Walmart’s failure in various countries
Group No: 56, Name: Stuti, Daniel Emika & Matilda Acquaye
Department: School of Business, University of Dundee, Scotland, UK
Failure? Failure? Failure?
What do you mean by failure?
Failure is not the end or success is not final, sometimes failure is an
opportunity to start again in a better way.
Here we are going to discuss some failures of Walmart due to
cultural differences.
Introduction
What is Walmart?
Walmart Inc. is an American multinational retail corporation that
operates a chain of hypermarkets or supermarkets. As of now
Walmart has 10,593 stores in 24 different countries in the world and
has been operating under various different names.
 
It has a revenue of US $548.743 billion as per the fortune 500 lists.
It is also the largest private employer in the world with more than
two million employees.
Company Failure in Various Countries
 
 Although it is the world’s largest company successfully running in
various parts of the world with successfully understanding the
environment, the culture, the social needs and planned a proper
business strategy, it has failed running businesses in few countries
in the world too.
 Countries like Japan, Germany, India, Russia & South Korea where
Walmart fails to run business.
Failure Due to Organizational Behavior,
Cultural Diversity & Leadership
Germany:
 gain the goodwill of employees and their unions in countries that
Walmart failed in Germany due to its poor financial
performance. It made around the US $ 200 to 300 million per
annum. It is due to failure in customer retention. In this case,
Walmart management couldn’t address the different cultures,
visionary, interpret the requirement of the local customer’s
market. In the analysis, it has been noticed that Walmart
completely ignores the national cultural differences between
American and German customers and it is because of its poor
internationalization strategy and planning.
 In country to country the working culture is also different. In the
case of Walmart, in Germany, the same working policies of the
USA had been followed in Germany which eventually stressed
the German employees and forced them to quit or to stay without
motivation which leads to hampered the smooth operation of the
company and resulted in the poor performance.
Japan:
 In Japan, the business of Walmart was sharply declined due to
the inability to match its operation with the local supermarket’s
chain. There are many more local supermarkets like “Seiyu” had
traditionally more reliant on perishables.
 In this small country, the inability to figure out the regional
differences clearly played a major role in Walmart’s failure.
 Walmart could not make a good business partnership with the
Japanese characteristics. It means Walmart never managed to
build significant ties with local business partners.
India:
 India is a country where a lot of opportunities are available for
the growth of a business, provided the business prospects should
mutually agree with the Indian Government. In the case of
Walmart business, it started a joint venture business with Bharti
Enterprises, a local company in India. The business plan was
successfully executed and started in various cities in India. But
after a while, it didn’t run well because of the failure in following
the conditions with the Indian Government. The Government of
India was looking for the development of the small and mid-
scale businesses with Walmart’s success. This is a kind of local
business culture have been following for many years in India.
 Hence, India Government asked retailers to source 30% from the
small suppliers which was the main problem for Walmart to
follow which leads to its major failure in the business model.
Due to the norms & values and leadership failures, Walmart’s
business did not succeed in India.
Corporate Strategy for Managing Cultural
Differences
 There would always be cultural diversity in multinational
Companies such as Walmart. To be able to face the challenges
that come within a multicultural workplace, some strategies can
be followed. According to Barmeyer (2004), there is the need
for intercultural communication whereby the employees are
made to learn each other languages and cultural beliefs without
any form of discrimination. This allows for a seamless
relationship. There can be events, training and seminars that
involve cultural inclusion which allows for the exchange of
ideas, collaboration, and exchange of values where both parties
can benefit from. Negative remarks should be avoided at all
costs concerning one culture over another. Comparisons should
be abolished and if anyone does not adhere to the rules set up a
penalty should be attached to such misdemeanour.
 Furthermore, the leadership style matters a lot. A leader should
not be so high-handed that he or she doesn’t listen to the
suggestions of the subordinates. Good leadership carries
everyone along and that would allow for a high level of
positivity amongst the employees which consequently produces a
greater output and performance. When a leader+ is too rigid,
there seems to be a resistance to change and it could translate to
the workers being demoralized at work hours. An effective
leader should have good oral and verbal communication skills.
Being a good listener would also help to manage cultural
differences in the workplace.
Remedy for Cultural differences in
Walmart
 Walmart needs to resolve this issue of cultural differences and
they situate themselves in they should also make sure that the
management focuses on the welfare of employees because
employee satisfaction is crucial to success.
 Moreover, there should be a focus on the capabilities, intellect
and skills of the employees rather than on the cultural disparities
that exist. This would allow for fostering of a unified body into
accomplishing organizational goals.
Why you think it is an important &
interesting issue
Walmart is the world’s largest retailer and the second-largest company
in the world. Even though it has a big influence in the world, it failed
to run its business in Germany and many other countries. This is one
of the most important topics to learn the reason why Walmart didn’t
succeed in the European country. It is important to know what was the
cultural insensitivity & the failure strategies followed, failure in the
commitment to better services & the lowest competitive prices
proposition, bad publicity about the company after breaking some of
the German law & regulations, etc., so that it will help on the further
business planning to start a new business in a different region in the
world.
Reference:
Barmeyer, C.I. (2004). International Journal of Intercultural Relations,
28(6), pp. 577- 594.
Bhadury, H., Mighty, E. J., Damar, H. (2000), Maximizing workforce
diversity in project teams: A network flow approach. The
International Journal of Management Science, 28, pp. 143-153.