Cross Cultural Issues, Walmart in South Korea Essay

1188 Words Aug 11th, 2010 5 Pages
CROSS CULTURAL ISSUES WALMART IN SOUTH KOREA
Wal-Marts venture into South Korea is yet another example of a company attempting to duplicate its strategies and business model unsuccessfully. Wal-Mart didn’t consider how the vast differences in culture could affect their survival and ultimately let their complacency, conservatism and conceit get in the way. Their continued losses forced them to withdraw their investment after failing to adapt to the environment, the culture and customer needs. Wal-Mart should have adjusted their leadership style to be able to transcend context as well as engage in cultural sensitivity by localising their business to suit consumer preferences. More knowledge of the environment and competition could have
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They lacked in cultural sensitivity or empathy i.e. the awareness of and honest caring for other cultures (Derskey & Christopher 2008). They therefore didn’t understand the culture and it cost them money and opportunities which lead to a 9.9 billion net loss and withdrawing from the country (Sang Hun 2006). Not enough strategic planning was undertaken in order to assess just what these demanding consumers required and they therefore weren’t a desirable shopping venue for the South Koreans. Even after 8 years of operation, Wal-Mart were still unable to fix the major problems the company faced. They were still not able to provide consumers with what they wanted and had no choice but to sell their subsidiary to their major competitor.
South Koreans cultural dimensions differ largely from the US. According to Hofstede’s models South Koreans cultural dimensions are uncertainty avoidance, collectivist, and long term orientation. The US dimensions include individualism, masculinity, and they have low rankings in uncertainty avoidance, long term orientation and power distance (Hofstede 2009). These differences mean that negotiation factors, communication, leadership techniques and issues such as time must be dealt with differently in these cultures. It shows that greater planning and understanding needs to take place in order to successfully penetrate different regions as they have vastly different values, needs and
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