The fact that Wal-Mart is operating in many different countries of the world has caused a lot of problems emerging particularly from cultures of different countries. In this case, Wal-Mart is faced with a cultural conflict and this may result in this company decreasing its profitability and productivity in the international markets. Cultural conflicts usually occur when customers from different countries start viewing the performance of products of a company as being inferior that other company’s. For instance, since Wal-Mart operates stores in 15 countries each and every country has its own cultures and these cultures may influence the performance of this company in the global market.
According to Silverman (1999), despite the fact that Wal-Mart Company is very aggressive in matters relating to entering into international markets, it sometimes faces a lot of problems in the process of entering into another country. For instance, the efforts made by this company to enter into Argentina were not very successful as a result of cultural influences in this country. This shows that customers from Argentina do not embrace American supermarkets and hence Wal-Mart is facing a very big problem. This company had optimistic hopes of changing the cultural influences of the people of Argentina in the year 1995 but this was not successful. Henderson (2006) indicates that culture usually determines the success and failures of an organization. Cultural influences affecting the performance of a company usually change from time to time and from place to place.
Businesses or companies that use outsourcing method of getting adequate employees are in most cases affected by cultural influences. In this respect, Wal-Mart operates in China and South Korea and hence it outsources its employees from other countries like Japan and the United States of America. This, according to Wade (2004), creates a major problem as the expertise may not be completely welcomed by the home country employees. The reason for this is cultural background where people in China may feel threatened when they are given orders or directives by somebody from another country especially if he or she is from a low economically stable country.
There are accusations within and without Wal-Mart that it exploits low income earners and hence its performance is certain countries is jeopardized. For instance, in Germany it can be stated that Wal-Mart pays its international employees more than its domestic employees and hence German employees working in a store in Germany may fail to perform as require following the view that they are exploited (Silverman, 1999). This shows that the involved people are the employees both international and domestic based whose conflicting ideas would to decreased profitability of this company (Henderson, 2006).
The other cultural conflict is based on corporate culture or the responsibility of great power. In this respect, as put forward by Silverman (1999), the internal culture of Wal-Mart is to provide everybody with low priced products and to have efficiency when serving customers. This culture is capable of transforming the American economy more than what the American political situation would do. This brings about cultural conflict since the organizational culture of this company is in opposition with the external culture like the political culture of America.
In conclusion, cultural factors are very essential as they are the determinants of success or failure of a company especially to companies that operates globally. The fact that Wal-Mart Company uses multinational approach as a business strategy, the aspect of different cultures in the different countries lowers its performance in some countries.