Merger of Wal-Mart and Massmart - Essay Example

?Management Affiliation with more information about affiliation, research grants, conflict of interest and how to contact Subject: Management. Topic:  Section1: Business Plan (Report Form) Section2: Literature Review. Section 1: Business Plan (in Report Format: approx. 1.000 words); Introduction: The organization selected to make the business plan is the merger of Wal-Mart and Massmart. Wal-Mart, which is one of the largest retailers on earth, is spreading its authority throughout the world, by opening its outlets in nine countries in Europe, Asia and South America. And Massmart Holdings Ltd is a one of the South African based firms that possess local brands, for example, Makro, Game, CBW and Builders’ Warehouse. It is the third biggest distributor of consumer goods in Africa, the biggest retailer of general goods, liquor and home development tools, and wholesaler of fundamental foods. There are numerous problems which Wal-Mart faces at present, and they are essentially significant in this extremely competitive business world. One of the principal problems arises from the teams and community groups in Walmart and Massmart. The difficulty experienced by Walmart is concerned with the building of cross-cultural teams in Walmart and Massmart. The paper intends to make a report regarding this problem, and give recommendations on the same. Setting up a proper work team in planning the future of Massmart, and building up a new vision have been found uneasy to achieve, and this can lead to the failure of Wallmart strategy. “Because of differences in culture, an employee posted outside his or her home country will experience confusion, alienation, disorientation, and emotional upheaval. This is known as culture shock” (Cross-Cultural Issues n.d pg 27).Even if no one can force to have such kinds of union in Wal-Mart, these troubles still hurt the industry itself. The unions and team complain that Wal-Mart stores take benefits from the stuff meant for sale. Based only on their revenue, they were not capable of providing health insurance and various other types of benefits. Wal-Mart workers normally give the business high performances, but they never obtain appropriate benefits and pay. In fact, they obtain an extremely low pay. “Wal-Mart may face several adverse consequences as a result of staffing and scheduling not being prepared appropriately” (How Strategic Management Handled Wal-Mart’s Reputation 2005). SUMMARY Purpose: The purpose of this report is to explain the various problems related to cultural differences in team and community group at the time of Wall mart in the acquisition of the Massmart Company in South Africa and to find some solution regarding the same. Scope: It explains the problems connected with team building, offers some possible solutions and assesses each of these. Effectual teamwork is necessary in the modern world. Team formation needs more time, and generally follows some easily identifiable phases, as the journeys of the team is from the state of being a group of unfamiliar persons to that of being a joint team with a common objective. Culture is the one of the significant ingredient that will helps to build strong team and group formation. So, cross-cultural difference among the two companies leads to various cross-cultural issues. “Effective team leaders can accelerate that process and reduce the difficulties that team members experience by understanding what they need to do as their team moves through the stages from forming to storming, norming and, finally, performing” (Forming, Storming, Norming and Performing 1996 Pg 1). Conclusions: The report recommends solutions and measures to avoid and conquer problem related to team and community group in Wall mart in the acquisition of the Massmart Company in South Africa. These kinds of solutions are based on the literature review of cultural issues. Wal-Mart is the world's major retailer and the biggest business in the world based on incomes ignoring earnings (profits), assets, and marketplace capitalization. At the same time, as Wal-Mart has been successfully carrying out its dealings in various other marketplaces, it also enforces development all throughout the global market. “While the goals that Wal-Mart has currently for its corporate strategy may lead them to their overall achievement, Team Wal-Mart does not believe that it will lead Wal-Mart into continued success”(Wal-Mart: Strategic management 2007 pg 2). Cross-cultural communication among the Wall-mart and mass mart elucidates how staffs from contradictory cultural backgrounds communicate, in like and diverse manner between themselves, and how they try to communicate across cultures. Recommendations: To conquer the problems, associated with the team and community groups, the organization should follow the instructions stated below. Successful project team and community group management needs an infrastructure favorable to cross-functional teamwork of the peoples and technology transfer in Wall-mart and Mass mart. Overall accomplishment of a team and community group depends on successful cross-functional incorporation. Each team must clearly recognize its task outputs, inputs, interface personnel, and transfer instrument of work. Set up appropriate teams and groups in relation to the requirements of the business and develop teams dedication and ‘spirit ‘. A combination of brainstorming sessions, focus-team sessions, exchanges of experience, and social congregations can be a powerful apparatus for concerting the work group into an efficient, fully incorporated, and united project team INTRODUCTION: This section of the report or business plan investigates all the problems encountered by the organization on issue of team and community group within Wal-Mart and Massmart during its merger and acquisition process. It is significant for Wal-Mart to examine all the problems associated with the business, and discover the solutions to conquer them, so that this will assist them to generate the chance for it to shine in the marketplace and be globally competitive for future. The acquisition was flourishing at every point, as it was well carried out. On the other hand, the success of it was limited due to issue of the issue of the human resources management. As mentioned, the business had not anticipated the problem of cultural dissimilarities and its implications. These malfunctions, if not addressed, will affect the profits of the company. In addition, by building up unfamiliar marketplace which encloses a different culture, atmosphere, and pattern, the business desires to be flexible in adapting to the latest environment. This policy is formulated with the intention of surviving and achieving benefits in marketplace. “Intercultural relationships, while exciting and rewarding, can also be difficult and challenging for even the most loving of couples” (Christy 2010 para.1). This report evaluates and describes the resolutions needed for ratification. Recommendations in the report are mainly based on the literature review on team management and team building.  BODY: Many organizations thinking training as an occasional problem. Wal-Mart considers training as a fundamental component of their usual work. The world ‘financial system’ has undergone drastic alteration in the last two decades. Cultural and geographical distances have shrunk considerably with the arrival of airplanes, global computers, fax machines, satellites of televisions broadcasting all over the world, and significantly the internet. These advances have permitted business corporations to broaden considerably both their marketplaces and their supplier sources. Wal-Mart is extremity delighted with its very strong culture, with a variety of references to the personal life story of the Sam Walton’s the history of the business and how Walton personal worth turned out to be core beliefs of the business. Massmart is basically a South African company, and due to the merger and acquisition, it turned out to be difficult for workers from America and Africa to convey the ideas and views freely. The problems of cross cultural dissimilarities have made it almost impossible for the company to function effectively. Cultural competence necessitate that organizations have a prescribed set of values and beliefs, reveal approaches, behaviors, structures and policies that permit them to work cross-culturally.“Culture is a powerful factor in shaping how people think, communicate and behave. It therefore affects how they negotiate” (Colonal 2007 Pg 1). Section2: Literature Review 2.1 Teams and Group Formation Groups and teams are the main elements in an organizational context. The organization and its sub units are completed through groups of people. Most of the activities within the organization need at least some amount of harmonization, and that can be achieved only through team effort. A perceptive of the features of the groups is essential for managers, if they have to control the behavior of employees at work place. The manager must be conscious of the influence of teams and groups and their result on the performance of the organization. According to Charles Handy (1993), a group is a set of people who recognize themselves as a group. People interact with one another in a group. But as far as organizations are concerned, they are more concerned in teams and their efficient functioning, for achieving of the objectives of the organization. “With an increasing concentration on working across functional divides, and an emphasis on flexibility; empowerment and innovation, the organizations of the twenty-first century will foster collaborative team working cultures and self directed or self managed teams” (Brooks 2007 Pg 84). Building a Team Though the idea of functioning teams in an organization is of recent origin, its significance and usefulness in the performance of the organization is widely recognized in every organization. The objective of team building is to improve the manner in which teams perform to increase their efficiency. “Team building and implementation is a very difficult, time consuming and continuous process. In order to introduce the team concept in an organization a proper environment is to be built and the culture of the organization is to be changed accordingly” (Mosha 2009 Pg 607). It is the responsibility of the top management to plan the team in an effective manner. Proper assignment of the roles to the team members is a must and if necessary, adequate training could be given in a successful way. The management should concentrate more on team performance rather than individual performance. Teams and Cross-Culturality Compared to virtual team building developing cross-cultural teams is also important in maintaining trust and honest criticism across culture. One of the most accepted frameworks for study of cross-cultural matter in human resource management is that offered by Hofstede (1980). The model is based on five dimensions along which cultural differences could be examined: high/low power distance, individualism/collectivism, high/low uncertainty avoidance, masculinity/femininity, and long/short time orientation. The purpose of cross-cultural team-building helps in increasing co-operative work performance and work harmonization, as well as optimizing the operation of individual character and culture resolute work-behavior in cross cultural teams. Types of groups There are two types of groups- Formal and Informal group. Formal groups are that which are formed by people of the same level or status within an organisation. Such a groups are maintained to achieve the objectives of the organisation, and to co-ordinate the functions of an organisation. The group members have defined roles and they adhere to the rules and relationships within an organisation. Formal groups are formed for a permanent period of time, and they are based on the tasks, position and technology in an organisation.Within the formal group, there is an informal group also. Such groups are formed on the basis of personal relationships among group members. It operates with the aim of promoting the emotional and social needs of its members. This type of group involves members from different levels in the organisation. The informal leader reveals the values and outlook of the group members helps in solving disagreements and also to direct the group in achieving the goals. Formation of Group and Team in an Organisation Individuals develop into groups or teams for reasons concerned with performance of work and group development. Some of the reasons for group information are stated below. Involvement between members to adjust formal working provision and to provide chance for imagination and idea. It improves co-operation, mutual perceptive and support among co-workers. It will help to resolve the problems related to work. Definite responsibilities will be carried out only through the hard work of a employees functioning together, and then only they can resolve the multifaceted troubles of the organization. It provides a strategy for normal, suitable behaviors. It helps to explain indefinite circumstances. Commitment to the team or group forms the as a basis of control over individual behavior, and regulation of individuals who assemble the standard. It looks after the wellbeing of members, and protects them from outside force or pressure. It provides a sense of belonging to the employees. The members feel a sense of individuality and the opportunity to obtain role appreciation and position within the team or group. Groups and teams are necessary in an organisation, as people who work together and persuade each other, are equally responsible for achieving common goals connected with organisational objectives, and consider themselves as social bodies within the organisation. Wall mart has a good team which actively work together to introduce new varieties of products. The leaders should spend their time necessary for the group development; impart training to boost the skills and aptitude of group member’s in generating a positive climate. It is particularly significant that leaders follow team leadership style. The group members should help the leader to achieve group efficiency skills in problem solving, individual enlargement, and job fulfilment, group members should be optimistic regarding the attainment of knowledge in dealing positive and negative feelings efficiently. Dealing suitably with judgment and approach raises the intensity of support, interpersonal faith, and cooperation within the group. The potential members may be anxious in knowing how much they will be accepted to reveal in a group, or the contact of dissimilarity between them and other group members. 2.2 Culture and its Influence on Teams and Groups Culture consists of a patterned mode of thoughts, emotions and response, comprising the distinct accomplishment of individual groups. “For a culture to exist, members of a group or society share a distinct way of life with common values, attitudes and behaviors that are transmitters over time in gradual, yet dynamic process”(Sparrow 2003 Pg 16). The dimensions of culture are explained elaborately by Hofstede through his cross-cultural studies. He explains that dimensions are a feature of culture and that can be treated with other cultures. His research had a significant result on other researchers and they have accepted it within the organization. Organizational culture is the normal way of perceiving the business world and taking necessary action. The major distinctive characteristic in an organization, the most significant competitive advantage, and the most authoritative aspect they all emphasize as an input element in their success, and they form the core of organizational culture. “Members of an organization understand the cultural values of their organization once they have worked there for some time. These values hold the organization together” (Fielding 2005 Pg 488). The Importance of Culture “Culture will also have an important effect on the attitudes to work of employees, aspects of motivation, loyalty to the business, personal initiative and collective responsibility” (Purdie, et al 2009 Pg 64). Influence of Culture on Team and Groups Just like individuals, groups also have distinctive uniqueness. “Team members develop shared values, beliefs, and assumptions. They create mutually understood and accepted rules and norms that influence their behaviors in and often outside of the group” (Wiethoff, 2009 Pag. 96). Problems can occur when people of different cultures come into contact with one another. Individuals from different cultures may react differently while working in a team or group. Because of the manner of differences in values (pertaining to their respective culture), they recognize things differently. It is found that the managers of the Wall mart have lack of experiences regarding the company culture. Managing cultural diversity in a group or team is a difficult task for the managers. Conflicts may occur at different times when people of different culture interact with each other. The manager should remove the main obstacle that hamper with people from different cultures working together. The best way to do this is through encouraging better communication. People of different cultures have different beliefs concerned with a given situation. Being conscious of such differences enables to successful cross-cultural team management. Wall mart faces cultural differences in the company when going to the local level. Cross-Cultural Team Cross-cultural communication explains how employees from contradictory cultural backgrounds communicate among themselves, and how they attempt to communicate across cultures. It becomes difficult for employees from America and Africa to express the ideas and views freely, due to the cross cultural problems. Cultural competence necessitates that organizations have a described group of values and beliefs, and reveal attitudes, behaviors, policies, and structures that allow them to work efficiently cross-culturally. Employees from different cross cultural backgrounds misinterpret one another, which possibly directs to conflict. For example, Americans constantly look for achievements and success in work. But Africans, seem idle or incompetent from the American view point. American managers set work further on personal needs, which is opposite to African work approach. In order to avoid the problems of cross culture, it becomes necessary for Wal-Mart to adopt a cross cultural learning system in the company. 2.3 Summary Groups and teams are the major ingredients of any organization. The business and its sub units are completed through groups of people. Most of the activities in on organization require at least some amount of harmonization throughout the course of groups or team effort, or else it may adversely affect the overall functioning of the company. Problems can occur when people of different cultures come into contact with one another. Individuals from diverse cultures may react differently when they work in a team or group. Due to the difference in the manner in people's values are formed in a certain culture, they recognize things differently. Reference List Brooks (2007). Organizational Behavior. Pearson Education India, South Asia. Colonal, L & Horst, PR (2007). Cross- Cultural Negotiations. Air War College Air University. Retrieved from < http://www.au.af.mil/au/awc/awcgate/awc/horst_crosscultural_negot.pdf> Charles Handy (1993), Cultural Clash and Cultural Due Diligence at DaimlerChrysler, GRIN Verlag, Germany. Christy (2010). The Challenges of Cross-Cultural Relationship and How to Overcome Them. Russian Online Dating. Retrieved from < http://onlinedating.russianlovematch.com/post/The-Challenges-of-Cross-Cultural-Relationships-and-How-to-Overcome-Them.aspx> Cross-Cultural Issues (n.d). egyankosh.ac.in Retrieved from < http://www.egyankosh.ac.in/bitstream/123456789/35556/1/Unit-20.pdf> Fielding, M (2005). Effective Communication in Organizations. Juta and Company Ltd, South Africa. Forming, Storming, Norming and Performing (1996). MIND TOOLS. Retrieved from < http://www.mindtools.com/pages/article/newLDR_86.htm> Hofstede (1980), Masculinity and Femininity: The Taboo Dimension of National Cultures, Sage publications, California. How Strategic Management Handled Wal-Mart’s Reputation (2005). Wal-Mart. Retrieved from < http://www.awpagesociety.com/wp-content/uploads/2011/09/Wal-Mart_CaseStudy.pdf> Mosha, BS (2009). Organizational Theory and Behavior (2Nd Edition), Ane Books Pvt Ltd, New Delhi. Purdie, et al. (2009). Global and Transnational Business: Strategy and Management, 2Nd Ed. John Wiley & Sons, New Delhi. Sparrow, et.al (2003). International Human Resource Management. CIPD Publishing, London. Wiethoff, C & Lumsden, L (2009). Communicating in Groups and Teams: Sharing Leadership, Cengage Learning, Canada. Wal-Mart: Strategic management (2007). Edjent.com. 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