Case study of strategic human resource management in Walmart stores
Part 1: the analysis of corporate strategy and HR strategy at Wal-Mart. Part 2: The analysis of HR policies at Walmart and its integration with Corporate Strategy. Part 3: the role of the HR manager in this company?
Part 4: some advices to improve the employment practices at Walmart. Conclusion
Michael E. Porter (1980) in his famous book said there are three basic competitive strategies for a company, which are overall cost leadership; differentiation and focus strategy. Companies use these competitive strategies to achieve competitive advantage. In this case, Walmart Company is obviously taking the cost leadership strategy, that is to say, it aims to become the low-cost leader in the retail industry. Walmart maintains its competitive advantage through its satellite-based distribution system, and by keeping store location costs to a minimum by placing stores on low-cost land outside small to medium-sized towns, no matter in the US or in its abroad affiliations. Part 1: the analysis of corporate strategy and HR strategy at Wal-Mart. From this case material we could also see that Walmart purchased massive quantities of items from its suppliers to form scale economy, and with the efficient stock control system helping make its operating costs lower than those of its competitors. It also imported many goods from China, “the world factory” for its low cost. So in a word the company-level strategy of Walmart is low cost and low cost, with little differentiation strategy. Managers engage in three levels of strategic planning (Gary Dessler, 2005): the corporate-level strategy; the business-level strategy and the function-level strategy. The functional strategy should serve the overall company strategy so the corporate strategy could be implemented more effectively and efficiently. As for Walmart, its corporate-level strategy and business-level strategy, as we analyzed above, is the low cost leadership. Then we’ll focus on its functional strategy, especially its HR strategy. Besides the above factors, Walmart builds its low cost leader on employment policies that help it to achieve extraordinarily low employment costs. Through low-cost HR activities, Walmart tried to maintain its predominate competitive advantage. Part 2: The analysis of HR policies at Walmart and its integration with Corporate Strategy. The basic premise that underlying SHRM is that organizations adopting a particular strategy require HR practices that are different from those required by organizations adopting alternative strategies (Jackson&Schuler, 1995). Generally, there are three SHRM theoretical models in the study of this discipline: the universalistic best practices, the contingency perspective of “best fit” and the resource-based configuration perspective. Here I would not deliberate on all these three models to examine the HR practices at Walmart, but just choose the contingency perspective of “best fit”. With this view, the individual HR practices will be selected based on the contingency of the specific context of a company. Like the Walmart has different corporate strategy with those retailers with differentiation strategy, which actually cultivates the primary contingency factor in the SHRM literature. What’s more, we should be reminded that the individual HR practices will interact with firm strategy to result in organizational performance, and just for this interaction effects make the “universal best practices” may not apply so well in a specific company. In the above part we have put great emphasis in identifying and analyzing the primary contingency factor of Walmart’s corporate strategy, so in the following part we’ll examine the “fitness” of HR practices in Walmart with this theoretical model, which is obviously also the integration process of HR practices with the contingency variables to some extent. As there are the HR policies...
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