Sam Walton’s Rules of Business and Cultural Dimensions of Hofstede and Trompenaars

Sam Walton’s Rules of Business and Cultural Dimensions of Hofstede and Trompenaars

 

 Shriram Venkatraman, G.V. Suresh and P.Govinda Reddy

Proceedings of First International Conference on Business Anthropology which was held during May 17-20, 2012 at Sun Yat-Sen University in Guangzhou, Guangdong Province, China, edited by Confeence Committee, Pp.155-171.

Several social sciences and management experts give credence to the fact that the culture of an organization is influenced to a large extent by its founder or leader, who is mostly an entrepreneur in a Business environment.  The founder/leader/entrepreneur in turn can be influenced by the society’s culture that he/she lives in. Wal-Mart Stores Inc., as a retailer tops the list of fortune 500 companies. Though, giant in size, execution and revenues, it portrays a quality that still follows the legacy and the culture built by its founder Mr. Sam Walton. His list of ten rules for a successful business is still followed religiously at Wal-Mart and is also a motivator to several developing entrepreneurs. The rules laid down by Mr. Sam Walton are Commit to your business, Share your profits, Motivate your partners, Communicate everything possible, Appreciate everything, Celebrate success and find humor in your failures, Listen to everyone, Exceed your customers’ expectations, Control your expenses and Swim upstream. Though the rules/ideas might not be conceptually new, they are appreciated because of the person from whom it flows. As Sam Walton himself says in his biography ‘Made in America’, the rules he put forth have originated from his empirical experience, where each of these rules have been personally tried and tested over time by him.

Albeit understanding a society’s culture was made simple with the introduction of Cultural Dimensions by Social Scientists like Hofstede and Trompenaars, it will be interesting to examine the business rules followed by Wal-Mart against these cultural dimensions.  However, this paper builds on the cultural model for entrepreneurship developed by Lee and Peterson (2000), which focuses on the dimensions introduced by Hofstede and those of Trompenaars.  This paper explores the ten Rules of Sam Walton and discusses these rules in the light of   the cultural dimensions of Hofstede and Trompenaars.

Lee and Peterson’s work forms the basis of the cultural dimensions of Hofstede and Trompenaars for a successful entrepreneurial environment, which is once again correlated with the Cultural dimensions of United States. The paper evidenced the correlation of Sam Walton – a very successful entrepreneur’s values and ideals with the cultural model of entrepreneurship of Lee and Peterson.

A conducive entrepreneurship environment according to Lee and Peterson’s cultural model of entrepreneurship created by the entrepreneur as a leader would be to maintain a Weak Uncertainty Avoidance, Low Power Distance, High Levels of Masculinity, Individualistic, Achievement oriented and Universalistic in approach.   

When Sam Walton’s Business Rules are fitted with both Lee and Peterson’s cultural model of entrepreneurship and a Rule by Rule approach to see its fit with the dimensions of Hofstede and Trompenaars, one gets to witness that for a conducive entrepreneurship environment created by the entrepreneur as a leader would be to maintain a Weak Uncertainty Avoidance, Low Power Distance, a balance between Masculinity and Feminity, a balance between Individualism and Collectivism, be Achievement oriented and Universalistic in approach. An undercurrent of the dimension of Internal Control that needs to be exerted by an entrepreneur is also visible.

It also becomes interesting to note that though Sam Walton exerts certain aspects to fit in with Feminity or Collectivism, it also has an undercurrent of a strategy that finally aims to outdo the competition, which can be a very Masculine characteristic. Similarly is the case with Collectivism too. His rules thus, very clearly say that one needs to have qualities of Feminity and Collectivism, but at the same time, not lose the big picture, that business is competition.

In view of this, studies such as this show that branding National Cultures as the culture of people of that specific nation, need not work always. Though, United States of America is typically called as a Masculinity oriented, Individualistic culture, Sam Walton’s moderation in these dimensions show otherwise. He is very American (even his book is called “Made in America”), however, not all his thoughts and values reflect a Masculine oriented Individualistic culture. Individual case studies of leaders with influence such as Sam Walton might reflect and repose a better understanding of National Cultures.

This exercise is an attempt at showing that individual level case studies of values and ideals of successful entrepreneurs, can throw immense light on the true nature of cultural dimensions. Further, these dimensions might change on a case by case basis. The values and the cultural dimensional fit of the values of a first generation entrepreneur, as compared to a Chief Executive or to a second generation owner of family business might be different. This is also a step towards understanding that “One Size Does Not Fit All”.

The study is a step in striving to understand analytically the values of a successful entrepreneur in terms of cultural dimensions and conducive entrepreneurial environment; however, empirical evidence might be needed to understand this further.

Such studies with entrepreneurial values of successful entrepreneurs in growing economies like India and China need to occur more often to understand the cultural systems of these countries much better. As emerging economies, attracting international attention, there is an urgent need to conduct research into the values and ideals of successful entrepreneurs belonging to these countries and quantify them through cultural dimensions in order to gauge the changes in cultural value systems and understand the effect of globalization in these economies. This can also provide an understanding of the direction that these economies are heading towards.