The United States has become a major player in global businesses. This guarantees companies in the U.S. extensive sales in an extremely competitive field. Also, they have been to acquire various international organizations. This has resulted to expansion of the Human Resources systems of the company making various companies more successful. The human resources department needs to sensitize employees of the significance of proper understanding for cultural differences. Understanding that labor laws are variant from one nation to the other will help in management of activities in various nations. While selecting individuals for foreign jobs, companies should gauge elements such as adaptability for an individual as well as the family. The candidate for foreign job must be excellent in communication, tolerant to ambiguity, patient, as well as ready to always resolve conflicts.
Summary of the case
In this case, Wal-Mart in China faced exclusive cultural differences with the mother company in the United States. China does not fully support companies that are centrally controlled in other nations such as Wal-Mart. Differences in business operations between the two countries are based on poor trade regulations, insufficient infrastructure, as well as disparity of lifestyles. Through their massive purchasing power, Wal-Mart discouraged various suppliers. However, David Glass invested massively in technology in bid to make Wal-Mart excellent in supply chain giving the company a competitive advantage (Farhoomand, 2006).
The other merit of Wal-Mart is employee motivation. It initiated as a retailer the program of offering profit-sharing among its employees. Managers were required to always empower employees in terms of cross training to equip them with adequate knowledge on the company’s operations. Corporate information was made available to all parties to ensure that all employees clearly understood the performance of the business and their contribution (Farhoomand, 2006). The company was extremely aggressive in ensuring unions stayed out in its operations by ensuring employees enjoyed all the benefits that were available.
It was now the moment for the organization to develop a philosophy, and business, to the global market. The company performed extremely well in Britain, Canada, and Mexico and it was seeking global presence in influencing customers worldwide following high quality products on favorable prices. However, this philosophy could not work in Germany as it never gave the company excellent ground for competition. Also, entrance to the Chinese market was covered with massive challenges that would have threatened the Asian spread of the philosophy that has been effective in Britain, Mexico and Canada (Farhoomand, 2006).
Customers who were urban dwellers possess variant buying habits than rural dwellers. Since Wal-Mart had a philosophy of bringing retail expertise to rural areas, the company had to change its product line in order to suit the needs for those customers. This would include fresh food on daily basis as well as allowing animals and reptiles sales in the stores. As time elapsed, local competition grew making companies copy Wal-Mart’s EDLP strategy for advancing their growth (Farhoomand, 2006). Shoplifting was also a major problem.
Also, Wal-Mart in China faced HR issues of adaptability, communication, tolerance, as well as openness to cultural differences. Both customers and Wal-Mart employees were involved in shoplifting. Employees were never granted stock options, were poorly paid, while the management had an extremely high turnover. The law demanded that labor unions be developed in every organization. Officials condemned Wal-Mart for employing their true and tries tough negotiation skills to force lower on suppliers (Farhoomand, 2006).
According to Lee Kuan Yew, who is former Prime Minister of Singapore, “to be part of the Asian dynamism, Westerners do not need to become Asians in culture, in values, or in habitsbut it is necessary for Westerners to understand Asians, to feel at ease with Asians and to make Asians feel at ease with them” (Mello, 2006). There was need for Wal-Mart to hire Human Resource professionals who could have cordial working relationship with Chinese employees to strengthen the Wal-Mart philosophy in every province. The professionals must understand and speak the language of the province within which they operate.
Also, the company needs to develop programs and benefits that are meaningful to employees from that province as this would encourage company loyalty as well as work with management to raise employee wages and increase store security. Labor unions are recommended by the government, in a manner that HR professionals need to be trained in negotiation skills as well as possible operations with unions. Despite China being of a variant culture from the United States a way out in terms of operations had to be developed.
The company needs to hire adaptable HR professionals and provide excellent training for proper job handling. Following the differences in culture the HR must communicate with Chinese employees, enjoy their differences as well as adapt to their lifestyles. They must offer meaningful benefits to employees in order to recruit and maintain excellent employees. HR professionals must be familiar with labor laws and regulations. Being recruited to operate in China, calls for political understanding for excellent operations in the country as well as in its provinces (Mello, 2006).
The human Resource department is extremely fundamental in any organization. Therefore, the management of Wal-Mart should hire employees with traits adaptable in China or any other nation in which they intend to expand their operations. Destination services needs be extended to individuals who are to be hired to operate in foreign countries as well as their families. Wal-Mart is slowly adapting to the training and performance management system.
Farhoomand, Ali. (2006). Wal-Mart Stores: "Every Day Low Prices" in China (HKU590). Hong Kong, China: The Asia Case Research Centre, The University of Hong Kong.
Mello, J. A. (2006). Strategic Human Resource Management (D. Noguera, Ed.). Mason, OH: South-Western Cengage Learning.