Walmart's recruitment approach in Mexico

The concept of strategic human resource management has become a thing of great concern to both practitioners and researchers alike as they seek to understand the impact of globalization on strategic global human resource management (SGHRM) (Martin and Beaumont, 1998; Lepak and Snell, 1999; Dowling et al., 1999; Harvey and Novicevic, 2002). The main reason behind this is the increased global competition, which is fast becoming the norm, and research has shown that, if the present growth rate of globalization is taken into view, trade between nations will exceed that within nations by 2015 (Daft, 1997). The importance of global human resource management is more significant in the retail industry because it is very difficult to survive without scanning the world for cheaper and higher-quality suppliers, as well as competitors (Gregersen et al., 1998). In the kind of environment that is presently obtainable, global human resource management has become crucial for the success of any given firm, while also becoming more complicated and difficult to administer (Grant, 1996; Kamoche, 1997; Boxall and Purcell, 2000; Harvey and Novicevic, 2003). Past studies have also supported this idea by identifying human resources as important for organizations seeking to gain a strategic competitive advantage on a global scale (Wright et al., 1994; Lepak and Snell, 1999). Thus, management must now develop a pluralistic view of the management scope in order to encourage and maintain multiple views that will be used to solve complex global issues (Aguirre, 1997; Harvey et al., 1999; Reynolds, 1997).

In the case of Wal-Mart, as discussed in the case, it was made known that the company recognized the importance of expanding its market in order to increase its sales and overall profitability. Thus, the decision was made to internationalize, and Mexico became the target country. Although the country maintains a border with the USA, any idea that it would have similar features to the American market in terms of retail purchases was refuted from the start. For Mexicans, shopping is more about buying what is needed presently, as there is no light to store bulk foods like in the USA, and thus Wal-Mart experienced failure within the first period of operation because they entered the market with the American view. However, the company was quick to understand the significance of a pluralistic view when operating in a foreign market (Aguirre, 1997; Harvey et al., 1999; Reynolds, 1997), and they easily took cognizance of the differences between the two markets. Such cognizance was featured in the fact that Wal-Mart quickly changed its retail store pattern to that of Mexico by opening small stores across the city and offering fresh products as demanded in the country.

The concept of "glocalization," as featured in the idea of thinking globally while acting locally, has been discussed extensively in business management and human resources literature (Boyacigiller and Adler, 1991; Brewer, 1992; Daniels, 1991; Parkhe, 1993). The idea presented here is that companies should value globalization and internationalize in order to increase profitability, but such internationalization should be based on meeting the needs of local customers. As noted by Ilinitch et al. (1998), globalization is having the same impact on human resources as it is on management. On a general note, cultural differences influence the choice of goods and services as well as the nature of demand in any given market. For instance, while pasta is for Italians, salads are for Americans, and Chinese prefer rice. Additionally, while the Americans are masculine by nature, the Swedish are feminist. Thus, the purchase behavior of customers will differ across markets, which means that the first step in internationalization should be to study the differences in culture and align products and services with standards obtainable in these cultures. Thus, glocalization is increasingly being adopted in the HRM practices of international brands such as Wal-Mart (Fiol, 1991; Lado et al., 1992; Rumelt et al., 1991) because it is the only way these companies can actually meet their objective of increasing sales without drifting from what is culturally obtainable in these markets.

From all indications, the recruitment approach adapted by Wal-Mart is the globalization approach (Lado and Wilson, 1994). This is because the company focused more on recruiting local staff that understood the needs of the market more precisely and were capable of making decisions that would positively influence growth in that particular market. The significance of glocalization as a HRM strategy has been extensively discussed in the literature (Baird and Meshoulam, 1988; Lengnick-Hall and Lengnick-Hall, 1988; Milliman et al., 1991), and the importance has been identified for better understanding the market because the employees have lived their lives in the market.This will allow businesses to better tailor their products.

In the case of Wal-Mart, the company understood this importance, and the outcome was as projected by past literature because the company experienced growth immediately after changing its shopping style to that of Mexicans, as accorded in the case study. Thus, it can be seen that localizing HRM practices is very important in international markets because this is the only way that companies can better align their objectives with the needs of customers and effectively increase sales.

While localization in international markets is considered important, it should be noted that such approaches will not allow for standardization, which means that companies will not take advantage of economies of scale. For multinational retail brands such as Wal-Mart, this is a thing of great concern because success is only measured by the volume of sales generated, and standardization is the only way that such sales volume will continue to rise. Past literature has also linked standardization to increased profitability in international business (Adler and Ghadar, 1990; Kobrin, 1992; Milliman et al., 1991). Thus, localizing in all the markets will not allow the company to apply similar strategies, which will mean an increase in operation costs as well as training and development programs for the respective HRM practices in all the differing markets. This understanding is most likely the driving force behind the increased importance of standardization in Wal-Mart Mexico. The brand took notice of the fact that the American market was once like that of Mexico, in which goods were purchased in smaller volumes until such shopping behavior was changed by the arrival of mega malls like Wal-Mart. Thus, this created the need to standardize the Mexican market with similar shopping behavior as is available in the USA. Slowly but surely, Wal-Mart successfully standardized the Mexican market, and this is considered one of their revolutionary marketing approaches as it increased both the overall appreciation of the Wal-Mart brand in the country as well as sales of goods. Inevitably, Wal-Mart became the major retailer in the Mexican market, and the effects of continued innovation in the HRM context are what the company is currently benefiting from.

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