Wal-Mart has been one of the world most successful stories; the small store in Alaska has been extended to be the world largest retail organization. Behind this success; there have been certain organization behaviors that have shaped the Wal-Mart stores.
In this essay, we try to explore those orgnizationuinal behavior factors that have created the Wal-Mart culture; keeping into considerations the values of ethics and modern business behavior, we try to explore Wal-Mart behaviors in the areas of organization culture, change management, leadership..etc …
Wal-Mart eager for a “low cost strategy” that serves its sole focus on customers buying cheap items with good quality and service under the umbrella of “Save Money. Live better” logo has defiantly played a main role in designing this organization. To achieve this low-cost strategy Wal-Mart has created several ideas on the retail & specialty sides. On the retail side “Wal-Mart Discount Stores, Supercenters, Sam’s Club, International, Neighborhood Markets”. While on the specialty side (Wal-Mart Vacations, Pharmacy, Optical, Used Fixture Auctions), each subsidiary has its own line of services. Those divisions aim to target special customers which defiantly gives Wal-Mart the flavor of functional design organization
Cut the organizational chart and paste it here
This functional organizational structure is formed to continuously drive costs lower, which contributes to the emergence of a low-cost culture—a culture in which all associates constantly try to find ways to reduce the costs incurred to complete their work. Specializing in associates work allows them to increase their efficiency, reducing the costs as a result.
In addition, Wal-Mart has simple reporting relationships, few layers in the decision-making and authority structure, a centralized corporate staff, and a strong focus on process improvements. All of these characteristics shape the cost leadership form of the functional structure.
■ Success attributed to the way Wal-Mart coordinates and manages its activities
■ Efficiency of stores critical to success
■ To control store operations, Wal-Mart has created a vertical operating structure
■ Based on clear definition of authority and responsibility
■ Decision making is centralized through weekend extensive meetings
■ Each store manager has the same book of rules and procedures and accounting standards
But some elements of organic
■ Store managers are still given some flexibility – allows store managers to make decisions on their own
■ Higher levels of management also rely on mutual adjustment when they have to decide on products or how to improve operations
■ Combination of mechanistic and organic structures
The mixture of those features has led Wal-Mart to be a leader in the market whom have passed other competitors such as K-mart. Wal-Mart has proven to be centralized through the Saturday meeting with almost all the senior managers at the headquarter as well as other weekly meeting happened within a local store or division. On the other hand store managers have been giving some areas of freedom. It’s true that these divisions have helped in managing the Wal-Mart stores that have been extending and changing from time to time. So how did Wal-mart Guide his change movement?
When one person moves from job to job or from town to town he/she experience difficulties and needs to take the necessary steps for a successful change. Wal-Mart had made several important changes through its history and have faced lots of pressures to do changes, starting from expending its business to adapting IT Technology for the inventory program as well as the creation of its own distribution centers in this report we try to go through the pressures that led to Wal-Marts change.