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 …show more content…
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
Cultures around the world are divide by their distinctive characteristic of people, and how people interact within their society. Most cultures are driven by the way their environment has been set for them. Many of cultures have to adapt to the way their environment are due to the conditions that are set for them and the amount of resources that they are provided. The biggest drive for culture are the historical custom. Most countries continue to carry their ancestor custom so that the tradition may stay with them throughout their years, in which making other countries distinctive from one another. One of the particular country that will be discuss in this report is North Korea. In this report, I will be discussing the North Korean culture, with describing their living condition in the country, common issues that they face with on a daily bases, and common threat that they pose on other countries.
Its size, power, and low prices are what make Walmart so helpful to America. So why do some people think that Walmart is so bad for the American people? Many people believe that this is a true debate. Everyone has his or her own point of view. If you think about it, is Walmart really good for America? Walmart has made many changes since it was first opened in 1962, by Sam Walton. By August 31, 2014 there were 11,095, retail Walmart stores and there were 642 Sam's Club's. After going over all the facts, Walmart is good for America.
Walmart faced strong entrenched competition in Canada and Europe. In these developed countries, they couldn’t gain critical mass through internal growth, so they had to acquire companies that have been in the market already. They acquired Woolco, a money losing operation, applied many of the American business practices, and within a few years, the Canadian operations were successful. They have 317 stores, and they account for more than 35 percent of the Canadian discount and department store market. In Europe, Walmart entered Germany by acquiring the Wertkauf hypermarket chain in 1998 and entered the UK by acquiring the 229-store ASDA group. They the leader and are now losing ground to Tesco. A major problem for Walmart in the European market is overexpansion. Accompanied with the famous “Always low prices” approach, they met large resistance from the competition and regulators. Large price wars began because Walmart was accused of underselling the competition. They struggled to build a strong competitive base in German losing more than $1 billion. They were unable to create a competitive advantage, so they sold their operations to a competitor, Metro. They also faced problems in Korea, so
Kim, J., & Zhong, Y. (2010). Religion and Political Tolerance in South Korea. East Asia: An International Quarterly, 27(2), 187-203. doi:10.1007/s12140-010-9112-1
Within less than 30 years, Wal-Mart had transformed from a small rural retailer in Arkansas into the largest retailer in the U.S. In order to continue this rapid growth, the company had started to pursue international expansion grounded in the belief that the firm’s business model of offering quality products at low prices and great customer service would appeal to consumers everywhere around the world (p.8)[1]. China was of particular interest in going international as Wal-Mart’s top management held the opinion that it was the only market in which the firm’s success story in the U.S. could be repeated (p.2/8). However, in 2005 (nine years after its
to see where the company is now with the use of a brief Swot analysis.
Being such a large company with many stores and employees Wal-Mart faces many issues. Some of the issues the retail giant faces are; wages, gender discrimination, and health benefits. It seems too many that Wal-Marts has lost its way. When the recession hit Wal-Mart laid off many of its employees and because of that consumers feel the shelves are not being restock and they can’t find what they are looking for. According to Bloomberg Business Week Wal-Mart went from having 343 employees in a store in 2008 to 301 employees in a store in 2013. Even though the employee cut seems logical it is costing the retail giant business. There is no man power to keep the shelves stock and give customers the great customer service that Sam Walton envisioned. (Bloomberbusinessweek)
Understanding how North Korea as a country defines itself in a changing world. Where do they derive their customs and practices, political standings and military power? Define North Korea’s history leading into the modern age and define its culture and characteristics and how they interact with the world today. Understanding a subject as broad as the term culture begins where the culture began with the birth of civilization and the people that influenced it. There are many factors that play a role in the shaping of a nation none so much as turmoil and conflict and the Korean peninsula saw its fair share for the better part of a millennia. A complete statistical breakdown of North Korea shows a struggling nation that strongly depends on
 Illustrates low prices and at the same time, not portray a cheap image to consumer.
When you talk about Wal-Mart the first thing that you have to remember is that they are the largest retailer in the world. Wal-Mart employs more people in the United States than any other company and is second only to the federal government in the number of employees that they have on the payroll. These are important facts to consider in that due to their tremendous size, Wal-Mart has an enormous
Culture and the environment affect a business in many ways. Culture is not simply a different language, a different shade of skin, or different styles of food. Culture, and the environment in which you are a part of, affect the running of day to day business operations of all companies’ day in and day out. This paper will assess how Linda Myers, from the article, “The would-be pioneer,” (Green, S., 2011) was affected by the huge culture shock of working for a global conglomerate from Seoul, South Korea. We will discuss what went wrong with Ms. Myers approach to business, Hofstede’s five dimensions of culture as it
Wal-Mart did not take the time to learn the dominant ideology of Germany with their cultural beliefs and practices. If Wal-Mart would have done extensive research in Germany and their culture before building any Wal-Mart centers in Germany, they would have found that Germany culture is much different from American culture. For example, Germans did not like anyone placing their goods into bags; they wanted to place their own goods in the bags themselves. Wal-Mart would have also found out that the pillowcases in Germany are a different size than in America (Schaefer, 2006, pg. 25-27). Knowing what your customers need and their wants is the first step to success.
WalMart's approach to global expansion exemplifies the journey of self-discovery many corporations who have a stable, profitable domestic base of operations go through as they attempt to enter new markets globally. For WalMart this meant confronting the exceptionally high level of ethnocentrism in their organization while also using their analytics-based prowess to better understand cultures, not just costs and profits (Ming-Ling, Donegan, Ganon, Kan, 2011). The intent of this analysis is to define how WalMart overcame a significant series of challenges and successfully launched into China, overcoming an ethnocentric mindset and tendency to rely too much on analytics alone in guiding global expansion.
Chuang, M., Donegan, J., Ganon, M. and Wei, K, 2011, Walmart and Carrefour experiences in China: resolving the structural paradox, Cross Cultural Management, 18(4), pp.443-463.
South Korea appears in the first quadrant of Figure 2.2 in which states that the country has a culture with relatively larger power distance and lower individualism. South Korea has a relatively large power distance due to the country’s strong emphasis in respecting for one’s elders and superiors. This cultural belief is deeply