Investigating challenges brought about the Walmart/Massmart merger in South Africa

Abstract

Mergers and acquisitions are widely used global market entry strategies, which have the potential to change the business landscape in various ways, such as cultural shift, business practices and resources transfer. Walmart’s growth and global expansion strategies have and continue to be premised on acquisitions and mergers. The South African merger was fraught with challenges from civic society, groups, businesses and government who all believed that employees would lose jobs, in the hope of transforming the retailing landscape. On the other hand, the arrival of Walmart in South Africa was welcomed by Massmart, which had been struggling to sustain its competitiveness in the contemporary retail market. The market, employees and communities were apprehensive of the impact of the merger on culture; therefore, it was imperative to conduct this study to establish the challenges arising from the merger. This study was informed by the interpretivist methodological assumption resulting in the collection of qualitative data through an inductive process. A sample of twelve participants was selected using non-probability purposive and convenience sampling techniques. Sample elements were selected for being readily available, accessible and possessing relevant data required to address the research problem. Data were collected from participants through in-depth face-to-face interviews guided by an interview protocol. Interviews were recorded with the aid of a voice recorder, of which the transcriptions were decoded into themes using NVivo 10, a qualitative data analysis programme. Emerging themes were analysed through thematic data analysis to extra rich data sets. The study established that the merger created anxiety amongst staff, market and different stakeholders. New management embarked on a serious change management education drive to diffuse tensions and resistance. There was a paradigm cultural shift that required stakeholder involvement to ensure the success of the merger. The study recommended that, prior to engaging in mergers, firms should conduct extensive and thorough research to allay fears amongst stakeholders.