Tag Archives: lies design business stories kids germany Wal-Mart

The lies we are told at school

I wanted to address a pet peeve of mine that recently came to a head after a couple of business classes. This pet peeve is being given false stories of business successes or failures. I explored this earlier with the article titled Maxims are true until till they are not. Recently, I started my summer business courses and had the frustrating experience of listening colleagues engage in what they thought was a serious discussion about two business examples which were completely untrue.

In this class, the students mentioned Wal-Mart’s failure in Germany and Chevy Nova’s failure in Mexico as two anecdotal examples of failures in International Marketing. What incensed me was the trivial nature of discussions about these two stories. One member of the class explained that the reason WalMart’s failed in Germany was because of cultural missteps where greeters at the door offended German sensibilities. Not only is this patently untrue, the professor did not correct this persons mistake. The class then went on to discuss this absurdity for 20 minutes.

The research article “Why did Wal-Mart fail in Germany?” written by Andreas Knorr and Andreas Arndt clearly point out the reasons for the failure of Wal-Mart which I’ve quoted below:

• A fundamentally flawed entry-by-acquisition strategy,
• a management by “hubris and clash of cultures”-approach to labor relations,
• a blatant failure to deliver on its legendary “we sell for less – always“, “everyday
low prices” and “excellent service” value proposition, and
• bad publicity due to its repeated infringement of some important German laws
and regulations.

As the article points out, cultural missteps were only one part of the problem but that had more to do with Wal-Mart’s relations with its German employees and its relationships with its labor unions more than affecting German consumer sensibilities.

The second story was about the Chevy Nova. The story told was that the car failed in the Mexican market due to the word Nova which means “No Go” in Spanish. I’d had heard this story before but not in a marketing class and something rang patently untrue about it and I did some research and apparently, I’m not the only one who felt the same way.

This article from Snopes which is a site dedicated to revealing urban legends, presents compelling reasons for why the ‘Nova’ story might be untrue.

* First of all, the phrase “no va” (literally “doesn’t go”) and the word “nova” are distinct entities with different pronunciations in Spanish: the former is two words and is pronounced with the accent on the second word; the latter is one word with the accent on the first syllable. Assuming that Spanish speakers would naturally see the word “nova” as equivalent to the phrase “no va” and think “Hey, this car doesn’t go!” is akin to assuming that English speakers woud spurn a dinette set sold under the name Notable because nobody wants a dinette set that doesn’t include a table.

* Although “no va” can be literally translated as “no go,” it would be a curious locution for a speaker of Spanish to use in reference to a car. Just as an English speaker would describe a broken-down car by saying that it “doesn’t run” rather than it “doesn’t go,” so a Spanish speaker would refer to a malfunctioning automobile by saying “no marcha” or “no funciona” or “no camina” rather than “no va.”

* Pemex (the Mexican government-owned oil monopoly) sold (and still sells) gasoline in Mexico under the name “Nova.” If Mexicans were going to associate anything with the Chevrolet Nova based on its name, it would probably be this gasoline. In any case, if Mexicans had no compunctions about filling the tanks of their cars with a type of gasoline whose name advertised that it “didn’t go,” why would they reject a similarly-named automobile?

* This legend assumes that a handful of General Motors executives launched a car into a foreign market and remained in blissful ignorance about a possible adverse translation of its name. Even if nobody in Detroit knew enough rudimentary Spanish to notice the coincidence, the Nova could not have been brought to market in Mexico and/or South America without the involvement of numerous Spanish speakers engaged to translate user manuals, prepare advertising and promotional materials, communicate with the network of Chevrolet dealers in the target countries, etc. In fact, GM was aware of the translation and opted to retain the model name “Nova” in Spanish-speaking markets anyway, because they (correctly) felt the matter to be unimportant.

While not definitive, (which would require sales numbers for the Chevy Nova in Mexico which are not available), they do a credible job of casting doubt on the story. With this sort of doubt on the credibility of this story, it’s inexcusable that this example gets cited as a failure in International Marketing at a business school.

Last point, a couple of weeks ago Don Norman held a talk at our school and made the claim that Disney Executives prefer to have long lines for their rides (but show you videos to make you feel like you are not waiting for a long time). Of course, as a complete counterpoint to his claim, I watched a video in my Operations Management class where Disney Executives were on record as wanting to reduce customer wait times (and would rather have them buying items and consuming food at their restaurants) and therefore implemented a FASTPASS system.

It’s contradictory stories like this which should make all of us a lot more vigilant and unwilling to accept these stories that are told to us. And it’s not just about business. Paul Graham had a very interesting essay about the lies we tell children which was a great read.