Barriers to 'Us Style' Lean Retailing: the Case of Wal-Mart's Failure in Germany

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When it comes to international business and investment it is important to take into account all aspects of business when moving into a new nation. Both business practices as well as business culture are of significant influence regarding the success or failure of an organization’s endeavors. One such company to experience a clash in international corporate culture recently was that of Wal-Mart. In an attempt at improving upon their capacity to earn a profit, they made the decision to attempt to move into the German market. Their attempt at doing so however would not be entirely successful, in that they failed to take into account the atmosphere and culture in which business is done in Germany. This would ultimately lead to disinvestment in the nation. (Christopherson, 2011) When international corporate culture is not understood and effectively tended to, the prospects of an organization are significantly reduced in the global market. The style of Wal-Mart is quite unique in that they are able to utilize significant leverage-based techniques to influence the business environment within which they operate. For the organization to become active within Germany, it would establish an office there through the process commonly called foreign direct investment. It was intended that the company would be able to transfer their practices and business style into Germany and in doing so achieve success. Ultimately they would fail to actively take into account their host country. The “home country effect” was not taken into account, thereby resulting in a failure on behalf of Wal-Mart to address the international corporate culture present in Germany. Wal-Mart took resources into Germany; however they did not develop as in America. It was due to the market governance regime in Germany and the internal corporate environment that the Wal-Mart model was unable to work. The reliance

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