Posted by: bklunk | November 29, 2006

I’m Not Sure This is What Gandhi Had in Mind

From E-Lam:

More Globalization

Wal-Mart to open retail stores in India

    The world’s largest retailer, Wal-Mart, has just made a deal to open up stores in India. Wal-Mart has joined forces with Indian Telecommunications conglomerate, Bharti Enterprises Ltd, to set up hundreds of stores across the country. Wal-Mart had previously been restricted from setting up stores in India because if a law that prohibits foreign multi-product retail chains from opening up in India. Because India was able to join up with a Indian company, it is able to circumvent the law.

    This deal brings together two of the central examples in Thomas Friedman’s The World is Flat. I found this piece of news very ironic and a symbol of how globalization has grown and spread throughout the world. Wal-Mart and its global supply chains are now going offer is low prices to the hard working Indian workforce. It is very interesting how these two important factors of globalization are now just beginning to cross paths. The world is growing to be the same. India now shares the same discounted prices with its counterparts in America.

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  1. This certainly is reminicent of Thomas Friedman. I also think that it’s interesting how this article shows how state laws can be gotten around with globalization. This law may have been to prevent foreign retailers access to the Indian market for soverignty reasons or it might be an infant-industry protectionist policy, or some other reason. However, because Wal-Mart was able to link up with the Indian company, the law no matter what its purpose, was irrelevant. This seems to be what Friedman was hinting at, that the modern conception of ‘state’ may be changing.

  2. Before my senior trip, I would agree with Professor Klunk and consider this information extremely ironic. However, after spending three weeks of June in India, news like this can hardly be a shock. While reading freidman’s examples that he listed within his book, it was like reading about my own trip. India was the exact opposite of what i had expected to find there. There are several malls in all major towns, many including American brand name stores such as Lacoste and Oakley. The people there were also extremely different. meeting many of them around the malls and at McDonalds, it was apparent that they were making a valiant effort to “Americanize” their way of life. Also, although there wasn’t necessarily a Wal-Mart anywhere around, there were many retail stores mainly in big cities such as Delhi that we went to a few times. Therefore, the news that India has finally signed a deal to obtain a Wal-Mart seems much more inevitable than it is shocking.

  3. I think another question may be whether or not this is a positive move for India. Obviously many Americans look harshly at Walmart’s business practices and policies and they have been repeatedly accused of treating workers unfairly and for selling goods produced in sweat shops and other questionable facilities. What I find ironic is the fact that many of the “sweat shops” used to produce Walmart’s low cost products are found in countries such as India. So, will Indians find these practices as unethical as Americans do, or will more of the same?

  4. This doesn’t come as a surprise at all. Wal-Mart recently opened stores in China and why should India be any different. As for the effect that Wal-Mart will have on India will be very interesting to watch. As we can tell Wal-Mart stores will employ thousands of workers across India, but I’m not sure this will improve or enhance the like in India. This is due to the fact that the majority of workers employed by Wal-Mart are only part time. No one can sustain and support themselves on the salary that Wal-Mart offers. It is a good second job but that’s it. I’m not sure this will improve life for some of the lower class individuals in India. If Wal-Mart did offer more full time benefit influenced jobs in India and in the U.S. many more people would be able to benefit from Wal-Mart’s expansion.

  5. I agree that it will be interesting to see what effect Wal-Mart will have on India, and perhaps more importantly what Indians will think of the corporation. Will they find the work for Wal-Mart unethical?… I guess I look at the jobs that people have in India including telemarketing and customer service… jobs that are done for a lot less money than they were in the countries they were outsourced form. I think that itself is unethical. Granted, it is not anything to the degree of sweatshops, but I’m saying I think there are already some unethical things going on. There are plenty of other issues I could touch on such as female infanticide… I guess what I’m getting at is that it’s really hard for us to tell whether or not this would even seem unethical to Indians because they have such a different mindset and culture. Perhaps all they see from Wal-Mart is the benefit of low prices. So who knows? As the title of the blog already brought up, what would Gandhi think of this?

  6. What will Indians think of Wal-Mart? Especially since, like the blog said, Wal-Mart was able to circumvent Indian law by joining up with an Indian company in order to open up its retail stores; it really makes me wonder how Wal-Mart’s expansion into India will be received by Indians. I agree with Christi’s comment; India does have such a different culture and the people do have different mindsets (and not to mention issues that are already present in the country, like Christi mentioned), so it’s hard to say exactly what their reaction will be. This will certainly be an interesting topic to watch unveil in the upcoming months.

  7. Well it was just a matter of time before Wal-Mart made its mark in almost every country. They are a very aggressive company who is always striving to be the biggest and with expanding into India they are well on their way. Now if Wal-Mart does not integrate into Indian culture and try to make Wal-Mart appeal to the people of India they are in for a rude awakening. From experience in my business courses Wal-Mart has struggled to adapt to other cultures and be accepted by those people. Take for instance ASDA, which is the UK Wal-Mart, they have struggled a ton to get their stores to take off and India may be a similar case. It is hard, especially in today’s society to sell something that is iconically American. But right now Wal-Mart has the mentality that to be the largest means being the best. I do not necessarily feel that Wal-Mart going into India is a bad thing because Wal-Mart has done a ton for people in the Untied States. They are able to sell goods at a price that most can afford and maybe this is needed in India.

  8. I don’t think it is a good sign that without even opening a store, Wal-Mart has had to evade laws to establish itself. It poses the question how or will Wal-Mart evade laws regarding labor and treatment of workers? I don’t believe this is a good sign for workers in India, I hope the Indian firm Wal-Mart has partnered up with has better ethical practices. I do believe it is hard for American’s to guess how Indians will perceive Wal-Mart. With such poverty will Wal-Mart be able to supply jobs to the lowest class and if so will part-time low paying jobs be enough? I believe India may have too many issues to fight already such as Christi mentioned that labor standards at Wal-Mart may seem to be the least of India’s problems.

  9. This could get really interesting… Wal-Mart has always had a negative conotation to it but for some reason people tend to flock to it. Wal-Mart here at least has had major problems once opened and running, but now in India they start out by breaking the law before they even open. Thats a new one, even for Wal-Mart. I’m sure they’re next task will be openning up a huge Sam’s Club right next door (thats at least what they did in Cancun, Mexico–true story).
    Where very Wal-Mart goes there seems to be problems and with India becoming a modernized booming state, I don’t know how the two will mix. Wal-Mart might be getting a rude awakening.

  10. I just wanted to touch on the topic of Wal-Mart’s ability to provide jobs, either part-time or full-time. There is no doubt that Wal-Mart will of course provide hundreds of jobs to Indians, unfortunately, these jobs will more than likely be awarded to well educated people, at least a high school equivalent. It seems to me that Wal-Mart will end up feeding the middle and upper classes with both jobs and “low prices”. Unfortunately, I think that they will cause the gap between the thousands of poor people in India and the middle class to widen even more. The poorest of people in India tend to be uneducated, thus they won’t be able to get those part-time jobs. At the same time they make what living the can selling goods in markets, which people will soon be able to purchase for low prices at Wal-Mart. Wal-Mart would be taking away money from the poorest of people who need it most, causing the poorest of people to struggle even more to survive.

  11. I agree with some of the statements above that Wal-Mart might be in for a rude awakening. I dont know if I agree that a Wal-Mart will succed in India, is there even a demande for a such a retail store? I dont know, but certainly there has to be consquences for Wal-Mart opening a store in India, as there are always consquences where ever they open a store. It will be very interesting to see how the store does, and the effects it will have on the community it surronds.

  12. Without knowing much about the current state of the Indian economy it is hard for me to really know how to feel about the WalMart expansion. It seems that WalMart makes a practice here in America of preying on consumers who place cost ahead of things such as quality, ethics and community. I think it will be interesting to see what happens to the local Indian retailer, if they are undersold and forced out of the market as has been documented in some cases here in America.

  13. How interesting. I don’t know much about India’s economy, but I do know that India has some of the smartest computer scientists in the world. Knowing this and hearing that Walmart is making a home in India is kind of disappointing. I’m anxious to see Walmart’s impact in India.

  14. I believe that such a step as putting such a large retail corporation such as Wal-Mart in India, really puts this so-called “developing nation” on the same level as some of the world’s major powers such as China and the United States. Even though I disagree with many of the policies of Wal-Mart in the United States, I believe that such a corporation in India really helps to incorporate India into the international community, especially on an economic scale, giving the more than 1 billion people in India much more ability to expand into the global community.

  15. Opening of Wal-Mart retail chain in India would provide Indian consumers with low prices and the market a more competitive edge. It will also create jobs, perhaps even good standards of work rearly found in India. Most multi-national companies are aware of the huge potential of business in India, the market it just so gigantic. It is the second largest populated country mostly dominated by bargaining shops owned by small business operators. Wal-Mart will bring American retail culture into India, not a bad thing since it’s been such a success. I’m sure Gandhi would approve.

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