats that seek out to bribe organizations. There is a Global Anti-Corruption Policy that prohibits corrupt payments whether it is dealing with government officials or individuals (Walmart, 2014), which also includes, improper payments whether it is receiving or paying bribes, giving or offering anything of value.
Solutions
Walmart needs to create a strategy with solutions in order to stay viable in the foreign markets. A major solution is research the countries of its cultures, and customs, this would help eliminate issues. Hire an executive in the country expanding into; take American executives on tours of the country and businesses to understand the culture and customs. Understanding cultures can eliminate issues, such as customers misinterpreting a gesture of smiling for flirting. Also, associates will be more comfortable in their environment without American policies. The everyday low price strategy has been successful worldwide except in China where they find it to be cheap, and unsafe. A solution to this is for Walmart to get over its big box look and customize stores in the Chinese market, and still maintain the everyday low price strategy (Team, 2014). I believe that the solution is to make sure all stakeholders are happy and to do this an organization needs to be fair to all parties. Customers will enjoy shopping when the encounter friendly and helpful employees. Employees should receive a wage that does not create hardships, or feel threatened in any way when at work. Suppliers need to trust the organization to be honest and fair.
Conclusion
Some perspectives have been damaging to Walmart, and they have taken steps to correct them. Some practices are not unethical by American standards, but are considered unethical in foreign countries, which have been addressed. Walmart has changed many of their policies and needs to continue to learn that to do business in other countries they must follow the laws and cultures of each country. Walmart is surrounded by controversy from unethical behaviors, concerning ethics, bribery, and cover-ups. The downfall of Walmart in some foreign markets has been the disregard of the countries customs, cultures, and understanding that foreigners have a higher code of ethics than American standards. It is important to recognize the customs and cultures of foreign countries as it determines the success of an organization. Most important is Walmart needs to remember their stakeholders can either make or break them.

References:
Boyle, M. (2009, Oct). BloombergBusinessWeek. Retrieved from Wal-Marts Painful Lessons: http://www.businessweek.com/managing/content/oct2009/ca20091013_227022.htm
Foroohar, R. (2012, May). Time. Retrieved from Walmart's Discounted Ethics It's Mexican bribery scandal shows the perils of bowing to local "custom": http://content.time.com/time/magazine/article/0,9171,2113176,00.html
Kwintessential. (2014, November). Retrieved from International Retail and Cross Cultural Issues: http://www.kwintessential.co.uk/resources/retail-cross-cultural-issues.html
Landler, M. B. (2006, August). New York Times. Retrieved from Wal-Mart Finds that its Formula Doesn't Fit Every Culture: http://www.nytimes.com/2006/08/02/business/worldbusiness/02walmart.html?pagewanted=all&_r=3&
Lutz, A. (2013, Octtober). Business Insider. Retrieved from 4 Countries that Wal-Mart has Failed to Impress: http://www.businessinsider.com/countries-
Team, T. (2014, April). Forbes. Retrieved from Challenges Wal-Mart Faces in Mexico and China: http://www.forbes.com/sites/greatspeculations/2014/04/02/challenges-wal-mart-faces-in-mexico-and-china/
Walmart. (2014, November). Retrieved from Ethics and Integrity: http://corporate.walmart.com/our-story/ethics-integrity