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(PDF) Managing across borders

   

Added on  2021-05-30

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Managing Across Border

Running Head: ReportContentsExecutive Summary.....................................................................................................................................2Introduction.................................................................................................................................................2Background to the Company.......................................................................................................................3Understanding the concept of an ‘Ethnocentric’ versus ‘Polycentric’ and ’Geocentric’ approach to management................................................................................................................................................5Impact on the international manager’s ability..............................................................................................8Change Management.................................................................................................................................11Conclusion.................................................................................................................................................12References.................................................................................................................................................14Appendix...................................................................................................................................................151

Running Head: ReportExecutive Summary This report is about understanding the management of Wal-Mart (retail market based in the US) in the international market like Germany. This report discerns the challenges the company has faced due to national culture and staffing issues through the brief understanding of ethnocentric, polycentric and geocentric approach. The globalization Strategies and the staffing and training process for global operations is also included in this report so that the Wal-Mart can maintain theemployment relationships in the context of international human resource management. This report also includes the recommendations on managing diversity and teams across borders and how to mitigate the organizational issues in global context. IntroductionThe customer expectations and the market competition are intensifying the competitive pressureson the organizations. In response to this, the organizations are progressively looking for theefficient ways to meet the demands of the customers for the stipulation of customized andresponsive services and products that meet their requirements. Negligence to efficiently andeffectively meeting the requirements of the customer can ensue in a loss of a customer to thecompetitors in the same market. The organizations are nowadays increasingly taking advantageof the globalization in locations with the most strategic advantage to locate the value chainactivities. This includes establishing the company in different geographical locations. However,it is not necessarily the fact that the company or same retail market in different geographicallocation will adopt similar HRM practices, even if the retail market are located in liberal marketeconomically. The human resource practices like other companies matter in the performance andeffectiveness of the retail market. The organizations in the liberal market economy are having2

Running Head: Reportmore liberty than those in various different economics to adjust from different HRM practices aslong as the company is following the political and legal framework of the nation involved.However, the selection of such practices can be influenced through the differences in the culturalenvironment of different market economics following legal framework. The prominence of theorganization's human resource management practices remain in their capacity to impact differentwork practices that affect the satisfaction of the employees, organizational citizenship, andcommitment, the performance of the employee. That is, culture is a not easy to deal with in orderto understand the word and to define it. The Hofstede defines culture as the process or action ofthe mind which differentiate the people of one category or group of people from another.Hofstede also argues that the value is considered as an inner segment of any culture whichprefers certain states of affairs over others. Hofstede has defined the national culture in 5dimensions known as power distance, masculinity vs. feminity, uncertainty avoidance,individualism vs. collectivism, and the short term and long term orientation. This primary aim ofwriting this report is to understand the concept of ethnocentric vs. polycentric and geocentricapproach to management in the Wal-Mart organization. This report also includes the impact onthe manager’s ability in international terms and the how the Wal-Mart must change itsmanagement approach to work effectively across national cultures and different values[ CITATIONNaz13 \l 1033 ]. Background to the CompanyWal-Mart is very successful in the United States and is a chain of retail stores and supermarket.Wal-Mart is successful in many different nations and in July 2006, the Wal-Mart decided to sell3

Running Head: Reportits Holdings in Germany. Wal-Mart had incurred a loss in the German market in establishingitself. Wal-Mart every year has been losing approximately $ 199 million. Wal-Mart represent thebest practice in supply chain management is among the worlds largest firms which. The Wal-Mart has an excellent candidate which has been effective in moving into the market outside ofthe domestic nation. The Wal-Mart accomplishment of the aim in the Mexican, Canadian, andUS markets has been ascribed to its early promotion, but the exit of the Wal-Mart from theGerman market is of interest because it contributes to extending literature on the ‘failure’ in theinvestment in international market despite the reach of its supply chain and company size in theglobal market. The Wal-Mart comprises approximately 1.2 million resources in their USheadquarter and is largest in the nation. Wal-Mart has expanded by developing the new stores insuburban and rural locations. Since 1990, the Wal-Mart has been entered into the urban marketusing its control over suppliers and logistic system to maintain cost leadership strategy. As aresult, the Wal-Mart capability to succeed and expansion outside the nation that is the USA hasbecome even more prominent with the profits of the company. In the end of the year 1990’s,Wal-Mart has expanded in the market of the German as a phase of its International expansionstrategy. The third largest retail market in the world is German accounting for 15% of Europe,after Japan and USA. The Wal-Mart has used the same strategies to influence the market in itsInternational expansion. However, the Wal-Mart has identified that it faces some barriers toentering the German market. The Wal-Mart has begun from a relatively weak position in theGerman market by making an alliance with two relatively weak chains known as Wertkauf andInterspar. To alter the existing distribution system, the Wal-Mart is not having the market powerand thus Wal-Mart took on the extra cost related to the inventory and wholesaling that thecompany is able to achieve in the United States. Wal-Mart has hoped to use the strategy of price4

Running Head: Reportbased competition to conquer the German market[ CITATION SCh07 \l 1033 ]. The most significantproblem faced by the Wal-Mart, however, rose from within its structure of corporate governancethat of international trade companies which are owned by the shareholders such as pension fundswith short term objectives. The continuous and significant losses of the Wal-Mart and thecontinued aggressive attitude of the competition were responsible to halt the expansion of theWal-Mart in Germany. The lack of success of the Wal-Mart in the Germany was associated withthe employees that Wal-Mart has hired to expand into the German market and its inability toidentify the advantages of those employees which is very distinct from the context of the USA. Understanding the concept of an ‘Ethnocentric’ versus ‘Polycentric’ and ’Geocentric’approach to managementSmall and large scale businesses like the Wal-Mart retail business expands in the global marketdue to increasing globalization and improvement in technology. This expansion comprises ofsales offices and setting up production facilities in different nations. The types of staffing policyor the approaches the companies implement in international human resource management areethnocentric staffing, geocentric staffing and polycentric staffing. [ CITATION LMa172 \l 1033 ]. The company may be enticed to adjust ethnocentric approach to HR practices to eliminate theidentified risk in new ventures. The ethnocentric firms like Wal-Mart hire the expatriates toenforce the practices and rules in different nation same as to their domestic country. The5

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