BUS 629 Final Assignment

WALMART ANALYSIS FOR EXPANSION INTO THE PHILIPPINES 1

Walmart Analysis for Expansion into the Philippines

Jocelyn F. Brooks

BUS 621: Leadership & Teamwork

Professor Michael Powers

December 2nd, 2019

WALMART ANALYSIS FOR EXPANSION INTO THE PHILIPPINES 2

USAID Administrator, Mark Green, made a powerful statement as it relates to foreign

market expansion. He stated, “The purpose of foreign aid is to the end the need for existence.”

This quote made by Green thoroughly describes the thought process surrounding Walmart and its

expansion into The Philippines.

The Philippines has become one of the world’s fastest growing economies in the last five

years. As a result of the spike in economy, Philippines has become one of the leading countries

for international expansion. Philippines has created several government and non-government

organizations to help promote foreign investments. Some of these programs include “The

Philippine Exporters Confederation, the Bureau of Export Trade Promotion, and the Philippine

International Trading Corporation (Veem, 2017).” The Philippines have also partnered with a

US-based organization called Millennium Change Corporation (MCC) to make the international

trade process a much smoother one. The Philippines was also one of the founding countries in

the World Trade Organization (WTO) in 1995. Because of its trade agreement with the WTO,

the country has become more attractive to other of its member nations. As it relates to

international ownership, the Philippines requires all international businesses to be managed in

the country. Therefore, the businesses owned by the U.S. cannot be managed in the U.S.

Filipino President Rodrigo Duterte has recently begun to look at relaxing the sector

limitations regarding foreign exchange. The previous limitation of 40 percent is in the process of

being relaxed, making the Philippines a more attractive country to open a Walmart location in.

Philippines also participate in 326 “ecozones.” Ecozones are areas composed of export

processing zones, free trade zones, and certain industrial estates (Veem, 2017). In this ecozones,

goods can be imported without customs duties. In addition to not having to pay custom duties,

Walmart could have the potential to avoid taxes and travel fees. President Duterte also plans to

WALMART ANALYSIS FOR EXPANSION INTO THE PHILIPPINES 3

transform any publicly funded business into a private sector. As a result, Walmart will be able to

contribute to any industries that were previously unavailable.

When contemplating the expansion and growth of Walmart into Philippines, there are

two types of leadership models which are brought to my attention relating to the transition into

the international market. The first leadership model needed is Strategic Leadership. “Strategic

leadership is defined as a manager’s potential to express a strategic vision for the organization, or

a part of the organization, and to motivate and persuade others to acquire that vision (Juneja,

2015).” Strategic leaders create goals and visions for the company and express those visions to

its employees. Strategic leaders also can still be successful when faced with difficulties or

challenges while attempting to carry out their goals or visions. One of the main focuses for

strategic leaders is to create an environment where their employees can predict the organizations

needs as it relates to their own roles. Strategic leaders also encourage their employees to carry

out their own ideas. To be a successful strategic leader, one must be able to predict the growth

of the company and be able to look at the broader picture of the company. Strategic leaders

typically possess the following characteristics: loyalty, motivation, compassion, self-control,

social skills, self-awareness, articulacy, consistency, reliability and readiness to delegate and

authorize (Juneja, 2015).

The second leadership style that comes to mind when attempting to expand Walmart

internationally is transformational leadership. “Transformational leadership is defined as a

process that changes and transforms people. It is concerned with emotions, values, ethics,

standards and long-term goals (Northouse, 2018).” The main goal for a transformational leader is

to empower its employees and nurture them as they approach change. Transformational leaders

also typically become strong role models for their employees. They build trust with their

WALMART ANALYSIS FOR EXPANSION INTO THE PHILIPPINES 4

employees and they become that person that everyone wants to mirror. Transformational

leaders are not selfish leaders. They allow their employees to express their thoughts and

viewpoints and are not opposed to different points of views. They also create visions. The

vision created by the transformational leader becomes the focal point for the company. It allows

the leader to know where the company is headed in the future. Transformational leaders

typically possess the following characteristics: encouraging, motivating, creates ethical work

environments, and provides coaching and feedback to its employees. When entering the

international markets, strategic leadership is more necessary than transformational leadership.

Strategic leadership is going to allow the leader to demonstrate their vision for the company to its

employees and it persuade its employees to act upon the vision presented by the leader. Strategic

leadership will also aide employees in responding to stakeholders outside of North America. I

feel that transformational leadership would be useful once Walmart becomes established and

successful in the international markets. There are several competencies which would be

beneficial to have as a leader of Walmart attempting to operate a business in Philippines. Those

competencies include “open-minded and flexible in thought and tactics, cultural interest and

sensitivity, able to deal with complexity, resilient, resourceful, optimistic and energetic, honesty

and integrity, stable personal life, and value-added technical or business skills (McCall &

Hollenbeck, 2002).”

Cultural leadership is necessary for leaders of Walmart when expanding into Philippines.

Cultural leaders build networks and establish relationships. To become a cultural leader, one

must change himself and those around him. As a cultural leader, one has more opportunities to

network with other people of culture. Networking is the most important cultural concept needed

as a leader of Walmart. Being able to network with Filipino leaders will help Walmart become

WALMART ANALYSIS FOR EXPANSION INTO THE PHILIPPINES 5

more successful once they start business in the Philippines. Building a relationship with Filipino

leaders will help U.S. leaders know what to expect when stepping into the international market in

the Philippines. The leaders will help U.S. leaders to be prepared for any challenges or

difficulties which may be presented.

There are several leadership skills needed to foster team and organizational success in the

Philippines. The first leadership skill needed is communication. As a leader, one must be able to

effectively communicate with its employees regarding organizational goals and international

expansion. Leaders who can effectively communicate must master all forms of communication.

A leader who can effectively communicate is going to be essential when expanding

internationally into the Philippines. The leader must be able to communicate with clarity and

concision and be able to actively listen to any questions or concerns their employees may have.

Another leadership skill needed for the international expansion is positivity. Positivity is very

important when a company is about to go through a major change. Employees want to be able to

surround themselves with positivity and know that their leader is always going to have positive

outlooks on any forthcoming changes the company may face. I feel that as a leader of Walmart,

one must keep a positive attitude as international expansion comes with many challenges and

difficulties and if the leader is able to possess a positive spirit, it will make those challenges that

much easier to tackle. Trustworthiness is another leadership skill needed as a leader of Walmart.

As a leader of a company who is undergoing a major expansion, employees want to know that

they can trust their leader. Being able to trust your leader will promote a positive work

environment and will drive more favorable results surrounding the productivity of the company.

When undergoing the expansion into the Philippines, it is imperative that employees have a

trustworthy relationship with their leader. This will put the employees at ease by giving them a

WALMART ANALYSIS FOR EXPANSION INTO THE PHILIPPINES 6

sense of hope knowing that their leader would never make a business decision that would affect

the company in a negative way. A creative leader is necessary for the expansion. Expanding

into a country that is not like the United States, will require a creative leader. The leader will

have to think “outside of the box” when it comes to marketing strategies and implementing them.

I believe that, when facing the difficulties of the expansion, the leader will have to have a non-

traditional approach in problem solving.

I chose to expand Walmart into Philippines based on its economic data. The current

population of the Philippines is 108,726,377 residents. The population of the Philippines is

equivalent to 1.4 percent of the total world population. The population density in the Philippines

is 363 per kilometers squared. The total land area is about 115,124 square miles. The

Philippines has an urban population totaling about 47.1 percent. The median age in the

Philippines is 24.4 years of age. Philippines ranks 15th amongst 43 countries in the Asia-Pacific

region. Also, the country’s overall score is above both regional and world averages. Under the

leadership of President Duterte, the country has continued to grow strongly in economics. “The

growth of the Philippines is driven by state-funded infrastructure projects, which has allowed the

government to prioritize domestic law-and-order issues over economic policy concerns. Also,

the combined value of exports and imports are equal to 70.7 percent of GDP (The Heritage

Foundation, 2019).”

As I begin to analyze Philippines and its culture, I will use GLOBE’s nine dimensions of

culture study to describe the complexities of expanding into this country. The first dimension is

uncertainty avoidance. “This dimension refers to the extent to which a society, organization or a

group relies on established social norms, rituals and procedures to avoid uncertainty.”

(Northouse, 2018) Philippines is a country that exhibits high uncertainty avoidance. This

WALMART ANALYSIS FOR EXPANSION INTO THE PHILIPPINES 7

country is extremely meticulous, and they also rely heavily on formal policies and procedures.

Philippines is also a country which has a very strong resistance to change and they take moderate

and careful risks. The second dimension is “the degree to which members of group expect and

agree that powers should be shared unequally (Northouse, 2018).” At a score of 94, Philippines

have a high-power distance. This country’s society is differentiated into classes. Also, resources

are only available to a select few. Additionally, information is localized and hoarded.

Information is often only given to hierarchy and higher social classes and not lower social

classes. The third GLOBE dimension is institutional collectivism. “This dimension describes

the degree to which an organization or a society encourages institutional or societal collective

action. This dimension is concerned with whether the cultures identify with broader societal

interests rather than individual goals and accomplishments (Northouse, 2018).” Philippines have

low institutional collectivism. This means that members of the country assume they are largely

independent of the organization and society’s economic system tends to maximize the interests

of the individuals. Additionally, rewards are typically driven by the individuals who contributed

to the success and the critical decisions are made by the individuals. The next dimension is In-

Group Collectivism. In-Group Collectivism refers to “the degree to which people express pride,

loyalty and cohesiveness in their organizations or families (Northouse, 2018).” This dimension

is solely concerned with the devotion that individuals have with their families. Philippines has a

high in-group collectivism culture. This means that duties and obligations are important

determinants of social behavior. Also, there is a strong distinction made between in-groups and

out-groups. In the Filipino culture, high in group collectivism also consists of a slow pace of

life, as well as love holds very little to no weight in marriages. The fifth GLOBE dimension is

Gender Egalitarianism. “This dimension measures the degree to which an organization or a

WALMART ANALYSIS FOR EXPANSION INTO THE PHILIPPINES 8

society minimize gender role differences and promotes gender equality.” (Northouse, 2018).

This dimension is concerned with how much societies determine roles their members play in

organizations, homes and communities by biological sex. The Filipino culture has low gender

egalitarianism. This means that fewer women have positions of authority and there is more

occupational sex segregation. Also, there is a lower level of femal education attainment in

comparison to males. Another characteristic of the low gender egalitarianism culture possessed

by the Philippines is women are granted little to no decision-making roles in the community.

The next dimension is assertiveness. Northouse defines this dimension as “the degree to which

people in a culture are determined, assertive, confrontational and aggressive in their social

relationships.” This dimension is concerned with how much culture or society forces people to

be aggressive. Philippines have a high assertiveness society. This means that they value

competition, success and progress. Also, the Filipino culture expects to build trust on basis of

calculation, and they expect subordinates to take initiative. Being a highly assertive society,

Filipinos try to have control over the environment. The next dimension is future orientation.

“Future orientation is the extent to which people engage in future-oriented behaviors such as

planning, investing in the future and delaying gratification (Northouse, 2018).” This dimension

emphasizes the importance of planning and preparing for the future. The Filipino culture is a

high future orientation society. This means that society saves now for the future and they

emphasize working for long-term success. They also tend to have more flexible and adaptive

organizations and they view material success and spiritual fulfillment as an integrated whole.

The seventh GLOBE dimension is performance orientation. Northouse describes this dimension

as “the extent to which an organization or a society encourages and rewards group members for

improved performance and excellence.” Performance orientation is concerned with whether

WALMART ANALYSIS FOR EXPANSION INTO THE PHILIPPINES 9

members of society are awarded for meeting and accomplishing goals. The Philippines have a

high-performance orientation society. Their society values training and development, as well as

competitiveness and materialism. Additionally, the Filipino society views formal feedback a

necessity for training and they value what one does more than who one is. Their society also

expects direct, explicit communication. The last GLOBE dimension is humane orientation. This

refers to “the degree to which a culture encourages and rewards people for being fair, altruistic,

generous, caring and kind to others (Northouse, 2018).” This dimension surrounds empathy and

if society can show support and sensitivity to others. The Filipino culture has a high human

orientation. This means that the interests of others are important in their society. Also, the

members of society are responsible for promoting the well-being of others and people are urged

to be sensitive to all forms of racial discrimination.

In conclusion, the global expansion of Walmart into the Philippines is one that will

require a strategic leader who will promote positivity, build trustworthy relationships and who is

an effective communicator. This expansion will require strong marketing and networking skills

to ensure that the company is strong enough when difficulties arise.

References

WALMART ANALYSIS FOR EXPANSION INTO THE PHILIPPINES 10

1. Northouse, P. (2018). Leadership. Retrieved from

https://content.ashford.edu/books/Northouse.2016.18.1/sections/navpoint-1

2. Veem. (2017). 5 Ways the Phillipines is Attracting International Trade. Retrieved from

https://www.veem.com/library/5-ways-philippines-attracting-international-trade/

3. Juneja, P. (2015). Strategic Leadership- Definition and Qualities of a Strategic Leader.

Retrieved from https://www.managementstudyguide.com/strategic-leadership.htm

4. White, S. (2018). What is Transformational Leadership? A Model for Motivating

Innovation. Retrieved from https://www.cio.com/article/3257184/what-is-

transformational-leadership-a-model-for-motivating-innovation.html

5. McCall, M., & Hollenbeck, G. (2002). Developing global executives: The lessons of

international experience. Retrieved from https://www.shrm.org/resourcesandtools/hr-

topics/behavioral-competencies/leadership-and-

navigation/pages/leadershipcompetencies.aspx

6. Attard, T. Cultural Leadership as a way of Changing People. Retrieved from

https://www.culturepartnership.eu/en/article/workshop-moldova

7. Doyle, A. (2019). Important Leadership Skills for Workplace Success. Retrieved from

https://www.thebalancecareers.com/top-leadership-skills-2063782

8. The Heritage Foundation, (2019). Phillippines. Retrieved from

https://www.heritage.org/index/country/philippines

9. Hofstede Insights. What About the Phillippines? Retrieved from https://www.hofstede-

insights.com/country/the-philippines/

10. Virkus, S. 2009. Leadership Dimensions: Culture and Leadership. Retrieved from

https://www.tlu.ee/~sirvir/IKM/Leadership%20Dimensions/humane_orientation.html

11. GLOBE. 2016. Results-Phillippines GLOBE Project. Retrieved from

https://globeproject.com/results/countries/PHL?menu=list#list

12. Worldometers. 2019. Philippines Population. Retrieved from

https://www.worldometers.info/world-population/philippines-population/

13. Worstall, T. (2017). Walmart Expands Again in India- But Still Not Able to Open

Consumer Stores to Consumer Detriment. Retrieved from

WALMART ANALYSIS FOR EXPANSION INTO THE PHILIPPINES 11

https://www.forbes.com/sites/timworstall/2017/04/30/walmart-expands-again-in-india-

but-still-not-able-to-open-consumer-stores-to-consumer-detriment/#5fc4c2a61173