Organizational Structure

Topics: Wal-Mart, McGraw-Hill, Sam Walton Pages: 5 (1489 words) Published: November 8, 2010
Running head: Organizational Structure

Organizational Structure Paper
Team C
University of Phoenix
MGT 330 – Theory, Practices & Application
Instructor: Fred Schaum
July 13, 2010

Wal-Mart is one of the largest corporations around the globe. Wal-Mart serves customers and members more than 200 million times per week at more than 8,446 retail units under 55 different banners in 15 countries. With fiscal year 2010 sales of $405 billion, Wal-Mart employs more than 2.1 million associates worldwide “A leader in sustainability, corporate philanthropy and employment opportunity, Wal-Mart ranked first among retailers in Fortune Magazine’s 2010 Most Admired Companies survey.” In order for one to understand what type of organization Wal-Mart’s size is one of great proportion and requires the organizational structure to be sound as well as effective. In the next few paragraphs the Wal-Mart organization will be examined and it will be determined what type of structure Wal-Mart possesses and how it can become more agile. Horizontal/ Divisional Description of Wal-Mart

Altogether, there are about eight organizational structure types. Each company has to find a way of putting these “pieces of the puzzle” into one well thought-out outline to represent the necessary relationships. In this case, we’ll be looking at the divisional structure. According to the text, “as organizations grow and become increasingly diversified, they find that functional departments have difficulty managing a wide variety of products, customers, and geographic regions. In this case, organizations may restructure to group all functions into a single division and duplicate each of the functions across all the divisions (Bateman and Snell 8th edition, 2009).” Wal-Mart has been sectioned into a three product divisional structure. The three include Wal-Mart Stores (located here in the United States), Sam's Club (Located here in the United States), and some global stores. The global section is responsible for about 20% of the company’s overall business income. In addition, the global section is also responsible for several different types of restaurants and stores. Wal-Mart and Sam's Club can be found in at least 13 different countries including Puerto Rico. Wal-Mart was smart to use the divisional plans as each division is open to center their attention on specific goals like customer services and product knowledge. Wal-Mart is much better off with this structure and being able to keep each section narrowed down. The thought process behind the company’s structural decision goes along with the question, “How does one eat and entire elephant?...One bite at a time.” The company (at this point) is entirely too large to manage it any other way. In fact, trying to manage such an establishment differently could prove disastrous. Wal-Mart’s Vertical Structure Examined

The vertical structure in the Wal-Mart Corporation starts with the Board of Directors who executes three primary duties in the decision process that can affect the organization. According to Bateman and Snell (2009), the first duty is “selecting, assessing, rewarding, and perhaps replacing the CEO,” the second is “determining the firm’s strategic direction and reviewing financial performance,” and the third is “ensuring ethical, socially responsible, and legal conduct. This is the level of authority where decisions are made and people are told what they will do. The vertical structure of Wal-Mart has the Board of Directors, Chief Executive Officers, Chief Financial Officers, Chief Operating Officers, Presidents, Vice-Presidents, and other executives to maintain the domestic and international business affairs including the store managers must report to the main corporation. They make the decisions of what will is required to accomplish the goals of the organization and command the people in what they need to do. Wal-Mart’s Horizontal Structure Examined

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