Wal-Mart Companys Cross Cultural Communication

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Table of Contents

Case Summary
Cross-Cultural Aspects
Cooperative strategies
Low and High Context Cultures
Decentralization and centralization and the aspect of power
Motivation Systems
Recommendations
Conclusion
Reference List

Case Summary

The case involves the challenges associated with Wal-Mart, an American retail chain, in China (Chen 2013). Primarily, cultural differences in business practices between China and the US have been a challenge to Wal-Marts operations in China. The company replicated its corporate culture of the low-cost, high -bulk model to a high-cost Chinese market. This aspect seems to have failed as the company has been faced with many challenges relating to labor, remunerating, and even pricing of its products (Chen 2013). That is, it emphasizes more on meeting the desires and needs of consumers and not its employees. This is different from the Chinese culture.

On top of emphasizing conscientiousness to better service, the Chinese leadership, emphasizes service to the people. Wal-Mart emphasizes customer service. For instance, it pays its employees low salaries and does not recognize union leadership (Chen 2013). This is not welcome in China. As it has been the genesis of inequality, tensions around labor, workplace rights (Chen 2013). This system of operation has resulted in one of the labor activists called Wang Shishu led demonstrations in order to convince the management not to cut the pay of the employees. This is what led to the strike involving about 40 workers at the coastal Shenzhen branch (Chen 2013). Again, due to this demonstration, about four workers were detained and dismissed from Wal-Mart. These aspects have characterized its operations in China.

Cross-Cultural Aspects

Hurn and Tomalin (2013) indicated that in order to succeed in global business, it is not sufficient to just have a great idea or saleable product, one must also consider the cultural values, business practices, negotiating techniques, and behavior styles of the host nation. This brings the question as to why corporations such as Wal-Mart choose to internationalize when they know too well that they are going to encounter cultural challenges. Foreign markets are opening up great opportunities, and companies are seizing it not only to promote their brands but also to increase sales (Hofstede 2001). Because these companies have their own internal cultures that are well established, local cultures like in the case of China add some dimension to their operations, making it hard to adjust. In this case, the businesses must assess if their internal cultures are adequate to solve the challenges associated with diverse cultures (Moran, Harris & Moran 2011).

Cooperative strategies

The unites States strongly emphasizes masculinity and individualism (Hofstede 2001). That is, American managers rely on their own views or opinions to deliberate on what should ad what should not be done. American managers tend to keep things within and also like working alone. Furthermore, they place a lot of stress on independence, an aspect that is also enhanced by their masculine culture (Gesteland 2002). This kind of culture considers cooperation or collectivism as an indication of weakness. On the other hand, Chinese culture is so strong when it comes to feminism and collectivism. Work in the Chinese context is dependent on institutions, teams, and groups. Chinese managers reduce responsibilities and also avoid by cooperating with others.

Low and High Context Cultures

A useful distinction regarding this aspect is drawn by Edward hall (Hall 1979). The United States is a low cost culture and China is a high cost culture (Behfar, Kern & Brett 2006). According to Edward hall, organization must always be conscious that, when high and low cultures meet, challenges will always emerge. The model helps in explicating why Wal-Mart, a low cost culture organization failed significantly in China, a High cost culture. For instance, instead of pricing its products reasonably high in China, Wal-Mart replicated its US culture and priced its offerings very low. Not enough, it workers were also paid much less. These aspects could not work in a high cost Chinese culture. Supporting the idea of hall, Hofstede established in his studies that national cultures have impacts on an organizations workforce. His conception clearly gives an explanation as to why Wal-Mart failed in China. It is because it forced its Westernized norms on the socialized Chinese market.

Decentralization and centralization and the aspect of power

Hofstede studies on regional and sub-cultural variations, differences between industries and differences resulting or presented by the culture of an organization (Hofstede 2001). It is in this context that the aspect of power distance emerged. China is more heterogeneous and supports decentralization process, America, on the other hand, is more homogeneous and supports centralization process. As such, Chinese managers demand for more powers because of their extensive networks. Americans, on the other hand, do not ascribe to the power distances idea. This is because with a centralized management process, supplier-network is moderate, hence no need for more power (Hofstede 2001). In other words, because Chinese people like to have powers, Wal-Mart failed by failing to adopt the power distance model of Hofstede. The model would have helped in determining the cultural difference thereby enabling the company to position appropriately in the Chinese market.

Motivation Systems

In the American context, a lot of stress or motivation is placed on the achievement of individuals (Berry, Poortinga, Brugelmans, Chasiotis & Sam 2001). In other words, the success of a person is dependent by their efforts and not the efforts of other people. The American value system encourages competition, individual goals, and also recognizes individual contributions and achievement. The American system also recognizes performance-based pay systems (Hofstede 2001). That is, an individual is remunerated individually based what is attributed to him even if he may have been helped by other people. It is based on these systems that are employees are given salary increments and promotion (Lewis 2006). That is why most of its employees in China are complaining. This is because they want collective bargaining agreements which the company does not recognize.

Hofstede (2001) indicated that collectivistic cultures support cooperation, group goals, and interdependence. Therefore, they support arrangements that enhance collective agreement. The Chinese people highly support group devotion. Unlike Americans, Chinese believe that success of an individual stems from a group or team work. As such, motivation or rewards must be collective and not individualized (Hofstede 2001).

The principle of fairness is espoused in their system of motivation. For instance, when setting wages, salaries, and other perks, organizational leaders in China usually emphasize academic qualifications and working experience of workers. When it comes to promotion, factors such as interpersonal relationship and political affiliations are given more attention. Wal-Mart does not consider all these factors but emphasize on individual performance. The salary and reward system is also based on individual efforts.

Recommendations

In this case, the problem lies with the human resource mangers in Wal-Mart. The HRM failed to take into consideration the local Chinese culture. Hofstede held the view that culture is the aspect that helps in distinguishing the different people that exist in the society (Hofstede 2001). Being a global organization, Wal-Mart should comprehend the local Chinese culture if it wants to stay ahead of other retail chains in the Chinese market. In international business, understanding the cultural aspects that determine the association between an organization and its stakeholders (customers, employees, and shareholders) is very important (Hurn & Tomalin 2013). The company should also know its value supposition. This comprises its offerings, the likely challenges in an international market, employees, and work environment. It is an important aspect in the globalization process. In this case, Wal-Mart faced the challenges because it failed to ask itself why it was facing such a problem.

Conclusion

As it has been seen, through applying different theories and models, a cultural comparison between China and America can easily be determined. In nearly all aspect of culture, the two nations differ significantly. From this cultural comparison, several findings have been noted. To begin with, American business leaders emphasize contractual safeguards whilst Chinese business leaders favor cooperative approaches. When it comes to conflict resolution, American business leaders tend to like direct means but Chinese managers favor indirect means or simply thirty parties like trade union representatives. In terms of risk, American business leaders do like making decisions that are risky but Chinese business leaders do not like arriving at decisions that are risky. In general, when it comes to employee issues, Chinese managers favor the policy of collectivism but American managers favor individualistic approaches.

Reference List

Behfar, K, Kern, M, & Brett, J 2006, Managing Challenges in Multicultural Teams. Research on Managing Groups and Teams, Research on Managing Groups and Teams, Vol. 9, pp. 233262. Web.

Berry J, Poortinga, Y, Brugelmans, S, Chasiotis, A, & Sam, D 2001, Cross-cultural psychology: Research and applications, Cambridge University Press, Cambridge. Web.

Chen, M 2013, WalMart Empire Clashes with China, The Progressive Magazine. Web.

Gesteland, R 2002, Cross-Cultural Business Behavior: Marketing, Negotiating, Sourcing and Managing Across Cultures, Copenhagen Business School Press, Copenhagen. Web.

Hall, E 1979, Beyond Culture, Anchor Press, New York. Web.

Hofstede, G 2001, Cultures consequences: Comparing values, behaviors, institutions, and organizations across nations, Sage Publications, Inc., California. Web.

Hurn, B., & Tomalin, B. 2013, Cross-cultural communication: theory and practice. Palgrave Macmillan, Basingstoke. Web.

Lewis, R D 2006, When cultures collide: leading across cultures, Nicholas Brealey International, Boston, MA. Web.

Moran, R, Harris, P, & Moran, S 2011, Managing Cultural Differences, Elsevier Inc., London. Web.

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