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Authored by ZoeScott

The Role of Cultural Differences in Walmart’s Failure in Germany

Doing business abroad is always a risky matter; it needs thorough preparation, business arrangements, and legal advice. However, ignoring cultural differences can bring to naught the tremendous amount of work and investment. Speaking of differences, we usually contrast Western and Eastern cultures. The case of Walmart in Germany proves how dangerous it is to neglect cultural differences even in culturally not so distant countries. To wrote about it in more details I used tok essay format help. Walmart started expansion into Germany in 1997 with the purchase of 21 outlets, and added 74 stores next year. In four years, the estimated loss comprised around €1 billion. By 2005, Walmart in Germany was clearly a failure; it had to close several outlets. In 2006, the company sold the remaining stores and withdrew from the country. This analysis will concentrate on the aspects of Walmart’s corporate culture that failed when automatically introduced on the German market. Different factors destined Walmart’s German expansion to fail, but experts agree that negligence of cultural differences has played the crucial role. First, Walmart started with employing three CEOs from the USA and one from Great Britain, none of which spoke German, saying nothing about the insights into the country’s culture. Second, the staff had to start the working day by cheerfully chanting triple “Walmart!” It was supposed to maintain the company’s spirit; in practice, it only irritated German employees. Third, Walmart’s working ethics demanded to spy and report on the misconduct of fellow workers, which was particularly abhorring for Germans with their recent experience of totalitarian regime. Fourth, the bright American smile was perceived as artificial and annoying by both employees and customers. The resulting fiasco cost Walmart huge losses and was a heavy blow to the company’s pride. The conclusion to draw from this case is that cultural differences may not be ignored in foreign business campaigns. The knowledge of foreign culture and its artful merging with the company’s culture can ensure success, while negligence can destroy the business.

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