Wal-Mart Employee Relations - Research Paper Example

 Diagnostic Analysis: Wal-Mart Employee Relations Introduction Founded in 1962 as a family business, Wal-Mart is one of the world's largest corporations, and it has been regarded as the world’s largest employer with over two million employees all over the world. Wal-Mart started off on the right foot based on a very good American principle of honesty, value to the customer and good employee relationship. In the few years that followed Wal-Mart’s establishment and its expansion to all corners of the United States, Wal-Mart became bad news to all its competitors such as Starbucks due to its ability to manage costs, increase per capita production output and ability to deliver service and variety at low prices to its customers. Over the years, though, things have not always been rosy for Wal-Mart because of various issues. New Era After the death of Sam Walton, its founder, in the early 1990s, things at Wal-Mart started becoming sour for the management. For instance, although Wal-Mart initially had a reputation for being able to pay its employees well, now it was being accused of underpaying its employees and overworking them at the same time. This has led to many issues in the firm which continually threaten to bring Wal-Mart to a negative end. These squabbles with employees with regard to their working conditions and salaries continue to haunt the firm even as its competitors seem to be doing very well as regards their human resource relations. While this issue of Wal-Mart’s employee relations continues to boil, Wal-Mart keeps losing its public image, much to the benefit of its competitors, who are now taking ground against Wal-Mart. Issue at hand The main question which must be answered in this kind of scenario should be: “How did a very successful firm like Wal-Mart come to such a point where its employees are constantly complaining of poor working conditions and of being overworked?” A closer look at Wal-Mart may indicate that the main issue with Wal-Mart is lack of flexibility and failure to change. According to Morgan (1989), flexibility is very important for an organization because it aids organizational learning and enables the change process. Knowledge management in an organization, however, depends on a lot on well-designed information systems (Morgan, 2006). As Bruce, Cheryl and Coskun (1994) say, information systems help an organization to be ahead of the competitors in the industry. Wal-Mart has, however, failed to use this opportunity to reform its workforce and has only concentrated on using technology for other uses such as streamlining its supply chain systems. According to Kharbanda (2002), organizations are supposed to continually change in order to be able to overcome the many issues which they face in the market. As such, well-designed information systems can and do help the organization in gaining the kind of information and knowledge which will be useful in the strategic decision-making process, thus helping it to deal with the issues it may be facing (Jamieson & Szeto, 1989). Wal-Mart has, however, seemingly ignored this and has failed to look at the issue of employee dissatisfaction. While it is very imminent that Wal-Mart needs organization change to be able to deal with the human resource it is facing today, it continues to ignore the issues. This lack of organizational change continues to be eminent in Wal-Mart, where the need for change is always disregarded, even in cases where it is very obvious that change is needed. One of the major instances, where Wal-Mart has been seen to fail to change, was in the 1980s during the Buy-American euphoria era. While Wal-Mart’s competitors refused to fall for this euphoria but rather continued to buy from across the international borders in order to access cheaper goods for their stores, Wal-Mart refused to use this and continued to buy stock from local manufacturers, which were more expensive. This adamant refusal to change regardless of the fact that this was causing the firm to lose its strategic edge in the market can be seen as a good example of how Wal-Mart fails to change itself. According to the organizational theory, an organizational is like an organism, which means that it has to continually change in order to be able to survive. Organisations have to keep changing their internal operational systems in order to be able to deal with the changing environment. This is done through continual learning both from the external environment and the internal environment. According to Baxter, Connolly, and Stansfield (2009), organizations are supposed to continually learn from the environment in order to know how to change their internal environment. This homeostatic mechanism is supposed to help the organization to change the environment so as they do not become obsolete. Like organisms, failure to change will lead to a situation where the organization cannot sustain itself in the environment. Brodner (2009) suggests that digital organizations are more likely to be in a situation where they will need to change in order to keep up with the continually changing environment. Wal-Mart seems to be unable to do this, and this has landed the firm in much trouble in the past as well as in the present. Organisations, like machines, need to reset their internal working mechanisms to address any drifts in the internal mechanisms. Just like a machine, an organization needs to be serviced and reset in order to cater for any deviation from its optimal settings, and this is another area where Wal-Mart has failed. In a mechanical system, engineers have to constantly check for any deviations and reset the machine to its original state. Organisations also need to be changed and fixed constantly in order to help them to remain on course. Managers in an organization act as the engineers and they must continually assess the organization in order to detect any areas where the organization may need to be fixed. Wal-Mart is, however, one organization which has failed in this regard, and its management continues to ignore the issues they face in the assumption that they will just go away. Instead of looking at the issues and identifying what needs to be changed, they continually ignore the need to change and prefer to remain in their safe cocoon. Machines, just like natural systems, are subject to entropy, and therefore, engineers keep checking the systems to adjust any negative variances brought about by entropy. Entropy is the natural tendency of things to deteriorate with time. If for instance, a lawn is not kept by trimming and mowing the grass and other plants as well as weeding off the unwanted plants, the lawn will eventually grow into a chaotic bush. Organisations are also affected by the same principle of entropy, which means that left to their own means, they get worse with time, ending in self-destruction. In this regard, Wal-Mart has failed to address this issue and things continue to get worse, and while this is happening, the competitors are closing in fast and are getting better and better. Sooner than later, Wal-Mart will be in the history books, and its competitors will feast on it like a lion feasts on a gazelle after ambushing it. Machines go through the same: if they are not serviced by changing some worn-out parts, they will get worse with time and eventually become dysfunctional. Not only do machines get worse with passing time, the rate at which they deteriorate gets faster with every moment they remain un-serviced. For instance, if a machine remains un-serviced for one week, the rate at which it deteriorates maybe 1 percent every day, while in the second week, it is likely to deteriorate at a faster rate of 1.5 percent every day. This kind of phenomena also applies to a firm like Wal-Mart because if it does not address its issues, these issues are likely to affect the firm at a much faster rate with every passing year. For the last few years, for instance, Wal-Mart has been having issues with its human resource management and has failed to address this issue. As time has passed, this issue has continued to become a bigger issue, and the firm now faces go-slows and demonstrations. Failing to address its problems in the past has made the problem to become bigger with time, making it harder to deal with it now that there is a big issue which affects the image of the firm. Just like machines, the bigger the machine, the more often it will require servicing and the more complicated the process of servicing the system will be. The same case applies to organizations where large organizations require complicated and well-organized change process in order to continually adjust the organization towards efficiency. For useful change to occur in an organization, the organization will need to be able to benefit from creative and useful innovative processes. Innovation, however, as Rodney (2000) says, cannot be achieved without knowledge management. Knowledge management for an organization is the way the organization handles the information, skills, experiences, and knowledge, which is acquired by the organization's human resource as they continue to work for the organization. This is in line with what Buckle (2003) says in her article about organizations. According to her, organizations are teleological structures with well-cut purposes which are supposed to be achieved by the human resource in the organization. It is, therefore, necessary to make sure that the human resource (employees) is well informed not only about the purpose and mission of the organization but also about the challenges the organization may be going through (Buckle, 2003). Wal-Mart, being a very large organization (the second largest organization in the world), requires serious change management processes which will help to address the issues it faces on a daily basis. Yet, regardless of this, the management at Wal-Mart seem to be relaxed and never looking at this issue. Regardless of the fact that the human resource is one of the most important resources that a firm can own, Wal-Mart adamantly refuses to manage its human resource in a way which is best for the firm. Wal-Mart and the Butterfly Effect The butterfly effect is seen as a cause-and-effect issue where something small can cause big issues much later. The main issue with the butterfly effect is the fact that due to the insignificance of the original action and the time variance between the original action and the end results, it is hard to connect the two and know the actual cause of the end results. Organisations are always affected in a very significant way by this issue. Small negative issues in the past, even many years back in history, can end up affecting the firm in a very big way much later in its life (Rodney, 2000). This is what seems to be another issue with Wal-Mart, where its decisions in the past seem to be catching up with the firm today. Any firm which fails to be vigilant about its today’s decisions will end up having to pay for the bad decisions later. The butterfly effect also means that a minor variances can lead to a huge differences in the outcome. For instance, while making decisions, managers usually deal with fuzzy issues, which means that they rarely ever face black-or-white situations. These small variances, which may seem insignificant in the beginning, can lead to huge differences in the end results. Wal-Mart seems to fail to understand this and to know that very small issues today, regardless of how insignificant they are, can lead to big differences in the future, thus affecting the well-being of the organization. Alternatives There are two ways in which Wal-Mart can address its problems. The first alternative is to use a consulting firm in order for the consulting firm to help it address the issues. There are a number of advantages to using a consulting firm. The first is the fact that the employees are more likely to trust and be willing to work with an outsider as opposed to the current managers in Wal-Mart. This is because the employees have already lost faith in the internal Wal-Mart management and they do not trust them any longer. In this regard, the employees can only look at the management with a lot of suspicions. This is why the use of an outsider will be of significance. The second advantage is the fact that the consulting firm will function as a mediator who will seek to maximise the good of both sides. This is because the outsider will not have any vested interests in the process and will only seek to develop a solution which benefits both sides. Disadvantages However, this alternative has a number of disadvantages, the first one being that there will be an extra cost as this consulting firm will be hired to be doing what the internal management should have been doing in the first place. Secondly, the consulting firm does not understand the employees as well as the managers do, and this can be an issue. The second alternative is creating a task force within the internal management to help in dealing with this issue. Of course, there will be issues with this alternative, especially because of the fact that the employees may not readily trust the same internal management team, which has been giving their grievances a deaf ear. The other problem is that the internal team may not be competent enough or even willing enough to be able to handle this issue with competency and effectiveness. The advantage, on the other hand, would be the fact that the internal management understands the employees at a personal level, and this can be a very good platform to start solving the problems. Given the above two alternatives and their advantages as well as the disadvantages, it is the first alternative which seems more viable and more likely to produce positive results. While it will cost the firm, it is going to be the best in terms of providing a solution which is well balanced and which will make the employees feel that their needs have not been overlooked or looked down upon. Wal-Mart will, therefore, have to consider hiring an external consulting firm to help in settling this issue once and for good. Recommendations Wal-Mart should start arrangements to hire a consulting firm which is well versed with labor issues in order to help it look for a solution which will bring its issues with its employees to a halt. The internal management will be tasked to procure these services by analyzing the available consulting services in order to choose at the best consulting services. Since the issue at hand is a human resource issue, Wal-Mart will have to look for a consulting firm which is experienced or which specializes in human resource and labor issues. However, the employees through their representatives should also be involved in the process of hiring the consulting firm so that they do not feel that they have been left out of the process. This will be important since the issue at hand is one that affects the employees, and therefore, the need to involve them in the process of solving the issue. According to Mendy (2012), the success of organizational change starts with the managers', as well as the employees', understanding the need for change. This is why it is necessary for managers to be able to inform their employees of the issues the firm is facing. Failing to involve the employees in the process of developing the solution will only lead to them rejecting whatever solution will be provided to them and, it is, therefore, necessary to make sure that they are involved so that they will own the solution at the end of the process. References Baxter, J.G., Connolly, T.M., & Stansfield, M. (2009). How can organizations learn: an information systems development perspective. Learn Inq, 3, 25–46. Brodner, P. (2009). The misery of digital organizations and the semiotic nature of IT. AI & Soc.,23, 331–351. Bruce, K.C., Cheryl, F., & Coskun, S.A. (1994). Developing a balanced information system: Establishing strategic superiority for service organizations. The Journal of Services Marketing, 8(1), 4. Buckle, P. (2003). Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Uncovering system teleology: a case for reading unconscious patterns of purposive intent in organizations. Systems Research and Behavioral Science, 20(5), 435. Jamieson, R., & Szeto, R. (1989). Impact of Knowledge-Based Information Systems on Organisations. The School of information Systems, University of New South Wales, 147-159. Kharbanda, V. (2002). Learning Organisations: The Process of Innovation and Technological Change. AI & Soc, 16, 89–99. Mendy, J. (2012). Employees' witnessed presence in changing organizations. AI & Soc, 27, 149–156. Morgan, M. (1989). Creative Organization Theory: A Resourcebook. Thousand Oaks, CA: SAGE Publications. Morgan, M. (2006). Images of Organization. Thousand Oaks, CA: SAGE Publications. Rodney, M. (2000). Knowledge management as a catalyst for innovation within organizations: a qualitative study. Knowledge and Process Management, 7(4), 233. Read More