Skills and Training in Multinational Firms: Wal-Mart Stores, Inc - Case Study Example

Wal-Mart, the world’s most profitable company, has 1606 stores in 15 nations and employs 300,000 people overseas (Carlisle, n.d This success has drawn attention of diverse group of liberal activists and organizations. It is sheer size, growth and profitability of Wal-Mart that it is in a position to define corporate trends. Wal-Mart serves as a huge reservoir for low-wage workers. No doubt Wal-Mart monopolizes labor and retail markets but through this it is able to keep worker compensation and retail prices low (Heyer, 2005). They are able to attract low-income people for profits. Various law-suits have arisen against Wal-Mart but these very people have proved to be the loyal supporters. The poor in fact clamor for Wal-Mart to open new outlets and those who protest are labeled as rich elitists who are against the poor having access to jobs and low-priced goods. Human resource management is a stronghold of Wal-Mart as right from the inception they did not believe in allowing or forming a union (Levy & Losch, 2002). They felt it was detrimental to the interest of the company and the union only fed itself from both the management and the labors. They believed in exhorting their own people, motivating them through incentives and awards such as company stocks by which they could also make up for the low wages. Not only does Wal-Mart maintain quotas for hiring minorities and women, it also requires its business partners to employ a sufficiently diverse workforce of minorities and women (Carlisle, n.d.). Wal-Mart employs immigrant workers so labor is cheap. They also take in independent contractors who cannot organize unions under labor law. It is able to control labor costs, hires temps, part-time workers. Wal-Mart is vertically integrated and it employs its own workers for all major operational functional including warehousing. When criticisms have been raised against its high-turnover of employees, Wal-Mart counters that if jobs were bad, why would so many people apply for them in the first place? Wal-Mart clarifies that its associates and employees have full access to management to exchange ideas and concerns freely and hence the need for unions is not felt necessary (Johannson, 2005). In fact other organizations are taking a cue from Wal-Mart and are trying to justify that unions are not necessary. Wal-Mart is not breaking any law to stay unions-free. Wal-Mart has a systematic method of tracking employee grievances and taking immediate action to attend to them in order to prevent them from seeking the help of a union. This amply demonstrates its concern for its workers as well as manages to keep the organization free from unions. While Wal-Mart may take pride in its human resources practices in US, the situation differs across nations and they would need to make diversity management plans for China. Hofstede believes that the culture in which an individual is immersed since birth is likely to have a much stronger effect on him than the organizational culture (Hope & Mühlemann, 2001). Chinese national culture and work-related values, the roots of which can be found in Confucian, Tao and Buddhist thinking, have been shown to be important determinants of work behavior. This conforms to Hofstede’s theory that culture at birth has a much stronger influence on an individual than the organization culture. Cultural values impact recruitment and selection, training and development, and placement and promotions. Rapid growth in China calls for development of skills but state intervention poses limitations. Self-initiatives are suppressed. The emphasis is on general training and not specific to the vocation or technical training. This leads to serious shortage of skilled workers and mangers at all levels. There is a great likelihood for skill mismatch. The government recognizes this problem. Those above 35 are not keen to take challenges in learning new technology while those under 35 nurture ambitions but local culture does not permit them to question authority. Motorola took up this challenge through its university as it recognized the Chinese government’s need for IT literacy. It developed a coherent and well-organized strategy to recruit and develop young Chinese managers and grow them in the company through in-house external and overseas education and training (Shaw, 2005). Although Wal-Mart has allowed unions in China, they have an advantage as the unions in China are more concerned that the government policies are enforced rather than representing the unions (Brenner, Eidlin & Candaele, 2006). Hence the mindset of the people has to be changed as they lack in workplace ethics. During the Mao rule, certain events undermined the confidence of the people in the Chinese government and the corruption that still exists continues to weaken this confidence (Jacobs, n.d.). There are no international labor laws that can be enforced in China which makes progress difficult to achieve. Wal-Mart, because of its sheer volume of imports from China, is in a position to establish a framework of incentives which would in alignment with its own perceived needs. To attract the right employees, Wal-Mart should focus on the needs of the workers and ensure that what they offer is line with their expectations. If their own economic interests are met, they would serve for the betterment of the company. Wal-Mart would have to ensure training of staff in the right skills. Human interaction skills are very important in China as the customers are not educated. They are not trained in the self-service buying process and hence this places a greater responsibility n the staff (Gamble, 2004). They would need to be trained in human interaction and skills of persuasion because the service offered by the sales staff would be crucial to Wal-Mart’s success in China. While product knowledge would be important, sales staff technology is not important in China as selling is more of negotiations. The social skills would have to be given importance during recruitment which can be honed and developed. People are well educated and there is a larger pool of candidates to select and recruit from. Younger people are attracted by the prospect of training and promotion. An orientation program would help motivate the new recruits as they place great significance to be working at a multinational. This would require familiarization with the company products, culture, and enhancement of social skills. Positive customer feedback can serve as performance appraisal and a base for salary enhancement. Training and motivation should be such that retention is taken care of. The skills required take considerable amount of time and effort to develop and hence attrition would result in higher costs for the company. Labor turnover in China is low because most firms offer the same or lower wages, which is in line with Wal-Mart’s global policy. Hence the service sector is characterized by the growth of cheap, poorly qualified workforce which remains involved in repetitive work where even technology is used as a matter of routine. Even though Wal-Mart is known for its use of technology, in China the recruitment and selection process would require assessing the learning capacity for basic training. Since the younger generation is well educated, this would not pose a problem but care would have to be taken for training and motivation which is essential for retention. Wal-Mart is known for high attrition rate and non-unionization of staff which would not pose a problem in China. Social skills need special attention as the customers are untrained in self-buying skills. They youth are willing to start at a low salary because of prospects of promotion and training. Thus lower labor costs would enable Wal-Mart to devote greater attention to training and development. References: Brenner, A., Eidlin, B., & Candaele, K., (2006), Wal-Mart Stores, Inc., 20 July 2007 Carlisle, J. K., (n.d.), Wal-Mart Embraces Controversial Causes, 20 July 2007 Gamble, J., (2004), Skills and Training in Multinational Firms: The Perspective from British and Japanese Retailers in China, 20 July 2007 Jacobs, M., (n.d.), PROCESSES OF MARKET TRANSITION AND THE EMERGENCE OF PRIVATELY DEFINED CORPORATE CODES OF PRACTICE IN CHINA, 20 July 2007 Johannson, E. (2005), WAL-MART: ROLLING BACK WORKERS’ WAGES, RIGHTS, AND THE AMERICAN DREAM, 20 July 2007 Heyer, S. F. (2005), Objectivity and Action: Wal-Mart and the Legacy of Marx and Nietzsche, UW-L Journal of Undergraduate Research VIII Hope, C. A. & Mühlemann, A. O. (2001), The impact of culture on best practice production/operations maangement, International Journal of Management Reviews, Vol. 3 No. 3 pp. 199-217 Levy, M. & Losch, P. A. (2002), Top Discount Merchandisers Analyzed via the Value Framework, 20 July 2007 Saimee, S., Yip, L. S. C., & Luk, S. T. K., (2004), International marketing in Southeast Asia, International Marketing Review Vol. 21 No. 3, 2004 pp. 247-254 Shaw, S., (2005), The corporate university, Journal of European Industrial Training Vol. 29 No. 1, 2005 pp. 21-39 Read More