Organization Analysis - Wal-Mart - Essay Example

Organization Analysis: Wal-Mart Organization Analysis: Wal-Mart The background of the company The organization initiated itsactivities in the year 1962 by opening its first shop at Arkansas. Years later, the organization developed into Wal-Mart stores; opening the first supply center and home administration center at Bentonville. Furthermore, the organization launched the first super center in the year 1988 whilst initiating the first global unit in Mexico in the year 1991 (Lichtenstein, 2006). By the closure of the 20th century, the company had realized prominent international recognition and won numerous business awards. For example, the organization was the “Retailer of the Century,” held a strategic position in the list of the best companies in America, and appeared in the Financial Times’ list of the world most respected firms (Diermeier, 2011). Presently, Wal-Mart is a prominent business providing diverse shopping experience to the global community. The organization is currently structured into various categories with each branch offering specialized services. These districts include the Wal-Mart stores, Neighbor markets, Wal-Mart pharmacy, SAM’s Clubs, Mart Vacation among others (Spotts, 2005). The organization provides thousands of supplies through these divisions. Furthermore, the organization offers most of these products under one-room providing consumers’ with comprehensive stores from which they can fulfill all their needs (Diermeier, 2011). For example, the Wal-Mart stores have electronics, groceries, automotive, healthcare products and clothes among others. Globally, the entity operates strong units in Canada, Argentina, Costa Rica, the UK, Japan, China and many other parts of the world (Spotts, 2005). The company’s success is attributable to its strategic organization and innovative management capable of facing competition pressures accordingly. This explains the significance of examining the company’s organization and management structure. Survey Results (From the attachment) Name: Contact Details (Email and Tel): Position: Company: Wal-Mart For each account, kindly circle the number that most closely represents the extent to which this principle currently describes your company. Not at all To a weak extent To a moderate extent To a large extent To a very large extent Principle 1: Alignment Our business has aligned employee behaviors with stated company values and direction. 1 2 3 4 5 Principle 2: Distributed Leadership In our business, persons and work teams are accorded, and agree to the liability for operational decision making and performance enhancement. 1 2 3 4 5 Principle 3: Integration of Effort Our business is not a functional/ hierarchical organization but a value creation/process focused organization. 1 2 3 4 5 Principle 4: ‘Out-Front’ Our business takes a lead in determining industry standards and practices. 1 2 3 4 5 Principle 5: ‘Up-Front’ We apply high standards of integrity and openness in everything we do. 1 2 3 4 5 Principle 6: Resourcing the Medium Term Our business is able to balance short-term and medium term issues and requirements. 1 2 3 4 5 Principle 7: Time Based Time is a critical organizational value in our business. 1 2 3 4 5 Principle 8: Bias for Action Our business is good at implementing ideas and strategies. 1 2 3 4 5 Principle 9: Learning Focus Everyone in our business is involved in a learning/development program. 1 2 3 4 5 Principle 10: Discipline We invest in policies, procedures and standards and apply a strong systems perspective in our business. 1 2 3 4 5 Principle 11: Measurement/Reporting and Publication Our business measures and reports to our employees, the financial and nonfinancial performance information needed to excel. 1 2 3 4 5 Principle 12: Customer Value In our business, all employees strive to enhance customer value creation. 1 2 3 4 5 Principle 13: Capabilities Creation Business and organizational capabilities are defined as priority areas for development and investment. 1 2 3 4 5 Principle 14: Micro to Macro Our employees know how their individual efforts contribute to business success. 1 2 3 4 5 Company’s strengths The organization has a reputable brand that is globally recognized allowing it to outshine competitors in the field. Customers associate the Wal-Mart’s brand with quality and standardized products. The company’s brand is distinct; furthermore, Wal-mart has established a group of loyal customers. Spotts (2005) asserts that consumers usually respond to less costly products to sustain their daily needs especially in current time of economic hardships. Since the company makes purchases in large quantities, it obtains huge discounts that it can pass to its customers. This enables it offer products at a reduced cost. Furthermore, the organization manufactures its own products allowing it to sell them at subsidized rates (Diermeier, 2011). Wal-Mart’s huge capital and customer friendly operations promote the marketing capacity. The strategic pricing is the prominent marketing strength that offers the company a competitive advantage. The organization has a policy that governs the procedures for determining prices for the products. This restricts management from hedging prices. Furthermore, the company conducts a Rollback promotion strategy that target customers. This system lowers the prices of the already subsidized products making the company out-price their competitors (Lichtenstein, 2006). The company understands the concept of customer value as highlighted in their customer-oriented scheme. The organization has one of the best contentment guaranteed models that enhances customer goodwill (Vance & Scott, 2004). The organization allows customers to return the purchased products that do not please them and claim a refund. Furthermore, the organization enhances customers’ goodwill by observing the “Ten Foot Rule” developed by it. This rule guides that if a customer is within proximity of ten feet of the employee; the employees must greet him or her and seek to assist. Additionally, the organization insists that employees should seek to know customers by their first name (Spotts, 2005). Diversification of the products is an explicit strength of the company. The organization offers an array of services that is categorized into ten divisions. The categorization of services into various branches provides Wal-Mart with an opportunity to offer several products to the customers. This approach provides the organization with a diverse and broad market. Consequently, the organization spreads its risks effectively promoting the company’s stability especially during crisis. Lastly, the organization has excellent IT infrastructures that provide it with the capability of managing services around the world while offering management the chance to formulate quick and sustainable decisions (Diermeier, 2011). Weaknesses Although the organization offers an array of services, it does not specialize in particular products and lacks essential knowledge to manage these goods. Furthermore, the size of the organization is a weakness since managing the huge capital, inventories and employees are challenging. The organization also pressures its suppliers constantly distorting prices and demanding immediate supplies when need arises. Furthermore, customers question the quality of the organization’s products due to their low prices (Lichtenstein, 2006). The company has management and expansion weaknesses. The organization lacks a clear and comprehensible mission statement. Although the organization has strong values, it fails to describe such values to employees or customers within Wal-Mart. Moreover, the company has employed few minority employees because only a few female employees occupy top management positions (Vance & Scott, 2004). The company also does not uphold the concept of unions. This has exposed the company to grave criticisms. Expansion problem is promoted by the position assumed by various towns that have considered the idea of blocking the organization from venturing their market due to the impact of the company’s activities on small-scale businesses (Ferrell, Fraedrich, & Ferrell, 2010). Analysis and discussion The survey indicates that Wal-Mart has strategic strengths and opportunities that it can utilize to promote its activities. The company presents a classical example of business procedures and concepts that any organization should embrace to survive in the contemporary business environment (Spotts, 2005). It is clear that approaches that enhance effective management, business growth and values employees and customers’ interests enhance success. This allows Wal-Mart to embrace and sustain the concepts of sustainability and effective corporate social responsibility (CSR). The company has earned its reputation based on the high discipline levels as apparent in its ability to maintain high standards during operations (Meeks & Chen, 2011). Wal-Mart’s procedures and activities indicate that the organization focuses on learning. It offers several training sessions to its employees that cover areas such as diversity, leadership skills, fair employment opportunities and prevention of sexual harassment (Soderquis, 2005). Additionally, the organization is committed to providing resources to employees that would help them realize their career objectives. The organization’s training tools include mentoring programs, classroom courses, distance learning, skills assessment and development of a competitive environment (Turner, 2010). These learning and employees’ empowerment programs align employees’ habits with the organization’s values. Furthermore, the organization seeks feedbacks from employees regarding their views on the work experience. The company’s ability to identify major values indicates its commitment to integrated management effort. These concepts also create an environment capable of becoming micro and macro ventures. Consequently, this makes individuals identify their roles with the intention of realizing the company’s objectives (Ferrell, Fraedrich, & Ferrell, 2010). Customer value and satisfaction is an imperative concept in Warm-Mart. This is apparent in the company’s commitment to the customers’ goodwill and provision of products that are sensitive to the immediate interests of its customers. Furthermore, the organization values local personnel whom they hire to address diversity and cultural needs. The company’s workforce comprise of an assorted group of individuals of different age groups, race and background (Soderquis, 2005). Wal-Mart values capability progression as evident in its strategic procedures. For example, the organization utilizes its reputable financial position to attract and maintain employees providing them with stock ownership and dividend benefits. The company’s full time employees have an opportunity of accessing these programs since the organization allow them to obtain stock shares at reduced prices (Meeks & Chen, 2011). The organization also uses its huge capital in producing own brands to enable them offer products at reduced costs. Furthermore, the organization values the concept of Up-Front management. Accordingly, the company has a comprehensive corporate structure that is commanded by three prime values which include respect for the persons, service to their clients and search for excellence. The company’s management and operational procedures seek to promote these values (Lichtenstein, 2006). Wal-Mart’s effort to Out-Front management is highlighted by the company’s ideal CSR procedures that value customer’s welfare and environmental concerns. The company has effective community based initiatives. For example, the company offers scholarships to several high schools seniors; furthermore, it supports health care programs and various charity programs (Spotts, 2005). Additionally, the organization educates the society about the essence of recycling and other environmental subjects with the aid of a “Green Coordinator.” The Green Coordinator is primarily a trained employee who monitors efforts of developing an environmentally responsible store. The company has developed Environmental Demonstration centers in Lawrence, Moore and California. These centers act as case studies for examining the eco-friendly construction materials and experimental procedures for saving energy and water (Turner, 2010). The management of Wal-Mart believes that sustainability and internationalization are influential factors while conducting business in the 21st century. The company’s product pricing procedures highlight the organization’s effort to achieve sustainability (Soderquis, 2005). The organization observes that economic challenges and shortages in resource demands sustainable business operations. The organization prioritizes and invests in models capable of lowering production, operation and service delivery costs (Meeks & Chen, 2011). Wal-Mart also purchases goods like vegetables and fruits from local producers to reduce transportation costs. Furthermore, the organization has taken advantage of technological developments in establishing sustainable operational procedures. This evident in the company’s well-established IT infrastructure that has enhanced the organization’s activities. For example, the company has adopted an online service model that is very effective. Furthermore, the approach of emphasizing on the idea of recycling materials indicates the company’s commitment to sustainability (Turner, 2010). The company’s dedication to internationalization is indisputable as apparent in its quest to conquer the oversee market. Wal-Mart has prioritized the need to expand its market by venturing into the global market consequently attracting considerable benefits to the company. The company has also expanded its activities through joint ventures and amalgamation strategies. Ferrell, Fraedrich & Ferrell (2010) note that Wal-Mart’s strategies and skills when venturing the global market have successfully challenged competitors. Recommendations The attractive state of the Wal-Mart indicates that the company has the potential of realizing further market command; however, it should address its weaknesses to promote performance. The report proposes that the organization should adapt several recommendations. First, it should offer specialized services allowing it to concentrate on lines that demand special attention. It is equally important for the organization to formulate a clear mission statement and devise a strategic model for managing its resources, especially in the inventory section. The organization should utilize tactical processes to boost relations, especially with towns, that are blocking the organization’s expansion plans. The company should re-examine its workforce structure to ensure that its employment patterns are sensitive to women and minorities. This will ensure that the organization management team is not dominated by a single gender because this would affect the company’s profile. Furthermore, the organization should re-evaluate its project implementation procedures to ensure that they are time based and sensitive. References Diermeier, D. (2011). Case study: Walmart. FT.Com, n/a. Retrieved from http://search.proquest.com/docview/858311761?accountid=45049 Ferrell, O. C., Fraedrich, J., & Ferrell, L. (2010). Business ethics: Ethical Decision-making and cases: 2009 update. Mason, OH: Southwestern Cengage Learning. Lichtenstein, N., (2006). Wal-Mart: The face of twenty-first-century capitalism. New York, NY: New Press. Meeks, M., & Chen, R. (2011). Can Wal-Mart integrate values with value? From sustainability to sustainable business. Journal of Sustainable Development, 4(5), 62-66. Retrieved from http://search.proquest.com/docview/901142195?accountid=45049 Spotts, G. (2005). Wal-mart: The high cost of low price. New York, N.Y: Disinformation. Soderquis, D. (2005). The Wal Mart way: The inside story of the success of the worlds largest company. Ney York, NY: Nashville. Turner, C. (2010). How Wal-Mart is saving the world. Canadian Business, 83, 44-48. Retrieved from http://search.proquest.com/docview/817183445?accountid=45049 Vance, S. S., & Scott, R. V. (2004). Wal-Mart: A history of Sam Waltons retail phenomenon. New York, NY: Twayne. Read More