Cultural Change at Flipkart

Following are the changes in Culture which can take place after the merger of Flipkart with Walmart

1. Flipkart brings culture of innovation and entrepreneurial zing while Walmart brings more stability and thoughtfulness. Walmart could bring in some entrepreneurial zing if it needs to adapt and stay relevant, while Flipkart could do with some deliberateness and process orientation
2. Flipkart would be known more as a retail company rather than just as an internet company without any brick and mortar presence
3. Flipkart is known for its luxury and extravagance, where it offers huge package to fresh graduates and offers luxurious offices. But after the acquisition by Walmart, this would bring more austerity. Walmart executives still fly in economy class and only recently the minimum wage has increased to $11 per hour.
4. The integration would create some much needed interdependencies. It may happened that Flipkart CEO will report to an executive at Walmart, but the rest of the Flipkart management team would be insulated from the functions at Walmart for a period of 12 months. After 12 months, some cross-reporting relationships could be introduced. Some Flipkart leaders can be given leadership roles in the combined entity, or in the larger Walmart organization.
5. The acquisition may also lead to the increase in attrition. Over a period of time, Walmart would certainly bring in elements of culture that they deeply value. After all, it is these elements of culture that have made them what they are today. This will result in some attrition at mid to senior management levels. This attrition may not be necessarily bad. It is natural selection. Those that fit in best and adapt would continue. The others would find new homes.

In our view, efficient integration will bring benefits for both parties. The two Companies Flipkart and Walmart can leverage from each other’s tech, domain expertise and supply chain. Now looking at the history of M&A, sometimes this has not worked effectively. When eBay acquired Chinese ecommerce company called EachNet, it tried to impose its culture on the latter and asked EachNet to drop its China product and switch to the eBay US product. eBay believed that they had a superior product in the US, but this lead eBay to lose its China market to AliBaba. Now this can be a good lesson for companies like Walmart. In any M&G, the Vision and purpose needs to be well articulated and communicated to create an ecosystem which can energize the employees. The Clear communication of the roadmap ahead, and how it can impact the people needs to be well informed. It also needs to be identified which people on both sides can help drive the transition and change, and then those people need to involved in the planning and execution.