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Project Phase II

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Project Phase II

The number of organizations operating beyond their motherland is continually

growling. The word is welcoming foreign companies, and new destinations in the

organizations’ business are expanding. One such company is Walmart, which has grown from

a local discount store in the US to attaining global status, with branches worldwide. This

paper is phase two of a proposed plan for Walmart to gain entry into Egypt, where the

company does not currently have a presence. The paper covers the impact of global culture,

entry and marketing strategies, financial management and accounting, and organizational

culture and human resources.

Impact of Global Culture on the Company

Company culture

Being a global leader, Walmart invested heavily in creating a conducive and all-

inclusive culture. In particular, Walmart defines its culture in how it delivers customer

service, the condition of its work environment, and continuous improvement. The company

has developed four values to achieve this: “service to the customer, respect for the individual,

strive for excellence and act with integrity” (Walmart., 2021). The company encourages its

employees and global associates to practice the above values to

create a global culture.

Country Culture (Hofstede’s Model of National Culture)

When analyzed in terms of Hofstede’s Model of National Culture, both the US and

Egyptian cultures are similar in some elements and different in others. In terms of Hofstede’s

proposition of collectivism vs. individualism, Egypt would be termed a collective society

while the US would be classified as individualistic. A collective society is characterized by

leaders working in groups towards an ordinal objective, while an individualistic society is

characterized by leaders working alone towards a specific goal. However, the two cultures
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show similarities in Hofstede’s theory of masculinity versus femininity, with both societies

categorized as masculine. (Elsaid & Elsaid, 2012). Thus, the differences in some aspects and

similarities in others could result in confusing reactions for Walmart’s aspirations to Enter

Egypt. Based on the analysis of both Walmart’s and Egypt’s culture, I think there are no

significant changes required to suit Walmart’s culture in Egypt. Walmart’s values, which

define its culture, can be easily integrated into Egyptian culture.

Entry Strategies and Marketing/Supply Chain Issues of the Company

Export, Licensing and franchising, Strategic Alliance, and FDI

Walmart largely exports its products from the US to its foreign retail markets.

However, the company also has a strong supply chain system which enables it to source from

over 60 countries. Walmart is categorized as a corporation; hence, no individual can claim

ownership of any of its outlets. The company has also formed strategic alliances with other

companies such as Rakuten Kobo inc, Gap Home, and Shopify. The company has posted

mixed results in its FDI initiatives. For instance, the company posted significant success in

Mexico, while its FDI initiatives in India were largely disappointing (Malviya, 2021).

Products and Brands

Walmart has numerous brands and products, each customized for a specific customer

need. Some of the brands include Sam’s choice, George, Apparel, Great Value, and Equate.

Its products criss-cross almost every sector, say fresh products, fresh and dairy supplies,

health, pharmacy, beauty, and household supplies. Nearly all products under Walmart brands

are categorized as private labels and can be found in virtually every category at Walmart

(Walmart, 2021).

Distribution and Supply Chain

Walmart employs Vendor management Inventory in its supply chain initiative. This

implies that manufacturers manage their products without Walmart’s involvement. The
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company then sources its products directly from the manufacturers, who are capable of

meeting demand. Afterwards, the company develops a strategic relationship with vendors,

guaranteeing high volume purchases in exchange for the lowest possible prices (Banker,

2021). The company also has a fleet of trucks, which delivers products to distribution centers

that are repackaged and then distributed. In particular, the company uses a cross-docking

inventory tactic, implying that inbound products are directly loaded into outbound trucks

without extra storage (Banker, 2021).

Financial Management and Accounting of the Company

Capital Structure

Walmart’s capital structure is a combination of debt and equity, with its debt to equity

ratio at 1.80. The low figure indicates that the company prefers equity to debt in its financing

options. The figure also implies that it is a blue-chip company; hence, it is likely to service its

debts (Macrotrends, 2021) effectively.

Financing of International Trade or Export Financing

Walmart does not have district financing for international trade, with its primary

source of financing remaining the same for domestic and international operations. However,

the company has partnered with HSBC bank to offer sustainable supply chain initiatives

(Banker, 2021). Through the program, suppliers who comply with sustainability goals get

favourable financing.

Accounting System

Given that the company has numerous stores across the globe, it uses a centralized

accounting information system. The system is online-based with automated functionalities

such as recording daily transactions for each store, facilitating online payments, generating

receipts and supporting virtual communication. The system can also automatically generate

financial reports, which aid the company in decision making (Alsharari,2021).

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Transfer Pricing and International Taxation

Under US laws, multinational companies must pay taxes twice in their country of

operation and then to the internal revenue service (IRS) once they repatriate their income

(Tax Policy Center, 2020). Therefore, Walmart will be expected to pay taxes to both the

Egyptian government and the US government. In terms of transfer price, Walmart has in the

past set the lowest possible transfer price for products manufactured in the US, if the tax rates

in the US are higher than in other territories, for instance, Puerto Rico (Vélez, 2016)

Organizational Structures and Human Resource Management

Organizational Structure

Walmart uses a hierarchical organizational structure based on hierarchy and functions.

The hierarchy consists of vertical lines of authority and command in the company. For

instance, excluding the CEO, every employee has an immediate supervisor. Mandates and

directives from senior management are channelled and implemented through middle

managers and Walmart stores’ employees. The function feature of Walmart’s organization is

based on speciality, for example, the IT and human resource departments, which fulfil a

specific mandate (Thompson, 2017).

Coordination and Integration

Walmart coordinator, a position available in all of Walmart’s countries of operation,

is tasked with coordinating and integrating Walmarts components. In particular, this person

settles customer issues, identifies complex issues and reports to appropriate business units,

gathers customer feedback, collaborates with managers to develop and implement processes

to meet business needs and leads and collaborates with various teams (Walmart, n.d.)

Human Resource
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Walmart has a human resource department which identifies vacant positions,

schedules interviews, processes and updates status and any other employee issues. The HR

department sources potential employees from both external and internal sources.

Furthermore, the recruitment approaches can either be direct or indirect. For instance, the

company approaches college students who might be interested in working with the company.

The company has a continuous training program where new and existing employees are

equipped with the latest technology and customer management skills. However, each store

has its unique needs based on its location; each has a dedicated HR department that interprets

the company-wide policy to suit a given location.

Labor Relations – Expatriates

Although Walmart largely employs residents in most of its international stores, it has

also employed expatriates in key positions. For instance, the CEO of Massmart, a subsidiary

of Walmart, is an American citizen, Mitchell Slape. Similarly, after acquiring Flipkart,

Walmart employed expatriates in legal counsel, compliance and chief financial officer

(Hasan, 2021).

References

Banker, S. (2021). Walmart’s Massive Investment In A Supply Chain Transformation. Forbes.

Retrieved 19 November 2021, from

https://www.forbes.com/sites/stevebanker/2021/04/23/walmarts-massive-investment-

in-a-supply-chain-transformation/.

Elsaid, E., & Elsaid, A. (2012). Culture and Leadership: Comparing Egypt to the GLOBE

Study of 62 Societies. Business And Management Research, 1(2).

https://doi.org/10.5430/bmr.v1n2p1

Hasan, A. (2021). People Matters - Interstitial Site — People Matters. Peoplematters. in.

Retrieved 19 November 2021, from

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https://www.peoplematters.in/news/c-suite/walmart-likely-to-hire-expats-for-top-

roles-in-flipkart-18818?media_type=news&subcat=hiring&title=walmart-likely-to-

hire-expats-for-top-roles-in-flipkart&id=18818.

Macrotrends. (2021). Walmart Debt to Equity Ratio 2006-2021 | WMT. Macrotrends.net.

Retrieved 19 November 2021, from

https://www.macrotrends.net/stocks/charts/WMT/walmart/debt-equity-ratio.

Malviya, S. (2021). FDI Norms: Walmart disappointed with FDI norm change soon after the

Flipkart deal. The Economic Times. Retrieved 19 November 2021, from

https://economictimes.indiatimes.com/industry/services/retail/walmart-disappointed-

with-fdi-norm-change-soon-after-flipkart-deal/articleshow/68295720.cms?from=mdr.

Mohammad Alsharari, N. (2021). Management Accounting Practices and E-Business Model

in the US Walmart Corporation. Accounting And Finance Innovations [Working

Title]. https://doi.org/10.5772/intechopen.100630

Tax Policy Center. (2020). How does the current system of international taxation work?. Tax

Policy Center. Retrieved 19 November 2021, from

https://www.taxpolicycenter.org/briefing-book/how-does-current-system-

international-taxation-work.

Thompson, A. (2017). Walmart’s HRM: Recruitment, Selection, Employee Retention -

Panmore Institute. Panmore Institute. Retrieved 19 November 2021, from

http://panmore.com/walmart-human-resource-management-recruitment-selection-

employee-retention.

Vélez, E. (2016). Wal-Mart Civil Trial Challenging Transfer-Pricing Tax Gets Underway.

Caribbean Business. Retrieved 19 November 2021, from

https://caribbeanbusiness.com/wal-mart-civil-trial-challenging-transfer-pricing-tax-

gets-underway/?cn-reloaded=1.
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Walmart. (2021). Working at Walmart. Retrieved 19 November 2021, from

https://corporate.walmart.com/our-story/working-at-walmart#:~:text=Each%20of

%20our%20four%20values,create%20a%20culture%20of%20 inclusion.

Walmart. (USA) Coordinator II, Contact Center Operations. Careers.walmart.com. Retrieved

19 November 2021, from https://careers.walmart.com/us/jobs/WD491469-usa-

coordinator-ii-contact-center-operations.