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Unformatted text preview: ings of the research and conclusions. This is
followed by recommendations for business and academics in the field. The chapter will
conclude with recommendations for future research. 7.2 Main Findings The research studied how Wal-Mart engaged with stakeholders during entry into a
developing market, South Africa. There is widespread recognition in literature that entry
into a new market requires the identification and management of stakeholders. The
research found that government and trade unions were the key stakeholders pertaining
to Wal-Mart’s entry into South Africa.
The motives of the government were, at worst, to protect local suppliers and, at best, to
improve their position with Wal-Mart/Massmart. The government’s main priority is to
create jobs with a key driver being manufacturing. According to government the merger
threated local jobs because Wal-Mart will be likely to shift from local suppliers to cheaper
imports. Accordingly, government required Wal-Mart to commit to buying certain
volumes in South Africa.
Trade unions were equally concerned about the impact of Wal-Mart’s entry on jobs and
their interests aligned with government in this regard. However, trade unions ’ concerns
went even further. They were concerned that Wal-Mart, given its anti-union reputation,
would reverse the wheel in so far as labour rights at Massmart are concerned, 77 suspecting that Wal-Mart would cancel the existing agreements with labour unions.
There was also the case of about 503 workers who had been retrenched by Massmart
months before Wal-Mart announced it take-over of Massmart. The unions required these
workers to be reinstated and see their retrenchment as part of ‘dressing up’ Massmart
for the Wal-Mart take over.
While there were attempts at holding social dialogue between the parties, none of these
yielded positive results. There was hardly any stakeholder engagement by Wal-Mart,
most communication with stakeholders was left with the target, Massmart. Massmart
itself did not have a clear stakeholder engagement strategy and most of its activity was
reactive. Apart from one or two meetings held there was no engagement with the
leadership in government and trade unions. The entry of Wal-Mart into South Africa was
characterised by acrimonious relationships with stakeholders and protracted litigation.
7.3 Implications for Practitioners The recommendations arising from this research to managers of MNEs seeking entry
into emerging markets is to get stakeholder management embedded in their strategy.
Managers must study the culture and the socio-political environment of the markets they
wish to enter and have a good sense of how far culturally these markets are from them
(Ghemawat, 2001). The corporate centre must be involved in the execution of an entry
strategy, and senior management, especially the CEO, must directly engage with
stakeholders. Entering through an acquisition should not be viewed as an opportunity to
avoid this responsibility. The target can advise but not substitute the acquirer in
An important implication for management too is the acceptance that engagement does
not simply entail informing stakeholders of what is going to happen. Rather, it is
78 engaging with them openly, keeping in mind that some of their issues may have to be
taken on board, with possible implications for the firm’s strategy or its execution.
Managers also need to think beyond short-term wins with stakeholders, it about the long
term, and this may mean accepting short-term losses. 7.4 Recommendations for Future Research The entry of Wal-Mart into South Africa is on-going. A follow-up study similar to this, but
with the benefit of time, might provide a better understanding of the phenomenon.
Further research could compare Wal-Mart’s entry into South Africa with their entries into
other emerging markets from a stakeholder point of view. Future research could
examine Wal-Mart’s behaviours in relation to other global retailers in a similar context, to
identify common and distinguishing factors.
A great need still remains for future research to assist in better understanding the link
between strategy and stakeholder engagement. An empirical study of how companies
combine the two could yield great insights and lessons. 79 BIBLIOGRAPHY
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This document was uploaded on 01/24/2014.
- Winter '14