Control Mechanisms of Wal-Mart

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Control Mechanisms of Wal-Mart
Teresa Sexton
University of Phoenix
Aug 25, 2008

Control Mechanisms of Wal-Mart
Control mechanisms are used by organizations to help regulate processes which add to company-wide goals. Wal-Mart is a huge industry functioning to meet the needs of its customers, employees and suppliers by using controls; controls consist of market control, clan control, manager audits, and performance standards. Each control is important to prosper efficiently in the business world; in addition, increasing customer, employee and supplier assurance. The efficiency of each control impacts the four functions of management; organizing, planning, controlling and leading. What are the positive and negative aspects of each control? Wal-Mart’s success is motivated by control mechanisms that are regulated and constantly evaluated. Market-Control is the ability of buyers and sellers to exert influence over a market for goods or services, according to Encarta® World English Dictionary [North American Edition] © (P)2007 Microsoft Corporation. “During the past 20-plus years, Wal-Mart has been allowed to expand its operations throughout America and many other nations by using a business model designed to drive down prices at all levels in the business chain. Wal-Mart now has such economic power that few businesses can afford not to succumb to their price demands. Wal-Mart not only dictates the price, it also dictates the terms, conditions, source and in some cases the material used in the products it purchases. It has been the leading exponent of forcing American firms to move production of products to a Communist “slave labor” state – China. It is using its economic power to orchestrate the destruction of American industry. Its economic power is used to destroy local independent merchants in virtually every community in which it operates. In conjunction with this power, Wal-Mart provides substandard pay, medical and retirement benefits to its hundreds of thousands of employees while denying them the option of obtaining union representation” (Wal-Mart, Bush ruining economy By Etson Hougland Posted on Mon, Jul 31, 2006,, Retrieved Aug 20, 2008). On the other hand, prices for oil and many foods are at record highs, but Wal-Mart can pass some inflation on to shoppers without losing its low-price leadership. And it is in the right line of business in hard times. Its biggest strength is grocery sales, which are not slowing down, and are unlikely to, since they are essential purchases (“Wal-Mart, Always low prices,” Feb 21st 2008, From The Economist print edition,, Retrieved Aug 20, 2008). Clan Control is based on the idea that employees may share the values, expectations, and goals of the organization and act in accordance with them (Thomas S. Bateman, Scott A. Snell, 2007, Chapter 16, pg 14). “The Walton Clan – widow and offspring of Sam Walton, control about 39% of Wal-Mart stock, worth some $90 billion, which makes them by far the richest family in the U.S. Because they hold such a huge stake in Wal-Mart, the Waltons have a large, if quiet, influence on our economy and society. They have a say in more than a million jobs in this country. (What if the family, for instance, urged the company to give up the fight with unions in California and pull out of the Golden State?) The Waltons' decisions could also affect hundreds of billions of dollars in investors' stock portfolios and retirement accounts. In the future, their impact could be much greater. The Waltons' philanthropy is a giant just beginning to stir. What the family does with its vast wealth could leave a lasting mark on the nation” (Andy Serwer / Fortune v.150, n.10, 15nov04, “The Waltons: Inside America's Richest Family”, Retrieved Aug 20 2008). Manager Audits is a method of...
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