Human Resource Management
Walmart Stores Case Analysis
Globalization has revolutionized the way business is conducted worldwide. Barriers to Markets once untouchable, have now opened their doors and many companies have taken this opportunity to expand into those markets in order to gain competitive edge. In large, globalization has helped emerging markets such as Brazil, Russia, China, and India, to bring their countryâ€™s impoverished population up to a decent standard of living.
The main challenge for many organizations as they expand into these markets is how to how to attract and manage global talent ...view middle of the document...
Compare this to the International strategy, the core competencies are centralized and the rest are decentralized. Co-ordination: A high degree of coordination is required in wake of the cross cultural sensitivities. There is in addition also a high need for cultural control. Integrating Mechanisms: Many integrating mechanisms operate simultaneously (MSG experts, n.d.).
Wal-Mart Stores opened its first store on July 2nd, 1962 in Rogers, Arkansas by Sam Walton, a 44 year old man from Oklahoma (Farhoomand & Wang, 2008). Walton saw a need for consumers in rural areas to have access to quality brand name, affordable goods without having to travel miles to obtain them. With that in mind, he began opening stores in these rural areas; an added benefit was the avoidance of head on competition with larger retailers such as Sears and Woolworths. The first year of operation, Wal-Mart had sales of $975,000 (US $); ten years later and publicly traded annual revenues had reached $78 million (US $). By 2005 Wal-Mart reported net sales of C$285 billion (US $) (Farhoomand & Wang, 2008). Wal-Martâ€™s philosophy has been, and still is to offer its customers quality brand name products at discounted prices; their motto is Every Day Low Prices (EDLP). Wal-Martâ€™s success is driven by their culture, low prices and great service.
Wal-Martâ€™s Domestic HRM
Wal-Martâ€™s strategic HRM at home in the U.S. helped to create a happy diverse, union free culture for its employees. Utilizing this strategy helped them to motivate their employees on all levels to perform at their best. This was accomplished through offering a competitive salary, profit sharing plans, promoting from within, encouraging employees to contribute the companyâ€™s initiatives, cross training of employees in different areas, all employees were called associates, and companyâ€™s financial information was shared with the employees. This system built trust and commitment between the organization and its employees (Farhoomand & Wang, 2008).
Wal-Mart in Foreign Territory
Globalization helped Wal-Mart Stores to realize that in order to maintain their competitive edge they needed to enter emerging markets; in 1991 Wal-Mart opened their first store outside of the U.S. in Mexico and by 2005 had a presence in 9 countries. Wal-Mart saw great success in Canada, Mexico and Britain, however they struggled in countries like Germany, China, Korea and Japan; eventually withdrawing from the German market and selling all of their stores to their competitor (Farhoomand & Wang, 2008).
Even with all of these challenges, Wal-Mart was not about to turn away from the China market; the company saw China, because of population and geographical size, as the only other country where they could duplicate what was done here at home in the states (Farhoomand & Wang, 2008).
Problems in China
As Wal-Mart made its expansion into these emerging markets, they took their well proven business models with them;...