Walmart in Germany

INTRODUCTION

The main purpose of this report is to understand the National business Systems and the analysis of institutional and cultural factors in the light of Wal-Mart in Germany and USA and also to find out the reasons for the failure of Wal-Mart in Germany by critically analysing the transfer of Wal-Mart in Germany and most importantly the comparison of both Systems and their success and failure.

Define National Business systems (NBSs) and Compare the NBSs of Germany and USA. Provide examples to illustrate your points

Richard Whitely introduced the concept of business systems in the business world. According to him “ A business system consitutes a colleciton of institiutions serving to shape economic transactions, cooperations and control inside ande between business and organization whitely 2002. Sorge 2004 )”

Before going to further details we should discuss the characteristics of business systems which are as follows.

Characteristics of business systems

Fragmented Business system

Small owner managed firms mostly owns, involve and run their businesses in fragmented business system. Due to the absence of the regualtions, shortage of capital and lack of confidence in different firms this sort of business system grows in low context cultures and normally the state remains neutral. Fragmented business system has the short term result orientation that’s the reason it can easily convert the firm from one product to another service it means that the owner has the autonomy to mature the business by his own tactics like innovation and experimentation because of less competition in the fragmented market the owner has the flexibilty to change a bit in the business

Coordinated Industrial District:

The coordination between employers and employees is pretty much high in this sort of business system and employees shows high level of stance and commitment one of the reason behind this is that they do not impose immense pressure on their selves because they are well backed up by the government, large industries and banks and aimed to provide quality products as the commitment level between employer and employees is higher so it makes a good platform to function against the competitors and providing the quality products.

Compartmentalized

The role of owner in this type of business is to arrange the finance for the business he do not plays an active role but he is responsible to manage the finance for the business and this is the main thing which differentiates this system with others. They include larger units as compare to fragmented business system the reason being this system contains higher capital relatively to others. It involves the minimum level of confidence