Globalization as One of the Dominant Modern Trends - Essay Example

? Global Organizations Ethical & Cultural Issues Walmart Ethical & Cultural Issues Globalization is one of the dominant moderntrends. As such, there has been a rise of global organizations in the recent past as corporations seek to expand their presence in the global market. Indeed, because of globalization companies dealing in different products enjoy great competitive advantage, huge returns, and a wide customer base. Nevertheless, despite the resounding benefits accrued from globalization, there are significant risks and challenges attached to globalization. Such challenges may include ethical and cultural issues that corporations face as they seek to expand their presence in the global arena. Wal-Mart Stores, Inc. faces ethical, social responsibility & cultural issues as it seeks to expand its operations outside the United States. Indeed, this research paper addresses and analyzes the cultural, ethical, and social responsibility issues affecting the operations of Wal-Mart outside America. Wal-Mart is a global retail corporation that operates a chain of large retail stores in various formats across the world (Forbes, 2013). The global organization has its headquarters in America and stands out as the largest private employer with more than two million employees across the world. The corporation has about 8500 stores, which operates in 50 states in the United States and in 26 countries across the globe (The New York Times, 2013). The global organization has a low price philosophy, which attracts a wide a customer base (Forbes, 2013). Nevertheless, with the diversity of its operations and many employees the corporation faces numerous ethical, cultural, and social responsibility issues relating to its operations and workforce. Walmart has been expanding its operations outside US especially to areas where it can establish a strong retail store. The global organization opened retail stores in Japan, Germany, China, and South Korea but faced various cultural issues that limited its success and sometimes led to the closure of such retail stores. Notably, Germany was the first place that Walmart opened its stores outside Europe (Landler & Barbaro, 2006). Nevertheless, cultural issues in Germany grounded its operations. The cultural issues included the corporation’s failure to provide all products and services under one roof as seen in American stores (Landler & Barbaro, 2006). Moreover, the merchandise at the Walmart stores in Germany was inefficient for the customers. The retail store irritated the German customers by placing all the premium products at an eye level and placing the discounted products at the bottom or the top most shelve where customers struggled to get the discounted products (Landler & Barbaro, 2006). Additionally, the WalMart’s product line in Germany did not suit the shopping and cultural traits of the customers. In fact, the German culture negated the American culture that Walmart propagates in that shoppers opt to shop daily in various local stores dealing in household goods and groceries instead of shopping once a week as Walmart advocates (Landler & Barbaro, 2006). Walmart had issues in satisfying the cultural and shopping habits of a normal German shopper who seeks to the most efficient and limited time in shopping (Landler & Barbaro, 2006). The retail store in Germany mandated customers to spend longer time in shopping to the dismay of the German shoppers. Additionally, the retail store introduced strange management practices that did not conform to the German culture. Indeed, the management requires employees to attend the morning exercise before the shift that annoyed many German employees (Landler & Barbaro, 2006). Furthermore, the store required sales clerks to smile at customers. This negated the German culture where men viewed this as flirting and the German culture viewed the behavior of smiling at strangers as an abnormality (Landler & Barbaro, 2006). In fact, this trend disturbed many German cashiers and derived hard feelings as the smiles were clearly not sincere. The corporation’s formula for success equally failed to work in South Korea and Japan (Holstein, 2007). Indeed, WalMart’s philosophy of offering low priced and diverse products and did not amount to huge returns in countries with different cultural habits like South Korea and Japan (Holstein, 2007). Actually, in Japan shoppers do not go for cheap products but prefer high quality, high priced, and exclusive products (Holstein, 2007). The ethnocentrism that defined WalMart’s way of doing business did not accommodate the cultural differences between South Korea and US and thus the cultural conflict. Walmart tried to impose American cultural values in its stores across the globe thus failing to accommodate cultural diversity. The mandate to open the stores for 24 hours conflicts with the cultural habits in various areas outside US. Ultimately, Walmart supplies in Japan do not meet the customers’ cultural tastes or standards of quality (Holstein, 2007). As a global organization, Walmart must deal with certain ethical and social responsibility issues for it to achieve market success. Notably, Walmart has many stores, operates in different environments, and has many employees. Therefore, the corporation must address the ethical problems that relate to the employees. For example, the corporation must establish good work relations with labor unions of the host nations. Indeed, the corporation must allow the employees to join labor unions and respect the relationships between corporations and labor unions. This is unlike in Germany where Walmart had strained relations with the labor unions, did not allow employees to join unions, and disregarded the relationship between corporations and labor unions (Landler & Barbaro, 2006). Walmart must be ready to adjust its policies in responding to the employees’ needs. Moreover, Walmart must establish better working environment, better working terms, and adopts cultural diversity in the work place. This should a better recruitment and firing mechanism. Otherwise, mass firing and poor working conditions will lead to huge employee turnover, consumer apathy, social disharmony, negative connotations, and employee distrust as seen in Japan’s Walmart case (Holstein, 2007). Furthermore, the management should involve employees and respond to their concerns to raise their morale. Otherwise, the corporation will encounter poor performance from the demotivated and frustrated employees as seen in various stores outside United States. The global organization must abhor social responsibility where it prioritizes environmental conservation, recycling, and sustainability. Otherwise, the corporation will annoy the society and accrue customer apathy as seen in Germany where the corporation’s brand name of the corporation was not popular and failed to keep up with the social responsibility standards (Landler & Barbaro, 2006). Indeed, in Germany, WalMart’s idea of using plastic bags caused a huge public outcry. Ideally, Walmart had ethical perspectives that defined its operations across the globe. Indeed, Walmart adopts an ethical code that supports spying on the employees and reporting and misconduct to the management. Moreover, it appreciates all stakeholders and offers incentives, shares profits, enhances good interrelations, and provides cheap (Wal-Mart Stores, Inc, 2013) and friendly service to the customers (The Economist, 2001). Walmart aims at reducing costs of operation, respects and treats the employees and suppliers well. The company requires sales employees to smile at the customers and encourages all employees to attend the morning Wal-Mart cheer before shifts (The Economist, 2001). Furthermore, it creates bonding sessions for the stakeholders and forbids working on overtime. To this effect, it demotes or dismisses managers who paid overtime. Notably, these ethical perspectives had different implications across cultures in this global organization. For example, although smiling at customers is a good act of hospitality, the German culture disregards smiling at strangers and men in this culture view this as an act of flirting (Landler & Barbaro, 2006). Moreover, German employees have challenges in practicing this behavior. The ethical perspective of spying on your co-workers and reporting any misconduct is welcome in America but disregarded in the German culture. The perspective of offering cheap and friendly service to the customers is very effective in the American culture but not applicable in Japan where shoppers value high priced and exclusive products (Holstein, 2007). Additionally, the perspective of opening the retail stores for 24 hours and forbidding overtime is welcome in America but raises ethical and labor questions in various areas outside US. Nevertheless, the perspective of uniting all he stakeholders and encouraging the employees to contribute their best to the corporation is seemingly applicable in all cultures. Ultimately, it is advisable for Walmart to consider different customer preferences based on their cultures to ensure that all its perspectives lead to market success across the globe. References Forbes. (2013). Wal-Mart Stores. Retrieved from: http://www.forbes.com/companies/wal-mart-stores/ Holstein, W. (2007). Why Wal-Mart can't find happiness in Japan. Retrieved from: http://money.cnn.com/magazines/fortune/fortune_archive/2007/08/06/100141311/ Landler, M., & Barbaro, M. (2006). Wal-Mart Finds That Its Formula Doesn’t Fit Every Culture. Retrieved from: http://www.nytimes.com/2006/08/02/business/worldbusiness/02walmart.html?pagewanted=all&_r=0 The Economist. (2001). Wal around the world. Retrieved from: http://www.economist.com/node/895888 The New York Times. (2013). Wal-Mart Stores Inc. Retrieved from: http://topics.nytimes.com/top/news/business/companies/wal_mart_stores_inc/index.html Wal-Mart Stores, Inc.(2013). Global Responsibility. Retrieved from: http://corporate.walmart.com/global-responsibility/?povid=P1171-C1093.2766-L9 Read More