This is a report about the Walmart china. In this report Walmart china has been discussed in detail and furthermore evaluation of each of the HR practice that is followed in the firm is also evaluated using the suitable framework. Although there are many reasons and facts that prove that Walmart china is a huge failure but besides these facts and figures there are also some valid reasons provided in this report that prove that Walmart china has turned out to be a leader in some of the contexts when it is compared with the competitors. There are many reasons which suggests in this report that why international and multinational MNCs have failed in the market of china. A detailed evaluation of the HR practices has been discussed in this report which explains where Walmart is failing and some suggestions were also provided to overcome such issues. A framework called Hofstede framework analysis was discussed in relation with the HR practices that describe the organization properly. Hence Walmart china can be studied from this report which will provide the overall culture and environment of the company.
Walmart in china started in 1996. With the opening of a supercenter and a club called Sam’s club in Shenzhen Walmart also started its stores opening. Today Walmart in china operates a number of offices like Global Sourcing Offices, eCommerce headquarters of china and many other stores that are available in number of different formats and banners. There was an announcement by Walmart and JD.com in 2016 about the strategic alliances so that they can serve better to the customers across China with the help of e-commerce and retail as these both companies are the largest e-commerce company by revenue in china. CEO of this company of china is Dirk Van Den Berghe.
The superstores of Walmart in china are approximately 164,000 sq. ft., and are successful in providing the several types of fresh foods, clothing, appliances used in households, grocery and many other things to the customers all over the China (Wiseman, 2014). There is a one-step shopping experience provided by Walmart to the customers. Main commitment of this company is to operate responsibly in every sector and helps in creating a much better lives for the employees who are working in the company, customers and even for the communities where they are operating. Walmart also provide training programs for the Chinese women so that there is women empowerment and they are able to pursue their careers in the retail sector (Walmart, 2017). Walmart is also into the energy saving practices as there are energy efficient stores and many different distribution centers in China. This company is also into minimizing the environmental footprints and even helps in saving the customers money (Basker, 2005, pp. 203-229).
There is leverage provided to the expertise and the resources so that local issues are supported that ranges from the hunger disaster to the education disaster relief (Neumark & Zhung, 2008, pp. 405-430). There are many food items that are sold in different markets but Walmart provides many other different food items that are not provided anywhere else. For example snickers are sold with some batteries, pig feet with their heart are sold, live frog, black chicken and many other things. 70% of the merchandise from china is imported by Walmart. Today it has become one of the major retailers present in china and there are around two hundred stores of Walmart in more than hundred cities of china.
There are many international and multinational brands that have failed to live up the expectations in china (Wu, 2008). There can be many reasons for this failure. As china is a communist country so it is much into politics and this can be one of the reasons of failure of brands in china. Beside the political perspective there are other factors also which are responsible for the failure. Chinese market is massive so for the right companies it can be really profitable. But there are also many brand that are successful in other countries and when they enter into the Chinese market they tend to fail and slink away in defeat (China Briefing, 2016). Although the market of china is massive but it is not an easy market to enter. Some of the factors that are responsible for the failure of brands in china are:
If a company is not sure about the market of the country one should not enter into it and once they enter they tend to fail miserably. The internet culture of china is way different from the culture of many different countries (Custer, 2015). Consumers of china have different needs and desires in online services and most of the companies tend to ignore this fact and then fail. Perfect example of this is eBay which is an American giant. EBay copied its American model to China without understanding the market and got completely devastated by the local competitors such as Taobao (Marketing, 2015). This company understood the market of china and people and made sure that there is chat feature so that customers could easily talk to the shopkeepers. On the other hand eBay lacked the personal connection with the customer, so it failed.
Entering in a country like China is very difficult and in most of the cases it is near to impossible. So choosing a local partner can be both successful and sometimes it can even lead to failure. Groupon china can be considered as a good example in this case. This company deals with the sites that made supplications of mistakes on its china adventure. But one of the biggest mistakes it had done was the selection of Tencent as their local partners and in addition to this they even failed to use the resources of Tencent. There are several Groupon style sites that are owned by Tencent so for this company Groupon was never a priority and moreover there was no much of stake was there in the success or failure of this company. Partnership with Tencent should have provided many advantages like local knowledge, local staff and even access to the biggest user bases of china. But nothing sort of this happened as Groupon failed to take the advantage.
For a company to enter into a country like china they should follow all the rules and regulations that are made by the government. International companies and domestic companies can push their envelope to the government time to time but if they try to refuse the directions of government then it will lead to the ticket to their home, hence failure (Gao, 2006, pp. 119-125). Google is the example that can be used here as it failed to get along with the government of the china. There was a dispute between the company and the government so Google stopped censoring the search results in the China which further led to the shutting down of its search engine completely. There are very few companies that have challenged the government of china but Goggle is the only one that challenged.
Consumers of Hong Kong are totally different from China. Some brands research for the Hong Kong consumers and then draw conclusions from that research to the market of China. For example in Hong Kong there is segment of customer called tai- tai but when china is studied there is no such segment that exists there.
Brands that enter into the Chinese market tend to face a tough competition from the local brand of china. Local brand tend to grow more rapidly in the market as compared to the foreign brands. For example nestle is a very good company and even dominate in most of the countries but in china there are more local brands that do better business then nestle. Moreover the Chinese government and the private firms are all in support of the local brands rather than supporting the outside brand.
Some brands have also failed in china as they use celebrity face for their marketing which might mean different for the people of China. So it is always a risk to use a western celebrity to endorse a product in China.
Employee value proposition of Walmart is not as good as we think of. Employees are not really happy with the working system of Walmart and they do not even enjoy the benefits which they should enjoy. Many times employees have also undergone strikes because they were not satisfied with the working hours (China labor watch, 2016). Earlier there was standard maintained in Walmart china for the working hours, but recently comprehensive working hour system is being followed I most of the store. Standard working system suggested that employees will have to work for 8 hours in a day for almost 5 days a week which will amount to 40 hours of working a week but not comprehensive working system says that employees will only work for 4 to 11 hours in a day that to only for 3 to 6 days in a week which will result into 40 hours of working to 20-66 hours of working in a week (Diversity plus, 2014). Now for the employees there is a reduction in the employee benefits and there will be no guaranteed leaves for the employees in comprehensive working system. Employees are not getting any advantage of it. Employees in Walmart china are totally unsatisfied with this system. Beside this there was also not much time was provided to the employees for this change. The employees are also not paid enough to survive properly in today’s era. Wages that Walmart is providing is less than the minimum wages that are provide locally (Hochberg, 2013). Even the workers in china are not treated well.
The employee value proposition of Target is way better than Walmart. The employees are satisfied with the benefits that have been provided to them by the company. Target basically provides benefits in different sectors such as physical health, financial security, and social relationship and even in the community involvement. Employees are provided with the medical and dental coverage. For the women workers there is a maternity support program so that they get trained in many other things also beside only the work at workplace. Target also offers saving to the employees and there are many investment plans and insurance options for the employees. Sometimes they are even provided with the discounts so that they are able to meet the financial goals. Childcare discounts are also provided to the employees who have children. Employees in the Target are also benefited with leaves; there is no strictness in the sanction of the leaves.
Diversity management in Walmart is actually good. Diversity at the workplaces mainly depicts employees of different human qualities or many are those who belong to different cultural groups. Diversity has always played an important role in the organizations and for the companies it is actually beneficial to have diversified range of employees. Walmart has been successful in the management of diversity and has become a leader in the market in this context. The diversity management of Walmart can be seen from the Diversity and Inclusion report which shows how there are an increment in the independent living of the employees and there have been also employment opportunities for the people who are disabled (Diversity and inclusion report, 2016). This company also uses many ways so that workforce diversity is integrated into the human resource planning process (Al Ariss & Sidani, 2016, pp. 352-358). Walmart is also maintaining a long term cooperation relationship with the National Black MBAs. Walmart makes sure that the diversity is controlled properly in the organization and most importantly it is respected. The minorities in the organization are given the Equal Employment Opportunity (EEO).
Diversity in Target is also managed in the most amazing way. The legal employer of the organization who presents an outstanding commitment to diversity is given the diversity award in this profession. Target cooperation therefore provides a strong commitment toward diversity through a variety of initiatives (Hennepin county bar association, 2013). Each sector of the Target internally takes a scorecard which helps in measuring the success in the demonstration, preservation and reputation of the organization. The employees of target are even engaged in the variety of diversity and inclusion business councils. More than 6000 employees are involved in this program (Becker and Smidt, 2016, pp. 149-165).
Employee engagement plays an important role in any organization as more the employees are engaged in their work more will be the productivity in the organization. Walmart has also adopted some programs in order to increase the employee engagement in the company. There were stories about the unfair advantage that was that was taken by the Walmart of their employees who work in stores. There was also discrimination faced by many women in context of pay and promotion practices. Hence there was no satisfactory employee engagement in Walmart. To increase this employee engagement Walmart has adopted gamification program. When gamification is applied to work it helps in improving the customer service, helps in accelerating the path of productivity and even helps in reducing the cost of turnover. Walmart has adopted gamification as a strategy to reduce the tensions that were created by the lawsuits and the negative press happening outside of the company (PAMNTS, 2014). The work that employees perform in Walmart is not very stimulating and does not give the satisfaction or accomplishment. There is also no feeling of growth in Walmart. This leads to have negative feeling about the company and even the employer. Therefore gamification uses technology so that more stimulating working environment is created and employees are encouraged to work better.
Employee engagement of Target is actually sustainable and effective. Employees in the Target are mostly happy and feel valued. There is a strong relationship between the organization and employees who are working there. Employees are satisfied with the environment Target is providing to them. Hence their involvement in the work is maximum. Target employees work with full zeal and give their best. Due to the better employee engagement there is high productivity in the company and customer service is also worth as compared to the other companies. Employees are involved in the decisions making and their suggestions are also listened by the senior management. If employees work extraordinary in this company they are given rewards be it in monetary form or non-monetary form. Hence there is a high employee engagement in Target. Even if an employee has some problem and is not satisfied with the working environment then company tries to resolve their problem and even understand the employees. Due to all these reasons employee engagement in Target is amazing and both the organization and the employees enjoy the benefits.
Walmart basically leads a team of many talented HR and the professionals of talent development that are responsible for the talent acquisition. There is also a learning and development program for the employees and for that there is also a succession management for the employees. Walmart has also led to the talent management strategy that leverages the planning of workforce, succession and also develops a top talent program that helps in building a stronger talent pipeline. Walmart also provides the training program for the employees so that they learn the culture of the company and give their best to the company.
Talent management at Target is really appreciable. All the employees here are given their best they have been provided with the utmost working culture. Employees are talented so they bring their best talent together with the commitment so that companies are benefitted. The competency model of Target helps the employees to know their skills better and abilities which are required for the company to be successful in market. Talent planning routines are followed in the Target and beside that an annual survey is also done which helps the employees to put forward their opinions and this will also help in improving the business of the company. Training programs are also provided to the employees for the betterment of the company and these training programs are mostly designed using some of the benchmarking that are combined with the industry research along with the internal expertise. Regular reviews are also provided to the employees of the Target. These reviews help the employees to know where they are lacking in giving their best and according to the reviews they adapt these changes and then perform better. Target stores also support the application development which helps in the talent management of the company.
There are number of people who are actually struggling with the cost of health care and medication. For the wellness of the employees Walmart is running the incentive programs of corporate wellness for over 35 years and it has turned out to be a successful program and changed many lives. Employers of the Walmart spend bugs on the healthcare of the employees so that they remain healthier and give their best to the company. Infact the federal government also supports many companies that implement wellness program. Indirectly these wellness programs help indirectly to the bottom-line of the company.
Target stores mainly encourage wellness of the employees and even promote many preventive benefits that include care and offerings so that their families and even the employees lead healthy and balanced lives. For the employee wellness Target provides coverage of prescription drug and even encourages the programs and give reward to the employees so that to encourage healthy actions. This company also runs tobacco cessation programs. Employees often get life insurance plans, childcare discounts and even provide parental leave.
Evaluation of Walmart china is done using the suitable framework that is Hofstede framework where further human resources practices are evaluated.
Employee value proposition is basically a number of associations and benefits that are provided by the organization to the employees which includes the skills and the capabilities that an employee brings into the organization. An organization must provide a unique and different EVP so that employees feel motivated and works with their highest zeal for the organization. It even helps in the retention of the employees. Many a times in an organization, EVP is also called as Employer Brand Proposition. If there is well formed EVP maintained then it can actually help the organization in the most positive way such as there is attraction of employees, key talents of the organization are retained, HR agenda gets prioritized, strong brand for people is created and even there is reduction in the hire premium. Hence employee value proposition is basically creating a balance of rewards and recognition that are given to the employees in return of their good performance at the organizations.
Employee value proposition of Walmart can be evaluated using the Hofstede framework. This factor can be explained with the Power distance sector of the framework. Power distance basically describes whether the powers in the organization or society are being distributed equally or not. It also explains how equal or important an employee is for the company. In Walmart china there is high power distance when compared to the U.S where Walmart first originated its first store.
EVP of Walmart china is discussed in the evaluation using the Hofstede framework. And from the evaluation it can be concluded that there is high power distance that is employees are not valued in the Walmart. There is no recognition of their work and they are not even paid a worth amount for their work. Hence it should be changed and every employee of the company should be valued and get the desired benefits what they deserve.
Diversity management is a practice that addresses and supports the number of lifestyles and characteristics in the workplaces and organizations (Stone & Deadrick, 2015, pp. 139-145). To manage this diversity at the workplace there are certain activities that includes giving the education to the employees about the diversity, supporting the acceptance and even respecting different culture, racial, societal, economic and geographic backgrounds of the employee.
Diversity management can be evaluated using the Hofstede framework. Diversity management can be explained with the help of individualism versus collectivism sector. Walmart encourages diversity and has respected people from all over the world. Even in the stores of Walmart china there is huge diversity and it is actually important to have diversity in the workplaces (Stone, 2011, p. 499). People in china have low individualism that means people of china have collective nature. However people are collectivistic usually perceive they to be societal and cultural. And in Walmart china also people are more collectivistic.
Diversity management was evaluated using the Hofstede framework and from the evaluation it can be concluded that there is huge diversity in the Walmart china and employee there respect the diversity and work together without any disputes. Employees in Walmart china are basically a collectivistic kind of people hence they have a strong bond in relation to the cultural and societal context. There are number of employees from different parts of the world who are working in the Walmart china.
Employee engagement is mainly a relationship between the employee and the organization. It is very important to have a healthy relation between the two to have a successful company (Simon, 2015, pp. 7-35). An engaged employee will be totally dedicated towards the work and to the organization as well. So it becomes a positive action for the company to have engaged employees as it will help build up a good reputation for the company as well. More the employee engagement more it will be beneficial for the company. This relationship of employee and the organization is mainly based on the trust, commitment, and basically the communication (Deadrick & Stone, 2014, pp.193-195).
Employee engagement is also evaluated using the Hofstede framework and from the evaluation it can be concluded that employee engagement can be explained with the help of masculinity versus femininity sector because it was observed in the report earlier that there were issues regarding the women employees in the organization. There was discrimination faced by the women in the Walmart for that even strikes took place (U.S. news, 2016). This sector explains about the gender differentiation that occurs in the organization as well in the communities around the world. In china there is high masculinity and the opinions of the men are generally dominated on the women. It happens in the organization as well. Due to this there is less employee engagement from the women. In Walmart also there is less employee engagement of women workers due to this Walmart faces failure in china.
Employee engagement of Walmart china was evaluated using the Hofstede framework and it was concluded from the report that there is less employee engagement in Walmart and more of the masculinity is present in the firm, which ultimately affects the success and reputation of the company. China itself is a masculinity country where all the men dominate and this happens in the organization as well. This has to be stopped if Walmart wants to be successful in china and they will also have a good reputation of them.
Talent management is basically a commitment of an organization to have the best recruitment with maximum retaining of employees and to develop the talented and superior employees that are available for the organization. So it becomes very important for the employees to have talented employees who giver their best to the company and there is massive production of the company. Talent management basically helps the organization to retain their best talented employees (Research Gate, 2015). It is also a business strategy. There are many processes that can be part of the talent management system such as recruitment planning meeting, job description development, on job training and making the job offer to the selected person who can be fruitful for the company.
Talent management can be evaluated with the help of Hofstede framework analysis. Hence talent management can also be explained with the power distance sector. Power distance describes the powers and explains whether the employees are treated properly or not. Walmart has the high power distance as the talent management is performed amazingly in the Walmart. There are also many programs that have been adopted by the company to retain their best employees and have also succeeded in a way. Talent management thus plays an important factor in any organization.
Talent management was evaluated using the power distance sector. It can be concluded from the report that there is unique talent management program that is adopted by the Walmart. These programs help the firm to retain their employees and try to grow in the international market. Thus by retaining their talented employees in the firm an organization gets a benefit.
Although Walmart china has failed in many contexts but somehow it is better brand than most of its competitors and turned out to be a leader in the market. The sale of Walmart china in 2012 was around $10 billion and it has increased over the years (Schell, 2010). It has also cultivated an influential relationship with the customers and managed to donate RMB77 million to the charity of the local community in China (Loeb, 2013). This donation helped Walmart to gain acceptance and opened more stores in china. Walmart has also adapted to the market changes and has become more innovative then before. This includes giving emphasis on the quality of food and groceries that is fresh (Bodry, 2009). Walmart is also the only company that thinks about the women empowerment and creates many job offers for them in china. If competitor is taken into consideration than Walmart is way better than the Target. Many people around the world has misconception that Target has a very sophisticated market strategy but in actual Walmart treats their employees better. Walmart also allows their employees to unionize and hire almost all the people as compared to the Target.
Although this company has number of weakness but there are many strengths that overcome the weakness and Walmart turns out to be leader. Walmart has a high efficiency of supply chain (Natto, 2014). The organizational size of the company provides them the number of funds for their growth and expansion. In addition to this the global supply chain also gives them the business from the market specific risks (Walsh & Zhu, 2007, pp. 49-267). Because of the high technologies that Walmart has it has the worth supply chain that monitors and controls the product that move from the suppliers to the stores (Walmart, 2014). Walmart also made sure their delivery speed is always maintained. Biggest strength of this company is that the way it delivers fragile goods such as fruits which includes bananas and mangoes to customers while maintaining the time duration. It delivers the products within hours with the help of number of fulfillment centers and delivery stations all over the country.
Walmart also provides career incentives to the employees that perform well throughout in the firm. Beside this this company also provides training programs to the employees and even sends them to US for learning the culture of the Walmart in better way. Walmart has also won many awards like the best performer in china, employee of the year, no fake products and even the most admired company in china in 2007. It is also the partner in the expansion campaign that adds a value point to the company. Walmart is using local finding to stock the shelves in its mart. This company also maintains a good relationship with the suppliers and even gives them payment within 3-7 days. These are the reasons that describe that Walmart china should be considered as a leader in most of the contexts when it is compared with other firms like Target (Target, 2015).
Conclusion
From the report of Walmart china it can be concluded that Walmart china is not a huge success as Walmart U.S. although it has done market analysis and many different things to survive in the market but it has failed drastically. The competitors of Walmart in china are way better than it in context of every field be it employee satisfaction, reputation and the pay skills of the employees. There were also some reasons drawn from the study that why many companies fail to survive in the Chinese market. A detailed description of the Walmart using the HR practices it follows and how it follows in relation with the Hofstede framework was also studied which explained that what are the areas in which are Walmart has to improve in order to be successful in the Chinese market. Although china is a communist country but beside the political reasons there were also many other reasons that was explained in the report to understand the failure of china.
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