The Walmart Analysis for Leadership

For this class, the Walmart Analysis for Leadership assignment will apply toward Folio. Be sure to upload your paper to Folio once you have completed it and share a link in your submission in addition to uploading it to Waypoint to be graded. Learn more about Folio, the ePortfolio tool this university uses, by viewing the Folio Quick Start Guide (Links to an external site.).

In the first half of the assignment, you will prepare for Walmart to operate in a foreign market. You will need to analyze at least two leadership models and/or styles to determine which one will be more suitable for leading employees and for responding to stakeholders in a country outside of North America.

Determine the leadership competencies that would be beneficial to you as a leader in the selected foreign market. You will choose either Peru, New Zealand, Philippines, Egypt, Czech Republic, or the United Arab Emirates for your analysis.

You will also need to compare the concepts of cultural leadership according to how they can be applied in the country that you have selected. You must also determine the leadership skills and practices that should be used in order to foster team and organizational success.

In the second half of the assignment, you will conduct an analysis of the country that you have decided to expand operations into. The analysis must include the rationale for country selection based upon demographic and economic data. Lastly, the analysis should inform leadership about the country’s culture based upon GLOBE’s nine dimensions of culture as argued in Northouse (2018).

Incorporate each of the nine dimensions of culture in an analysis that will be hypothetically presented to Walmart leadership. When utilizing the nine dimensions, current information about the culture of the selected country must be utilized. The purpose of this preliminary analysis is to make sure that the leadership team understands the complexities of expanding into the country that you have selected.

Analyze the demographic and economic data of a country that Walmart is currently not operating in.

Conduct an analysis for Walmart leadership about the country’s culture based upon the GLOBE’s nine dimensions of culture.

Explain how Walmart’s leadership skills and practices may lead to organizational success.

Formulate a model of cultural and ethical leadership as it applies to Walmart at a global level.

ANSWER

The Walmart Analysis for Leadership

Leadership Models

Walmart is one of the retail stores that has aggressively pursued globalization since its first move across the borders in 1991. Walmart today has more than 63,000 outlets across 27 countries (Vélez Berríos, 2020). This success has to be attributed to quality leadership and following the right leadership models. Walmart has been successful thus far because it has enough resources. It has also effectively utilized technology to improve the quality of services offered to employees (Al Khajeh, 2018). The company also has a high bargaining power over its suppliers, making it easy to sell the products at a lower price. This gives the company a competitive advantage over other retail stores across the world. Walmart uses two types of leadership models in its stores across the world. Transformational and transactional leadership.

Transformational leadership

Transformational leadership is a leadership approach that causes changes in individuals and social systems. The aim of transformational leadership is to ensure that a valuable and positive impact is made on the followers, and the end goal is to ensure that the followers are inspired to become leaders (Al Khajeh, 2018). Unlike other leadership models, such as democratic leadership, the leader focuses on the big picture. They are more focused on the future and not the present. Most of the steps they take are geared towards the big picture. For example, in Walmart, despite the company being big in America, the leaders wanted more from it and were more focused on making it a global company. They are more focused on making a great company that rules globally and not in one part of the world. They are also focused on making leaders out of the employees within the company and, thus, creating and inspiring the employees to become great leaders.

Transactional Leadership

Transactional leadership involves motivating and directing followers primarily by appealing to their self-interest. Transformational leadership is responsible for giving the organization the strategy and the vision, but transactional leadership is responsible for the execution of the strategy and vision and running the business at the stores. Transactional leadership at Walmart involves factors such as promotions of the high- performing individuals. This motivates the employees to keep working as they know that if they work hard enough, they will be promoted to a higher role, and promotions often come with advantages such as a pay raise and benefits (Al Khajeh, 2018). The retail store also maintains a relationship with suppliers. They have a balanced give-and-take model with the suppliers, which has kept the company on good terms with the supplies as it offers advice on supply chain efficiency.

Transactional and transformational leadership have worked effectively for Walmart in the American market. However, these two could be difficult to apply in a market such as Peru. In the Peruvian market, the best leadership style to apply at the onset of the business is democratic leadership. A democratic leader listens to the opinions of the people. A democratic leadership encourages flexibility, especially in the international environment, and the leader is open to change and accepting the cultural differences they will experience in a new market (Al Khajeh, 2018). The problem with democratic leadership is that it takes time. However, when moving to an international market, it is important to take time to avoid making any rash decisions. Democratic leadership paired with transformational leadership could be helpful in ensuring that Walmart has a successful business in Peru.

Leadership Competencies

Leadership competencies are skills and behaviors that contribute to the optimum performance of a business. Some of the leadership competencies that would work best in a Walmart in Peru include high ethical and moral standards. A leader with high ethical and moral standards creates a safe and trusting environment (Avery & Bergsteiner, 2020). They create an environment where justice and fairness are practiced, and thus, the employees honor the rules of the business. They also communicate their expectations to ensure that all members of the team are aware of what is expected from them, and by being informed of what is expected, nobody is blindsided. The Peruvian business culture is group-oriented (Pagda et al., 2021). This means a leader should have excellent communication skills with their employees; asserting individual preferences is less important. What matters is the group conforming to the norms. For example, if the manager has an idea, the idea must appeal to the rest of the managers; otherwise, it will not be viewed as important if they are the only one who thinks it is an excellent idea.

Peru has two official languages, Spanish and Quechua. Peruvian Spanish is quite different from the one spoken in Spain. Few Peruvians speak English well. Communication in the case requires the manager who goes to Peru to have some Spanish background. They should be well-spoken in Spanish. Effective communication is key to running a successful business (Spillan & Rahman, 2020). People in Peru are soft-spoken, they occasionally raise their voices to make a point, but they dislike loud and boisterous behavior. The manager who will be in charge of the new Walmart in Peru should understand the communication style of the Peruvian people and ensure they conform to this communication style to ensure that they remain on good terms with the stakeholders, investors, and customers. It is also important for managers to learn how to read between the lines. This is because the Peruvians do not communicate directly they sometimes might not communicate their point directly; sometimes, they might tell a person what they think the person wants to hear and not the truth, and thus, the importance of being attentive to their non-verbal cues.

Understanding the culture of culture when going international is important; for example, in Peru, meetings start with small talk, which can be extensive. Walmart is a global company with outlets worldwide (Spillan & Rahman, 2020). When setting up a new outlet in Peru, they should understand that patience is fundamental in formal meetings. Unlike in North America, where meetings are precise and direct to the point. The meetings in Peru will likely start with small talk. The interruptions during a formal meeting are not always a lack of interest in whatever is being said; it is their style. Peruvians have a polychromic work style which means they pursue multiple actions simultaneously. As a manager in such an environment, it is important to understand that they are not being disorganized or they are not ignoring some of their tasks. They are used to pursuing different tasks at the same time.

Bargaining in Peru can be extensive. This is one of the behaviors the manager will observe. The customers and the other stakeholders will probably spend a lot of their time bargaining and haggling. This means that they show inters in new ideas and concepts but changing their position is hard (Spillan & Rahman, 2020). They will sometimes want to stick to their way of doing things and thus the importance of remaining respectful. Instead of pushing them to do things the way the manager is used to, they should reconsider holding meetings to talk about the issue. It is also important to note that due to the nature of the Peruvians and the way they have a hard time adapting to new things and new ways of doing things, they might take some time before deciding to shop in Walmart. This means that the management should develop a strategy based on the culture of the Peruvian people to attract customers. This means selling products at low prices and having offers that will attract customers.

Business Analysis of Peru

Peru’s economy has been rapidly growing. It has a low public debt to GDP ratio, international reserves, and a solid central bank. Peru’s economy was stable before the pandemic, and after the pandemic, the economy stabilized again. This means that Peru is a market that can be and should be explored. Peru has a modern capitalist economy with free competition and policies against monopoly and price controls. Private property is guaranteed. The central bank reserve in Peru is responsible for the public finances and is independent (Bonsu & Twum-Danso, 2018). The dominating industry in the country is copper, as it is the largest exporter in Latin America. The country also exports agricultural products. The county has 33 million inhabitants. The business people in Peru are familiar with global business etiquette, making it easy for Walmart to have suppliers in Peru if it sets up a new business.

The Peruvian economy has grown steadily for the past two decades. It has had an average of 5.9% despite the financial crisis in 2008. This shows that Peru has a stable economy that can withstand harsh economic times and, thus, a market worth exploring. During the 2008 recession in America, Peru’s economy grew by 9.8%, which was the highest in Latin America (Nora et al., 2018). The success in Peru was a result of some major legal reforms made in the 1990s when the free market economy was introduced. There are a number of new laws that have been reformed to promote investment in strategic sectors such as oil and gas. The stable economic growth and resilience in the last two decades present a stable economic environment for Walmart to invest.

GLOBE’S Nine Dimension Culture

According to GLOBE’s research program, culture refers to parameters that differentiate each collective in a meaningful way with a focus of “sharedness” of cultural indicators among members of the collective. For example, one can say it is the American culture to straightforward. The first of the nine dimensions that Walmart should observe is performance orientation (Pagda et al., 2021). This means understanding the degree to which the Peruvian people are interested in rewards for Performance improvement. After studying this, they will understand that the Peruvian people, unlike Americans, are not motivated by money. They are mostly interested in recognition by the leader. To ensure that they get the optimum performance, the leaders in Walmart need to keep commending the employees who perform excellently in their jobs. This keeps them motivated.

In Peru, assertiveness is not common. In their culture, they will lie to the manager to prevent them from feeling bad or tell a lie if that is what they believe they need to hear. They are not confrontational or aggressive in their work (Pagda et al., 2021). Americans are assertive and are not afraid to tell an employee or the employer what they think, even when the person does not want to hear it. This means that Walmart will need to change its leadership strategy when dealing with suppliers, employees, and customers. They will need to understand that sometimes not everything that is said is true, and employees will likely lie to make the employer happy. The manager should also find a calm way of solving issues as Peruvians are not confrontational ad would rather solve their issues calmly.

The Peruvian culture does not show future orientation. They are focused on achieving quick results. This means that transformational leadership could fail in this case as they are more focused on achieving quick results, and transformational leadership is focused on achieving goals in the bigger picture. The Peruvians have a humane orientation. They believe in fairness, being generous, and caring. They are welcoming to the visitors, which means that the company will perform well in its new environment.

The Peruvian society is collectivist and shows in-group collectivism. Society puts great emphasis on family and the importance of staying together. They have a group mentality in that they believe in the group’s opinion rather than the family’s opinion. Walmart is used to an individualist community, and thus, the importance of changing strategy and adapting to the culture of the Peruvians to ensure that they adapt to the culture of the Peruvians and ensure they show that they value their culture. There is not much institutional collectivism in Peru. Although the country has some new laws on the ownership of big businesses, the distribution of resources is not collectivist in Peru.

Gender egalitarianism has not yet been achieved fully in Peru. Women are still the minority in the country though it has been working towards achieving equality in the legal practices; knowing this about the Peruvian culture will help the new Walmart in promoting gender equality by giving women and men equal opportunities. The country also has a high power distance inequality level. This means that resources are unequally distributed, and the distance between the poor and the rich is big. This means that the store will have to understand the consumer trends of both the poor and the rich to ensure that it appeals to all classes.

Walmart Leadership Skills and Practices that may lead to Organizational Success

Walmart has an open-door policy. This means that employees have access to their leaders. This leaves e communication doors open(Vélez Berríos, 2020). Communication is important for the success of the company. Keeping open communication has led to the company’s success in North America as there is open communication between the employers and the employees. The managers also have a willingness to tolerate honest mistakes from the employees. Allowing employees to make mistakes without penalizing them or confronting them aggressively will work in Peru, as Peruvians do not like confrontations. It also creates an environment where the employees can learn from their mistakes, creating an active learning ground for the employees.

Walmart gives its employees the power to feel like they are in charge. This strategy will work in Peru as the people in Peru do not work with a single goal in mind. They work with several goals in mind, which means they work on many things at the same time. Giving them autonomy makes it easier for them to carry out their activities without feeling like they have to do things a certain way to perform (Vélez Berríos, 2020). Walmart also motivates its employees with incentives and promotions. Promotions and commendations will work well in Peru and in establishing a healthy working environment in the company.

Walmart has previously had trouble in international business. Going global has not been easy for the company, and thus, the importance of evaluating its strategy before getting into the Peruvian market (Vélez Berríos, 2020). There are many cultural considerations that the company needs to make before it decides to settle for Peru. The company must also have a vision. The first thing they should consider is to ensure that the managers can effectively communicate in Spanish. Leadership competencies such as being ethical are important in this case. Peruvians might lie and not tell the truth even when one needs to hear the truth. However, if the leader is honest with the employees and suppliers respectfully, they will also be honest. For Walmart to be successful globally, it should stop focusing on the strategies it uses in the countries where it is successful. Transactional leadership works in America but has low chances of survival in Peru. It is important to ensure that they study their markets and adapt to the cultures of their new markets.

References

Al Khajeh, E. H. (2018). Impact of leadership styles on organizational performance. Journal of Human Resources Management Research, 2018, 1-10.

Avery, G. C., & Bergsteiner, H. (2020). Practices for enhancing resilience and performance. In Sufficiency Thinking (pp. 235-247). Routledge.

Bonsu, S., & Twum-Danso, E. (2018). Leadership style in the global economy: A focus on cross-cultural and transformational leadership. Journal of Marketing and Management, 9(2), 37-52.

Nora, U. N., Alberto, A. C., & Pradeep, B. (2018). Impact of agricultural exports on the economic growth of Peru: the case of avocado and grapes. Russian Journal of Agricultural and Socio-Economic Sciences, 75(3), 3-11.

Pagda, Z., Bayraktar, S., & Jimenez, A. (2021). Exploring culture and leadership after 23 years: A replication of GLOBE project in Turkey. Journal of International Management, 27(1), 100822.

Spillan, J. E., & Rahman, M. N. (2020). Cultural Issues Affecting Business Activity in Chile and Peru. In Doing Business in Chile and Peru (pp. 47-65). Palgrave Macmillan, Cham.

Vélez Berríos, L. (2020). Walmart’s Successful Business Strategies Leading to Competitive Edge in the Retail Industry. Manufacturing Competitiveness;