Human Resource Practices to the Vital Business Initiatives of the Wal-Mart Stores - Research Paper Example

? Final Project Number: Final Project Wal-Mart is one of the biggest organizations the world over. It employs 2.2 million people in the worlds and 1.4 million of these are in the United States. It runs over ten thousand, seven hundred stores in about twenty seven countries in the world. Founded in 1862 by Sam Walton, it opened the first store in Rogers, Arkansas (Andersen & Narus, 1999). In a span of five years, Wal-Mart opened twenty four stores in Arkansas and this played a major role in elevating Wal-Mart into a $12.6 million business. By 1969, Wal-Mart had moved from a small business enterprise to an incorporated company Wal-Mart Stores Inc (Clemers, 1993). This paper will analyze Wal-Mart Stores and make recommendations to better align Human Resource practices to the vital business initiatives of the organization. First, I will examine Wal-Mart’s history and market position then describe and analyze the recent and targeted work procedures, as well as the respective skills, knowledge and abilities needed for Wal-Mart to achieve its objectives. I will also show the technology used by Wal-Mart to achieve work output in line with the company’s goals and provide a set of HRM recommendations suitable for Wal-Mart. The 1970s saw Wal-Mart emerge as one of the leading companies with a significant economic growth (Andersen & Narus, 1999). It acquired the Hutcheson Shoe Company and started a section of pharmaceuticals called Wal-Mart pharmacy. There was an increase in both the workforce and turnover. Wal-Mart rose to become a huge retail company with 276 stores, 21,000 employees and a turnover of over US$ 1.248 billion after a decade. The 1980s and the 1990s saw it rise from a huge national retail chain of stores into an international business. Within this period, Sam’s club was opened and a super center was launched becoming a conventional shop in several regions and countries worldwide (Dreher & Dougherty, 2001). By this time, it had one thousand four hundred and two stores, one hundred and twenty three Sam’s clubs, and it sales were over US$ 26 billion. From humble beginnings, Walton’s brain child has become one of the organizations that have contributed immensely to the world (Weinswig & Tang, 2010). The retail shops, discount stores and super centers have had a great impact on shops and consumers in the world today. To date, the organization has a workforce of over 2.2 million (Dreher & Dougherty, 2001). The company also gives its services to 176 million consumers all over the world. Credit goes to Sam Walton and Wal-Mart for setting precedence to the world by upholding principles and running an immeasurable successful organization. In this paper’s analysis, I saw the need for the company to be more responsive to customers by improving their current and target work processes so as to ensure urgent and precise actions are taken in responding to their customers’ needs. The three key objectives they should focus on in order to achieve this are fulfilling specific customer requirements, achieving high levels of customer satisfaction and trying to adapt to the needs of business and market environments that change every day. Wal-Mart is capable of achieving these objectives while still maintaining and improving profitability and market share. This work processes can be met by linking workgroups and their processes in the internal customer and supplier chains. Once this is achieved, this linked functional work processes will become the major cross functional processes by which Wal-Mart’s externally focused business objectives will be met (Weinswig & Tang, 2010). These key cross functional business processes will be highly dependent on the way in which the management at Wal-Mart will structure their work processes (Dreher & Dougherty, 2001). They can do it in two ways; through the delivery work processes, which refers to the customer facing processes, and the support work processes, which are those that are required to sustain the delivery functions. The delivery work processes required at Wal-Mart involve the product service development process, customer order process and product service maintenance process. These three delivery work processes should each have their own department (Vance & Scott, 1994). The product service development process should be headed by the Products Development Manager whose work will be to ensure the growth of new product offerings from the concept all the way through research, development, introduction, and update to the withdrawal from the market. The customer order process should be headed by the Customer Care Manager who will deal with the requirements of customers for products or services from the moment the customer enquires all through the distribution and sale (Dreher & Dougherty, 2001). The product service maintenance process should be headed by the Product Development manager, whose job will be to provide after sale services and support. One the other hand, the support work processes required at Wal-Mart should entail the human resource acquisition process and the business management process (Vance & Scott, 1994). The human resource acquisition process should be headed by the Human Resource Manager whose job should be to provide and maintain Wal-Mart’s personnel from manpower, planning, skills profile, recruitment, induction, training and development. Also, the HRM should be in charge of succession plans, motivation, appraisals, disciplinary actions, termination, retirement and pension administration (Vance & Scott, 1994). The business management process should be headed by the Business Manager in charge of managing the business operations from defining the future vision and mission of Wal-Mart to developing long term business plans, defining the business objectives, annual opportunities and financial planning. The Business Manager should also monitor performance and provide functional guidance and direction to business plans review and revision (Dreher & Dougherty, 2001). My analysis also showed that Wal-Mart has put in place relevant technology requirements needed to achieve work output in the line with their goals. One of these technological considerations is the radio frequency identification (RFID), which has increased its employee’s productivity. This has helped replenish shelves up to three times. It has also helped keep tracks on the products and maintain low cost of production (Neumark, Zhang & Ciccarella, 2005). Nonetheless, Wal-Mart still requires fresh innovative strategic responses in advancing the technology requirements relevant to increasing competency and productivity of its employees (Neumark, Zhang & Ciccarella, 2005). This innovation should entail putting new ideas into commercial use such as creating new products or services, using new production technologies and techniques and the implementation of innovative processes. In line with this, Wal-Mart should improve process quality, speed and flexibility, without incurring crippling cost burdens (Dreher & Dougherty, 2001). It should compete on new terms by designing the company in new ways. Information technology should be one of the driving forces, which will lead Wal-Mart to this competitive advantage. Nowadays, customers are increasingly making unique and unpredictable product demands and most of them want the product services that are right for them instantly. In my analysis, I realized that predicting customer demands and articulating product specifications is becoming very difficult for Wal-Mart. Hence, it should recruit employees with relevant technological requirements who can adapt to the dynamic product changes so as to increase productivity. Another thing is to institute stable processes that employees can use in line with the rapid and unpredictable technological transformations occurring in the world today (Neumark, Zhang & Ciccarella, 2005). This will, in its place, allow the company to build stable, but flexible, platforms of process capabilities on a continuing basis, and; thus, enhance the employee’s technological knowledge and increase process efficiency, which is a clear indicator of a stable process of change (Dreher & Dougherty, 2001). On Wal-Mart’s labor market, my analysis indicated that, when Wal-Mart opens any new store, it employs hundreds of workers and the number of people applying for jobs is usually over 20 times higher than the number of positions to be filled. When a new Wal-Mart store opens, it usually has about 400 workers resulting in other competing retail stores losing most of their work force to Wal-Mart upon its entry in a given area. I found out that there is an improvement in retail positions in any area that Wal-Mart chooses to open a new store and, when Wal-Mart opens a new store, this leads to increased retail employment. This, hence, translates in one Wal-Mart worker replacing roughly 1.4 workers in other retail stores (Fishman, 2007). This entry, by Wal-Mart, causes a drop in retail income in the areas of operation and means a drop in prices; hence, increasing the purchasing power of the customer because prices are reduced not only at Wal-Mart, but in other stores, as well. Therefore, customers benefit the most. Low income families tend to benefit the most despite the fact that labor market cost may be also unfavorable (Dreher & Dougherty, 2001). I realized that the entry of Wal-Mart, in most of these areas, was not well received by the local people. Many have attempted to block its entry in their communities with a multitude of excuses (Winstanley & Woodall, 2000). The salient one being that it is the cause of low wages in retail something Wal-Mart management has refuted more so concerning the issue of employment (Fishman, 2007). They contend that in most of the areas where Wal-Mart operates they have instead created several job opportunities for other business apart from their own. When a company is considering the retail section of each region, employees cannot move from one region to another and customers can only shop in their own region, and this then justifies the entry of Wal-Mart in the local market in the retail division. The labor demand in a certain retail sector is a derived demand and therefore affected by diverse factors in the market for retail services (Dreher & Dougherty, 2001). With this in mind, Wal-Mart affects labor demand in the retail sector by sufficiently supplying for the retail services and adopting technology which will change labor intensity in the retail sector. In order for Wal-Mart to reach new levels of performance, I recommend that the company empowers the workforce by creating teams that are responsible for deciding how much to do in any given phase and how to do it effectively. Most employees give their best when they think that it is valuable and appreciated (Dome, Jarmin & Klimek, 2008). Wal-Mart should hire workers who share the company’s passion and are totally committed, devoted and enjoy what they are hired to do. Such employees who are proud of what they do motivate their fellow workmates into achieving greatness and as a result end up being the driving force behind the company’s business. It is difficult to retain workers if the management itself lacks the passion needed at the work place. By creating self motivated teams, the creativity and talents of the team members will be realized. Wal-Mart should recognize workers who succeed in serving customers. This is a good incentive for them to do a greater job for high performing workers are driven mainly by basic rewards (Dreher & Dougherty, 2001). Workers at Wal-Mart should be remunerated well based on other workers in other teams and other relevant external labor markets, not forgetting the overall economic performance of the company. I also recommend that Wal-Mart be committed to a total compensation system that includes the basic wages, short term incentive pay, benefits, pension, vacation and privileges like unrestricted car and parking allowances. Wal-Mart should realize that the main factor of an effective compensation system is the desire to uphold a meaningful degree of competitiveness that is reflective of the relevant external labor market conditions (Dome, Jarmin & Klimek, 2008). Recommended also is effective planning, measurement, control and improvement of the major work processes at Wal-Mart. This will deliver a business, which is under control and efficient; has high levels of customer service and satisfaction; and a business in which every employee understands their role within the wider work process (Winstanley & Woodall, 2000). It will guarantee that coordinated performance measures focus on customer satisfaction and process efficiency. This will also prompt a culture of continuous improvement hence creating an environment where change is less influenced by inter-departmental wrangles (Dreher & Dougherty, 2001). All these can simply be attained by setting up a defined style of discipline and commitment born out of years of the company’s improvement process. Another recommendation is for Wal-Mart to empower their employees technologically and engages them in relevant training systems that embrace a dynamic product and stable process change. This will ensure that they meet customers’ needs by providing variety. It will result in increased efficiencies because the employees will be building on existing long term process experience and knowledge (Dreher & Dougherty, 2001). Technology is a key strategic resource for success in today’s new competitive environment and is time and again the driving force behind this success. In conclusion, this paper shows that, in today’s world, everything seems to be changing, from markets to customer demands to technologies, global boundaries, not forgetting products and processes. For any company to succeed within this competitive environment, there is a need to make critical competitive decisions that will boost the current positions of their companies and install procedures that will guarantee the future success of the company. The best way to go about this is by enhancing better Human Resource practices to the vital business initiatives of the organization. References Andersen, J. C., & Narus, J. A. (1999). Business market management, understanding, creating and delivering value. New Jersey: Prentice Hall. Clemers, R. (1993). Leadership theory and research: Perspectives and directions. New York: Academic Press. Dome, M., Jarmin, R., & Klimek, S. (2008). Information technology investment and firm performance in U.S. Retail Trade, Economics of Innovation and New Technology, 13(7), 56-65. Dreher, G., & Dougherty, T. (2001). Human resource strategy: A behavioral perspective for the general manager. New York: McGraw-Hill/Irwin. Fishman, C. (2007). The Wal-Mart effect. New York: Penguin books. Neumark, D., Zhang, J., & Ciccarella, S. (2005). The effect of Wal-Mart on local labor market. Washington, DC: National Bureau of Economics Research Working. Vance, S. S., & Scott, R. V. (1994). Wal-Mart: A History of Sam Walton’s retail phenomenon. New York: Twayne Publishers. Weinswig, D., & Tang, C. (2010). Equity research: Wal-Mart Stores Inc. (WMT). New York: Citi Groups Global Markets. Winstanley, D., & Woodall, J. (2000). Ethical issues in contemporary human resource management. Basingstoke: MacMillan. Read More