Wal –Mart Corporation was a good example of exportation of culture from the United States to another foreign country where business was started. The strategies used by Wal-Mart in the United States could not just work in Germany because the customers did not find the culture appealing. The “ten foot attitude” strategy adopted by the employees of the company was a complete turn off to German shoppers. Food shoppers did not just like the idea of the employees to handle their purchases. Wal-Mart did not allow workplace romances and this did not go well with German employees as they are used to the practice in their culture. Executives of the company did not act swiftly on the impact of culture. They finally decided to put in place German speaking managers in the key positions. The exit had to be effected when competition from German retailers became unbearable and the company was losing out in the market (Schaefer, 2009).
After getting out of Germany, Wal-mart sold some of its facilities to South Korea but they were never appreciated by customers. This is because the warehouse stores of the company did not match the elegant retail stores that customers are used to in Korea. From the lesson learnt from German and South Korea, the company has resolved never to impose local cultures to foreign markets. Culture is now a very important aspect of strategic decision-making process in the company.
An analysis of the case of Wal Mart, there is evidence that it is very hard to change the culture that people are used to in a particular society. The society in Germany was characterized by some specific behavior types. The failure by Wal Mart to recognize the specific behavior types by the German shoppers spelt doom for the company in the market.
It is vital to underscore the fact that most of the shoppers in Germany belong to the dominant culture while at the same time they engage in their own distinctive unique behaviors. In the case of Wal Mart, the small behaviors did not get the attention they deserved. “Frequently, a subculture would develop an argot or specialized language that distinguishes it from the wider society.”(69). It is clear from the case that Wal-mart executives overlooked the existence of the sub-cultures and the impact they could have on customer loyalty and other sales-related factors.
In this case, it is tempting to suggest that Wal-mart demonstrated an ethnocentric attitude, particularly in the German market. “The ethnocentric person sees his or her own group as the center or defining point for culture and views all other cultures as deviations from what is the normal.”(71). This was illustrated in the rejection of workplace romances amongst German employees. It was like in the United States, this is unacceptable therefore it went against the norm. The reason for the failure of Wal-mart in Germany was therefore cultural based. The company had to pay heavily for its failure to recognize that cultural variations exist and the patterns of behavior in the United States could not suit the shoppers in Germany.
The worse strategic blander that was made by Wal-mart was to try to transfer the culture of the United States to a country like Germany. This should never have been done because it is fundamentally the cause of its failure and eventual exit from the market. After setting up a business in Germany, the executives of the company should have taken a very short time to study the sub-cultures in Germany. This should have been followed by an adjustment approach to conform to the cultures so as to impress the shoppers and hence earn their confidence.
Cultural relativism is an important tenet that would have facilitated the survival of Wal-mart amidst cultural diversity in Germany. Researchers have indicated that “cultural relativism places a priority on understanding other cultures rather than dismissing them as strange or exotic” (72). The rejection of some of the subcultures amongst German employees and shoppers is something that should have been avoided if the company had a desire to thrive in the market. It is clear that the lack of cultural relativism led to a negative attitude amongst the German clerks and hence their lack of motivation to drive the company to its expectations.
Another important thing concerns the response of the executives of the company to the cultural changes that were being witnessed (Schaefer, 2009). The variations were sending out a clear signal but it was ignored. If the executives could have reacted swiftly and met the cultural desires of shoppers then the business would have competed effectively in Germany.
From Germany, a suitable market should have been researched before selling the facilities of the company. It is very clear that the sale of Wal-mart’s facilities in South Korea was ill-advised.
In conclusion, it is vital to mention that Wal-mart made serious mistakes by ignoring cultural variations in Germany. It is important that the corporation realized the mistakes and has paid more attention to culture in its future investment endeavours
Schaefer, R. (2009). Sociology: A Brief Introduction (8th Ed.). New York: McGraw Hill. P.68-72.
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