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1 Trade Union and International Labor Relations “Do It the Wal-Mart Way” Presented by group 5: Shady Ismail Michael Shumyater Michelle Robertson Ann-Kristin.

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Presentation on theme: "1 Trade Union and International Labor Relations “Do It the Wal-Mart Way” Presented by group 5: Shady Ismail Michael Shumyater Michelle Robertson Ann-Kristin."— Presentation transcript:

1 1 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 Presented by group 5: Shady Ismail Michael Shumyater Michelle Robertson Ann-Kristin Hocke Fanny Voluer

2 2 Agenda US Country Profile Germany Country Analysis Social Political Cultural Economic Labor regulations Expatriation Wal-Mart Case Recommendations US Country Profile Germany Country Analysis Social Political Cultural Economic Labor regulations Expatriation Wal-Mart Case Recommendations

3 3 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 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

4 4 The US Labor Union Membership Source: Adapted from data obtained from the Bureau of labor and Statistics;

5 5 The US Labor Union Demographic Source: Adapted from data obtained from the Bureau of labor and Statistic;

6 6 Germany Country Analysis

7 7 Social Structure Population peak at 82 million Various cultures Diverse religions Population peak at 82 million Various cultures Diverse religions

8 8 Social Structure (Cont’d) The Elite The Self-employed Salaried employee The Workers The Elite The Self-employed Salaried employee The Workers

9 9 Political Stages  Federal Republic  Parliamentary system based on constitution  Three bodies to check and balance  Federal Republic  Parliamentary system based on constitution  Three bodies to check and balance

10 10 Culture Entrepreneurship and open competition is not encouraged Labor unions are extremely powerful Capitalism is not favored Entrepreneurship and open competition is not encouraged Labor unions are extremely powerful Capitalism is not favored

11 11 Culture (Cont’d) Open competition is crucial for economic growth Cooperative economy Use of consensual business model Open competition is crucial for economic growth Cooperative economy Use of consensual business model

12 12 Culture (Cont’d) No capitalism – social market economy instead No strong CEO Job security and stability for years Protection Against Dismissal Act No capitalism – social market economy instead No strong CEO Job security and stability for years Protection Against Dismissal Act

13 13 Economy One of world’s most important economic powers Fluctuation in GNP Heavily export oriented One of world’s most important economic powers Fluctuation in GNP Heavily export oriented

14 14 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 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

15 15 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) 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)

16 16 Expatriate Profile American PCN Working within the company in Germany Staying in the host country for 2 years American PCN Working within the company in Germany Staying in the host country for 2 years

17 17 Becoming an Expatriate Apply for Visa  Residence visa Obtain a Work Permit  Self-Employed  Employee of a Company Apply for Insurance Apply for Visa  Residence visa Obtain a Work Permit  Self-Employed  Employee of a Company Apply for Insurance

18 18 Adjusting in Germany Applying for housing Obtaining a driver’s license Understanding the language Creating social networks Applying for housing Obtaining a driver’s license Understanding the language Creating social networks

19 19 American vs. German: Work Ethics Americans Strong work ethics Impersonal employer- employee relationship Informal communication Work importance Americans Strong work ethics Impersonal employer- employee relationship Informal communication Work importance Germans Strong work ethics Good employer- employee relationship Formal communication Family importance

20 20 US Responsibilities for Expatriates US Taxes Voter Rights Social Security US Taxes Voter Rights Social Security

21 21 Repatriate Issues Emotional Social Occupational Emotional Social Occupational

22 22 Wal-Mart

23 23 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 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

24 24 “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 Failure in the expatriation process  No adaptation to the German culture  No pre-departure training Denial of differences between Germany and the United States

25 25 Why Wal-Mart failed Low price strategies did not work Poor product qualities Dirty stores Disrespecting employees Weak service Low price strategies did not work Poor product qualities Dirty stores Disrespecting employees Weak service Wal-Mart in Berlin

26 26 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 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

27 27 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 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

28 28 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) 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)

29 29 Recommendations (Cont’d) Provide pre-departure training Provide pre-departure training (Dowling & Welch, 2005, p. 122)

30 30 Concluding Comments Wal-Mart’s 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 Wal-Mart’s 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

31 31 References 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_id=4968&layout=rich_story 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_id=4968&layout=rich_story

32 32 Thank You For Your Attention Questions? Thank You For Your Attention Questions?


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