Wal Mart CSR in Germany

Wal Mart CSR in Germany

Wal-Mart Corporate Social Responsibility in Germany

Wal-Mart's approach to global expansion in many respects perpetuated senior management's philosophies and strategies that guided the company to market leadership with its Low Price Everyday (LPED) unique value proposition throughout North America. These philosophies and strategies, while responsible for strong growth in the U.S. And its comparable nations, also at times were either borderline or blatantly unethical. An example of the unethical philosophies and strategies included the practice of reducing employment in stores where unionization had become a significant threat (Christopherson, 2007). Wal-Mart's extremely efficient and profitable supply chain operations also bred an arrogance and blindness to regional and local cultural, employment, legal, and even religious standards in regions very different than the United States and comparable nations (Talaulicar, 2009). With these ethical blind spots brought on by a corporate ethnocentrism, it is no surprise Wal-Mart failed in Germany on both a cultural and ethical standpoint.

Wal-Mart's Failure in Germany

Like many of its successful expansion strategies in other nations, Wal-Mart completed a series of acquisitions in Germany to establish a beachhead at the low-end of the nation's retail market (Christopherson, 2007). Of the several acquisitions completed, the most significant was the acquisition of the Wertkauf hypermarket chain from the Mann family in 1997, the year Wal-Mart began to gain critical mass in the German market (Talaulicar, 2009).

Aside from having difficulty expanding its supply chain and retail operations due to the German government's significantly more stringent controls on products not being sold below the cost to produce them, and shopping hours being restricted to allow for German worker's union requirements, Wal-Mart was also facing a major conflict in their cultural perceptions and lack of legal expertise in the German market (Christopherson, 2007). Among the many areas Wal-Mart was ignorant of from a German perspective, the lack of awareness of how to define rule- versus principle-based approaches to ethics standardization is what eventually caused the retailer to be sued by the German Work Council and labor unions repeatedly (Talaulicar, 2009). With no actual Corporate Social Responsibility (CSR) program in place to introduce the Wal-Mart Statement of Ethics, which was required by the New York Stock Exchange (NYSE) for Wal-Mart to go public, the company floundered and alienated entire local and regional governments in Germany, ceasing labor unions to sue them to stop the Statement of Ethics from being enforced (Talaulicar, 2009). German workers, when handed the Statement of Ethics, immediately went to their labor union leaders, who quickly filed a complaint with local government authorities. The German unions claimed the Statement of Ethics was against the German Works Constitution Act (Talaulicar, 2009).

Conclusion