Walmart Failure in Germany

Many companies’ ambitions to position themselves (profitably) in foreign markets or to establish themselves as “global players” have been thwarted by their inability to fully understand and to adapt to the specific conditions of doing business in other countries, exposing their profound lack of intercultural competence and management skills.

This is exactly what happened to Wal-Mart Germany. To begin with, it appointed four
CEOs during its first four years of operation. The first was Rob Tiarks, a US citizen and a Wal-Mart, Inc. senior vice president who had previously supervised around 200 US
Supercenters from the company headquarters in Bentonville, Arkansas. Not only did he not speak any German. Due to his unwillingness to learn the language – a view shared by most of the other US managers that were redeployed to Germany to assist him –,
English was soon decreed as the official company language at the management level.
What is more, he displayed an astounding degree of ignorance with regard to the manifold complexities and the legal and institutional framework of the German retail market, ignoring any strategic advice presented to him by former Wertkauf executives
– thereby encouraging the top three of them to leave within six months. After
Wal-Mart’s 1998 acquisition of UK retailer ASDA, Tiarks was replaced by Englishman Allan Leighton. In terms of his specific market knowledge as well as linguistically as inexperienced as Tiarks, he preferred to head the company from his Leeds, UK, office and was replaced as little as six month later by Volker Barth.59 The first German ever to be entrusted with the top job, and one of the few remaining ex-Wertkauf managers still aboard, he too failed to integrate Spar – a rather loose organization of largely independent regional units – into Wertkauf – formerly a highly centralized owner-controlled firm – and to blend their vastly different corporate cultures with Wal-Mart’s.
Since May 1st, 2001, Kay