Challenges and Recommendations for Wal-Mart's International Operations

This report discusses the challenges faced by Wal-Mart in its international operations and provides recommendations to improve its global performance. It highlights the role of human resource management in organization and the challenges in International Human Resource Management.

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Human Resource Management

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Executive summary
In this report I will consider the current global challenge of International Operations that is faced
by Wal-Mart. I will make recommendations in the context of improving the condition of the
company at international level. The role of human resource management in organization, large or
small, is huge as it facilitates in employing people and provides training them and compensating
them. Wal-Mart is well known American multinational retail corporation that operates its
business in different countries but facing global challenge in handling them with efficient
manner. There are different challenges in International Human Resource Management that has
been elaborated under this assignment.

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Contents
Executive summary.........................................................................................................................2
1.0 Introduction................................................................................................................................4
1.1 Company overview................................................................................................................4
1.2 Challenges persist in Wal-Mart’s International Operations regarding cultural awareness....4
1.3 Objective of this report..........................................................................................................4
2.0 Analysis of the issues faced by Wal-Mart Company.................................................................5
2.1 Wal-Mart’s long-standing dilemma:......................................................................................5
2.2 Challenged by local customer................................................................................................6
2.3 Regulations of different countries to allow open stores.........................................................6
http://www.xl-enterprises.com/RetailMerchandiser_WalMart.pdf 3.0 Recommendations...........7
3.1 Improve Business performance through Hofstede’s dimension............................................7
3.2 Increase process integration through Glocalization concept..................................................7
3.3 Develop coordination and decision making through employ local employees with good
wages............................................................................................................................................8
4.0 Risks and contingencies...........................................................................................................10
5.0 Conclusion...............................................................................................................................11
References......................................................................................................................................12

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1.0 Introduction
1.1 Company overview
Wal-Mart Multinational Retailer Company is being chosen for this assignment as this company
is facing global challenge of managing the operation worldwide. The company has around
11,300 stores under 58 banners in 27 countries and e-commerce websites in 10 countries. The
employees of the company are around 2.2 million globally (Wal-Mart, 2019). The Headquarter
of the company is located in Bentonville, Arkansas, United Stated. This company is led by
president & CEO Judith McKenna in a productive manner in order to expand its business
globally. The company is providing a lot of features to the customer in various forms such as
Walmart App, Walmart Grocery, Easy Recorder, Walmart Pay and Pickup discount that
facilitates customer to connect with the company for a long period.
1.2 Challenges persist in Wal-Mart’s International Operations regarding cultural
awareness
Wal-Mart is facing global challenge in its international operations. However, the operation of the
company is expanded in number of countries such as Africa, Canada, China, Chile, Argentina,
Central America, Japan, Mexico, India and United Kingdom. In the context of reviewing the
shifting strategy of the company in China, the ongoing risks in Latin America and the potential
for Wal-Mart to enlarge in Sub-Saharan Africa. The international operation of Wal-Mart is
accounted for 24.1% of sales and reached USD 116.1 bn in 2016. The company has recorded an
insignificant sales increase of just 1.3% to $136 billion for the division of international unit. The
company has closed 29 stores in China and 26 in Brazil (da Rocha and Dib, 2002). Wal-Mart has

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invested a lot in India to open its store, for which the company abrogated an agreement with
Bharti Enterprises. It indicates that many countries pretend a weak reaction to Wal-Mart’s
international effort.
It has been found that Wal-Mart has decided recently, to close the 269 stores all around the
world. It depicts the global issue of not handling proper management by the company, which
force them to close the stores. This decision of the company will impact around 16,000
employees and it is done due to not proper human resource management within the operation.
1.3 Objective of this report
The objective of this report is to explore the ongoing global challenge of international operations
by Wal-Mart. The report will commence by conducting a critical evaluation of the Company’s
operation in different countries. The issues will be demonstrated in an adequate manner due to
lack of attention towards human resource department. The culture of different countries is varied
and it is necessary for the companies before expansion, to focus on the factors that can affect the
activities of the company (Ovcina, 2010). I will take consideration of relevant theoretical
frameworks to analyse the current approach, which will be helpful for the company to achieve
strategic objectives. Next, I will highlight the set of recommendations for the purpose of
minimizing the global challenges faced by the company. I will then emphasis a set of
contingencies and risks that company Wal-Mart may desire to focus. Lastly, I will conclude with
the description that I have made in the context of elaborating the global challenge of Wal-Mart.

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2.0 Analysis of the issues faced by Wal-Mart Company
2.1 Wal-Mart’s long-standing dilemma in hiring employees:
In the context of International operation, Wal-Mart is facing issues in hiring employees for the
store. It has been found that the timing is not fixed for the employees of the company, that create
issue for them to work with the company for a long time (Cain, 2018). There are different
department in Wal-Mart for which, they require different employee with specific skills. It is the
major issue for the company because due to lack of understaffing, the store manager moves
employees from one department to another which make challenging environment for them, it
increases the attrition rate (Maters, 2004). Along with that the employees are not trained for
convincing people to buy the products from the store. India and China are good illustrations of
this challenge. While research, it has been found that the large stores are looked upon as being
costly in the view of customers, on the other hand, customers consider lower stores that provide
low range for selling the products (Brewster, Chung and Sparrow, 2016). The supply chain of
Wal-Mart offers wonderful price benefits via bulk purchasing. It is the belief of customers of
China and India to not buy food items in bulk as they can search out fresher items in smaller
stores in small quantities. There is a challenge for Wal-Mart to provide training to employee and
encourage their potential customers of the freshness and quality of the food, and that the general
merchandise provided is of upper quality despite its low price (Loeb, 2014).

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Figure: challenges persisted by Wal-Mart
Source: https://www.fitchsolutions.com/corporates/retail-consumer/challenges-persist-walmarts-
international-operations-21-06-2017
The domestic business of Wal-Mart has resisted over the last one year, the international business
of the company has not done well either. It has been found that in 2013 Wal-Mart was driven by
weakness in China, Mexico and Brazil and the revenue of the company per square feet declined
by 4.2% that impact over the hiring process of the company (Mun and Yazdanifard, 2012).
2.2 Lack of training and development
It is not the first time that the company has been confronted by local customers. The report said
that Wal-Mart had to walk out from the market of Germany and South Korea because the
management team of the company was unable to understand the habits of the tough customers
who shopped daily (Chuang, Donegan, Ganon and Wei, 2011). It has been done due to lack of
proper training and development program. However, the company has opened online store but it

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is unable to provide training to the employees regarding the same, which creates difficulties not
only for the employees but also for the customers because they are not getting quick resolution of
their mistakes. Despite that it has been reviewed through glass door that many employees of the
company left the organization due to not getting for what they are committed at the time of
hiring. They work under pressure due to not providing strategy of handling the tasks.There are
many competitors operating hypermarkets in India like Spencer and Big Bazaar and provide
training to their employees (Mitchell, 2015). The competitors are also existed in China as well in
the form of hypermarkets such as Beijing Hualian Group.
2.3 Regulations of different countries to allow open stores
The research suggests that the company has to face many confront at the time of enlarging
operation from one country to another country because the regulations of each country are
different from each other. The same challenge is facing by Wal-Mart in what could prospective
be a huge market opportunity-China. Recently, the government of China has decreed that it
would relive regulations to permit foreign retailers to open stores in easy manner. Wal-Mart is
still deliberate in getting rolled out there.
The company had faced tough competition in the country of Germany. In fact, the company
released earning figures for four out of total stores that are 92 (Fitch, 2017). It predicts a
substantial loss for the company. The company had to face issues in the country due to staffing
issues, improper distribution system, ineffective logistic solution and problems in the adaption of
the assortment. The trouble of Wal-Mart in Germany is also blamed on regulations denying Wal-
Mart to set up its usual loss-leader strategy. It is prohibited in Germany to charge goods below
cost. Another challenge has been regulations restraining weekend hours whereas, the extension
was increased at Saturday, Sunday is still at low range for retailing (Kaelberer, 2017).

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3.0 Recommendations
Based on the analysis given in the previous section, in this section, I will portray a set of
recommendations to help Wal-Mart Company deal with their problems or challenges stopping
from inadequate dealing international operations. It is necessary for the company to keep the
focus on such aspects which hold them back in the operation. The recommendations are defined
below in the context of improving the strategy of the company with respect to expansion of the
business.
3.1 Improve Business performance through Hofstede’s dimension
The operation of the company is increased in an efficient manner. It has been found from the
above analysis that Wal-Mart is facing issues in handling the operation outside of the country. It
does happen due to not well study on the foreign culture before expansion (Chuang, Donegan
and Ganon, 2012). The business performance of the company should be done at a global level,
and the company should adopt the strategy of Glocalization that depicts the company should do
working by taking consideration of local as well as global. For the purpose of overcoming the
challenge by a local customer, it is necessary for the company to keep the focus on the national
culture differences as they can impact over the performance of the management system (Bakir,
Blodgett, Vitell and Rose, 2015). The company did mistake in China and India due to not
getcomplete knowledge regarding the traits and custom of local people of there.
The company should follow the Hofstede’s dimension of culture so that the companyget to know
about the ongoing issues in the country in which they want to enlarge the operation. It is the
model that entails six dimension of culture, through which the company would be able to decide
target market accordingly (Gandolfi and Strach, 2009). Each dimension has its own quality that

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includes power distance, uncertainty avoidance, long term orientation, masculinity, indulgence
and individualism. With the help of these dimensions, Wal-Mart can get a lot of about the culture
and trend of people of these two countries, from which they could have succeeded in the country
(Minkov, 2018).
3.2 Increase process integration through Glocalization concept
Wal-Mart should increase process integration across functional and division units decreasing
duplication of effort. Organizational learning can be leveraged across the company by taking
consideration of standardization (Draper, 2017). Systems and data would become more
transparent through this system, and employees can better connect their piece to the remaining of
the puzzle. To increase process integration, Wal-Mart should focus on training and development
program so that each employee of the company can get knowledge about what they need to focus
while working. It has been found that the company is facing an issue in the different county
related to price. To overcome this issue, the suppliers want to sell their maximum products in the
store in order to earn more profits. The company should focus on such factors to increase sales in
the store of the product (Katiuscia Moreno Galhera and Veiga, 2018).
Local experts should be employed by the company in the international market destination. This
strategy would be helpful for the company to understand the vales and needs of local customer so
that they can perform accordingly. Along with there should be two trainers in which one should
belong from local place and another one from the Headquarter of the company. It would be
helpful in describing the strategy of the company in the context of glocalization.

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3.3 Develop coordination and decision making through employ local employees with good
wages
It shall be noted that Wal-Mart is facing the issue in getting a better understanding regarding the
taste of the customers as the lack of understanding of local customs and customers is in opposite
to what is occurring in the US, where the company has been aware regarding the views of the
customer (Vernon, 2017). There should be proper coordination among employees which can be
done via group discussion to plan and sequence initiatives. Before the expansion of the business,
it is necessary for the company to involve employees in the decision-making process so that they
can suggest after study that the chosen country is good target for expansion or not. Quick
decisions are necessary for the company because the subsidiaries of an international operation
are more detached physically in comparison of domestic firm. As a result, improvements
decisions should be made quickly without wasting time or focusing on the benefits for
headquarters executives (Hunt, Watts and Bryant, 2018).
It is required by the company to keep the focus on improving the performance in order to satisfy
the stakeholders. For instance, the company should amplify the wages of the employees so that
they can remain in the organization for a long time. Along with that, the company can develop its
relations with supplier so that price of the commodities in the store can be decreased (Nassauer,
2018). The role of the promotion in the company keeps significant value and for this, the
company should promote the company by involving some discounts on the products and coupons
for purchasing. This would be helpful in increasing the demand for the products of the company
in developing countries such as India, Mexicoand China.
Below-mentioned table should be determined by Wal-Mart in bringing change in the company so
that the issues can be resolved within time-frame.

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Serial Number Priorities Time-scale Consideration
of costs
Description
1 Culture Analysis 6 months 8000USD It has first
priority because
the failure of
Wal-Mart can be
seen due to low
activeness in
different culture.
2 Training and
development
program
2 month 2000 USD Employees will
get to know how
to deal with
customers in an
adequate manner
in order to
increase sales.
3 Involve
employees in
decision making
Regular intervals - The involvement
of employees in
the decision-
making approach
should be
considered so
that the company

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can get
advantages of
multi-culture
ideas. It will
decrease the risk
of failure.
4 Recruit local
employees
as per needof the
staff
30000 USD The employee
should recruit
local employees
for the purpose
of getting
sufficient
knowledge about
local culture.
Glocalizatoin
concept can be
done with the
help of this
activity.
5 Market analysis 6 months 10000USD The market
analysis would
be helpful for the
company to

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know more about
ongoing trend
from which, the
company can
expand the
business
accordingly.
4.0 Risks and contingencies
However, Wal-Mart can improve the condition of the company in an appropriate manner by
following above mentioned recommendations, but there are some risks and contingencies that
need to be considered by the company.
Economy
The economy condition of each country is different from others, it is required by the company to
keep focus on such factors that can impact the productivity of the business. Wal-Mart entered in
the market of China and India, without getting enough knowledge about the interest of people
and nature of the market. India has market based system; on the other hand, China operates
centrally based economy. By taking consideration of Mexico market, it has been found that there
is economic slowdown due to low consumer confidence.

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Wal-Mart is under risk by owing weak environment of Mexico because the store sales of retailer
in the region have rejected by 2.2%. The company has cited low store traffic in the form of
primary cause for its comparable sales decline. The reason for weak consumer spending has
become big for supermarket chains in Mexico to saleit's business (CNBC, 2016).
Social
The social tendency of each country is varied and it would be biggest risk for the company to
expand its business in a new country. However, it has recommended above sending expert of
Wal-Mart to another country in order to analyse the nature of buying of the customer, so that the
business can expand business accordingly. This activity seems easier but it can bring huge
expenses for the company to send an expert in a new place for analysing the market situation. A
little mistake by experts in making report can lead the company into an adverse situation.
Certainly, the company can apply a promotion strategy in the company to get attention from the
customers, but there is a risk to overcome the thinking level of the customer that has been set for
local market.
Technological
Technological factor is biggest threat for that company that establish their business in foreign
country. In the context of India, there are many companies who want to make India as their
manufacturing hubs such as LG and Hyundai. The fast-growing market of China globally
demands Chinese goods and the cost advantages. However, the training program is a good option
for the company to mitigate the risks but there is a risk for the company of technological factor.
Infrastructure and Legal obligations

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The role of Infrastructure is huge in the context of providing quality services to the customer.
Let’s think that Wal-Mart can resolve the issue within the business, but the risk is still remaining
in the environment of infrastructure sector. India and China havea constraint in labor market
required for manufacturing industry. In China, the preference is given to the high domestic
saving rate and correspondingly low domestic demand. China has “one child” policy and the
status of people is middle, that is why they prefer to buy products on daily basis (Trefis, 2014).
Food safety and Standard Authority of India is so active in auditing of food.
5.0 Conclusion
From the above discussion, it can be concluded that the purpose of the report is to analyse the
global issue of the company. Wal-Mart Company has chosen for this assignment to analyse the
issue. It has been found that the company is facing an issueto operate its business at international
level due to less involvement of HR in the decision making an approach. I have explained key
areas of concern for the company such as long-standing dilemma, local customer challenge and
regulations of different countries in open new store. I have provided a set of recommendations to
improve the position of the company in the present market for which the company should focus
on five major priorities. I have provided a table for recommendations which would be helpful for
the company to develop a set of activities that can develop a great process in making good
internationalization process. The discussion has been made on risks and contingencies because
recommendations can also bring issues for the company to improve the condition of the
company.

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