Running Head: WAL-MART: CULTURAL CLUSTERS 1

Wal-Mart: Cultural Clusters

Shameka Lemon

American Public University

BUS310: Business Theory,

Linda Mae Ashar

7/13/20
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Cultural Clusters

Introduction

Culture experts have pointed out different culture clusters of nations. Every cluster

represents a shared religion, history, regional proximity, economic development, and other

factors. In each cluster, the countries are similar on a couple of value orientations. The nature of

cultural values in one cluster differentiates it from the other. Although countries within each

cultural cluster share value orientations, they can differ on other values as well (Hofstede, 2001).

It is important to take great care to appreciate the distinction between each cluster. The clusters

at useful but it is quite simplistic to conclude that all countries in a given cluster are the same. In

every nation, people vary in the extent to which they exhibit the superficial cultural emphases of

the nation.

The Anglo Cluster

Countries such as the USA, Canada, Australia, and Ireland belong to the Anglo cluster.

This cluster emphasizes individualism, orientation, indulgence, and assertiveness (House,

Hanges, Javidan, Dorfman & Gupta, 2004). This cluster de-emphasizes power distance and

avoidance of uncertainty. The USA scores the highest on individualism and is followed by other

Anglo nations. The value profile of the Anglo cluster reflects a high individual orientation to set

goals, whereby, rewards are determined on a merit basis, and goals set for individual

achievement take precedence over collective or family bonds (Ajami, 2006). Within this cluster,

the USA is high in power distance and orientation compared to the other countries in the cluster.

West Europe Cluster

Germany belongs to the West European cultural cluster. Overall, this cluster emphasizes

on power distance. Such a value profile is characterized by democratic states, where the concern
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is typically high in the environment (Menipaz & Menipaz, 2011). In the West Europe cluster,

Greece is high in power distance, orientation, and collectivism. Germany and France, as well as

other French-speaking nations such as Switzerland, are high on power distance. This cluster is

characterized by a selfless concern for other people’s welfare and living in the social and natural

world without trying to alter it. The Anglo cluster, however, is exploitative of the social and

natural environment. The USA is less egalitarian.

The Culturally Insensitive Wal-Mart

Germany and the USA are opposites when it comes to cultural values. Germans are

introverted and do not show off emotion in public because they value their personal space.

Employees, just like the reserved consumers, did not care for Walmart’s public show of

corporate morals such as the cheer in the morning. Before Walmart failed in Germany, the

customers did not like being served by cheerful employees either, because they liked making

their own unique decisions (Christopherson, 2007). These were cultural misunderstanding, but

one would agree that the cultural mantra of Wal-Mart could not have survived in the midst of

German culture with a happy home index considerably higher than America’s.

It was clear that the cultural insensitivity on the part of Wal-Mart began right at its top

management. First, the retailer appointed 4 CEOs in its initial four years of operation. Tiarks

Rob, the American ex-pat, did not understand Germany and its culture. He had initially

supervised about two hundred supercenters back in the USA. He did not understand German.

Owing to his disinterest to learn the foreign language, he announced that English would be the

main language in the stores. Tiarks also disregarded the legal framework and complexities of the

German market, ignoring all strategic advice offered by the Wetkauf executives (Christopherson,
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2007). This resulted in the quitting of 3 top leaders from Wertkauf. Moving forward, his

successors failed to integrate German outlets with the company’s culture and business model.

Conclusion

When entering new markets and expanding from the domestic environment to the global

environment it is very important for companies to carefully study the cultural aspects of the new

environment (Ronen & Shenkar, 2017). Failure to do so will result in misunderstandings and

cultural clashes. For Wal-Mart, Germany was chosen owing to its strategic location in Europe

and the advantage of acquiring Wertkauf. However, in-depth research would have helped Wal-

Mart leadership understand that German people had robust values and were highly resistant new

things. This could have helped Wal-Mart adopt friendly strategies in Germany or avoid the

country before entry.

 
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References

Ajami, R. (2006). International business: theory and practice. Armonk, N.Y.: M.E. Sharpe.

Christopherson, S. (2007). Barriers to 'US style' lean retailing: the case of Wal-Mart's failure in

Germany. Journal Of Economic Geography, 7(4), 451-469. doi: 10.1093/jeg/lbm010

Hofstede, G. (2001). Cultures and organizations: comparing values, behaviors, institutions and

organizations across nations. Thousand Oaks: Sage Publications.

Hofstede, G. (n.d.) The 6-D model of national culture. Available

at  https://geerthofstede.com/culture-geert-hofstede-gert-jan-hofstede/6d-model-of-

national-culture/

House, R., Hanges, P., Javidan, M., Dorfman, P., & Gupta, V. (2004). Culture, Leadership, and

Organizations. New York: NY: SAGE.

Menipaz, E., & Menipaz, A. (2011). International Business. London: SAGE Publications, Inc.

Ronen, S., & Shenkar, O. (2017). Navigating Global Business. West Nyack: Cambridge

University Press.