Reference no: EM133402580

Case: Wal-Mart and Germany has not exactly been a love affair made in heavenWal-Mart, started by Sam Walton, continues to build on their successful formula and develop businesses outside of the US where the company originated. Within the information they provide, their statement to Americans in relation to employment commitment is as follows:

'Wal-Mart is committed to customers and communities we serve. What better way to represent the personality of each community than to hire locally, representing the diversity and uniqueness of everyone's home town? As the demographics of the nation have changed, so has our family of Wal-Mart Associates. Our Associates represent every age and walk of life. More than 15% of Wal-Mart Associates in the US are over the age of 55, and Wal-Mart is the nation's largest employer of truly mosaic cultures, lifestyles and heritage. ... Our culture fosters a creative environment that enables people of different backgrounds and abilities to succeed. The success of our Associates means the continued success and growth of our company.'

These values have been developed from the core values of the business that began in the 1960s. Since that time they have continued to develop their business and now operate in 9 countries: Argentina, Brazil, Canada, China, Germany, Korea, Mexico, Puerto Rico and the United Kingdom. Currently Wal-Mart has 1,500 units with 330,000 Associates (their term for their employees).

In 2004, the BBC reviewed the progress of Wal- Mart in relation to its shaky beginnings in Germany. When Wal-Mart purchased two local store chains in Germany in 1997, they were not welcomed with open arms; in fact 'they left a trail of red ink'. The main criticism at the time was that they failed to understand German culture, 'what worked in Arkansas has flopped in Aachen'. Wal-Mart's founder liked the idea of 'greeters' at the doors of his stores so the concept was instituted in America and then the rest of the world. The report says though: 'The Germans ... balked'. The German culture did not warm to the 'homely friendliness of an elderly man or woman greeting them at the door of the store'. Consequently, the idea was dropped 'uniquely on the planet, in Germany'.

By contrast, what Wal-Mart calls 'Flirt points' were set up where 'singles shoppers' can pause for a glass of wine and 'take a peek at the potential'. The practice appears to be working, particularly with older single people who wouldn't have the nerve to date on the Internet.

However, although there are signs the relationship is warming, the Wal-Mart culture and German business culture do not mesh easily (in contrast to the British culture). There are heavy constraints to selling goods below cost price in German superstores so 'loss leaders' are banned. In 2000, Wal-Mart found itself in court for selling long-life milk at less than cost. Wal-Mart's non-union policy was also at odds with German union loyalty.

Wal-Mart is not, however, giving up. In spite of the fact that they have had a bumpy ride, they are trying to introduce new products and adapt to the norms of operating in Germany. To date they run 92 Supercentres and employ 13,000 Associates.