Trade Union and International Labor Relations Do It the Wal-Mart Way

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Trade Union and International Labor Relations
Do It the Wal-Mart Way

• Presented by group 5
• Shady Ismail
• Michael Shumyater
• Michelle Robertson
• Ann-Kristin Hocke
• Fanny Voluer

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Agenda

• US Country Profile
• Germany Country Analysis
• Social
• Political
• Cultural
• Economic
• Labor regulations
• Expatriation
• Wal-Mart Case
• Recommendations

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The US Industrial Relations

• Not as politically entrenched as in Germany
• 15.5 million labor members
• Men more likely to join than women
• The public sector has higher members than the
  private sector

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The US Labor Union Membership
Source Adapted from data obtained from the
Bureau of labor and Statistics www.bls.gov
5
The US Labor Union Demographic
Source Adapted from data obtained from the
Bureau of labor and Statistic www.bls.gov
6
Germany Country Analysis
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Social Structure

• Population peak at 82 million
• Various cultures
• Diverse religions

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Social Structure (Contd)

• The Elite
• The Self-employed
• Salaried employee
• The Workers

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Political Stages

• Federal Republic
• Parliamentary system based on constitution
• Three bodies to check and balance

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Culture

• Entrepreneurship and open competition
  is not encouraged
• Labor unions are extremely powerful
• Capitalism is not favored

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Culture (Contd)

• Open competition is crucial for economic growth
• Cooperative economy
• Use of consensual business model

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Culture (Contd)

• No capitalism social market economy instead
• No strong CEO
• Job security and stability for years
• Protection Against Dismissal Act

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Economy

• One of worlds most important economic powers
• Fluctuation in GNP
• Heavily export oriented

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Industrial Relations

• Organized at the industry-level
• Forbid employment at will
• Require at least 1 labor representative or work
  council per company
• German culture more rigid than the American
  culture

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Trade Unions

• Constitute a political force
• Union density 42
• Most unionized employees in the public sector
• manual workers
• white-collar
  workers
• Largest unions ver.di (3 million members)
• IG Metall (2.4
  million members)

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Expatriate Profile

• American PCN
• Working within the company in Germany
• Staying in the host country for 2 years

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Becoming an Expatriate

• Apply for Visa
• Residence visa
• Obtain a Work Permit
• Self-Employed
• Employee of a Company
• Apply for Insurance

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Adjusting in Germany

• Applying for housing
• Obtaining a drivers license
• Understanding the language
• Creating social networks

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American vs. German Work Ethics

• Americans
• Strong work ethics
• Impersonal employer-employee relationship
• Informal communication
• Work importance

• Germans
• Strong work ethics
• Good employer-employee relationship
• Formal communication
• Family importance

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US Responsibilities for Expatriates

• US Taxes
• Voter Rights
• Social Security

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Repatriate Issues

• Emotional
• Social
• Occupational

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Wal-Mart
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Wal-Mart Enters Germany

• 1997 acquisition of Wertkauf
• 1998 take over of Interspar
• Appointment of US citizen, Rob Tiarks, as CEO
• Ethnocentric approach unsuccessful
• Turnover rate of 2.3 billion

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Do It the Wal-Mart Way

• Failure in the expatriation process
• No adaptation to the German culture
• No pre-departure training
• Denial of differences between Germany and the
  United States

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Why Wal-Mart failed

• Low price strategies did not work
• Poor product qualities
• Dirty stores
• Disrespecting employees
• Weak service

Wal-Mart in Berlin
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Wal-Mart and Labor Unions

• Refuses to have labor unions
• Does not comply with local labor laws
• Faces huge strikes
• Ver.di forced Wal-Mart to respect the collective
  agreements for commerce

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Can Wal-Mart Recover?

• 2001 appointment of German CEO Kai Hafner
• Management tries to make efforts to satisfy
  employees
• New ethics code
• Ban on sexual relationships between staff
• Creation of an informer hotline

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Recommendations

• Recognize the cross-cultural ability of the
  expatriate
• Learn the host-country language
• Common assumption
• "Don't worry," the departing employee is told,
  "they all speak English over there!
• (Schmidt, 2004, p.3)

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Recommendations (Contd)

• Provide pre-departure training

(Dowling Welch, 2005, p. 122)
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Concluding Comments

• Wal-Marts ethnocentric approach was a failure
• Human resources failed to recognize cultural
  differences
• Wal-Mart survival only possible if labor is
  allowed to organized in Germany
• Good employee-employer relationship is the key to
  success

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References

• www.bls.gov
• http//ssa-custhelp.ssa.gov
• http//www.irs.gov/businesses/international/
• http//www.overseasdigest.com/country/germany.htm
• www.eurofund.gov.int
• www.expatexchange.com
• Dowling, P. J. Welch, D. E. (2005).
  International human resource management (4th
  ed.). Mason, OH Thomson/
• South Western.
• htt//www.ebusinessforum.com/index.asp?doc_id4968
  layoutrich_story
• http//www.commondreams.org/views04/0615-10.htm
• http//geogate.geographie.unimarburg.de/vgt/englis
  h/brd/module/m1/u10.htm
• http//www.sietareuropa.org/about_us/Newsletter/Ju
  n04/BridgingtheInterculturalGap.html
• http//www.usembassy.de/germany/working_in_germany
  .html
• http//www.germany-info.org/relaunch/business/tren
  ds/basics_system.html

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• Thank You For Your Attention
• Questions?