Control Mechanisms of Wal mart

Topics: Management, Value, Control system Pages: 5 (1512 words) Published: June 27, 2010
Control Mechanisms of Wal-Mart � PAGE * MERGEFORMAT �3�

Control Mechanisms of Wal-Mart

Without the effectiveness of control, the successes of most companies would be easily faltered. Wal-Mart, being one of the World's largest retail chains, has established itself as a global leader, and not without having a defined plan of action. Through varying efforts and countless control regulation, this retail giant has secured itself within the industry. Throughout this paper, an address will be made to the control mechanisms that Wal-Mart uses within its normal business practices. In addition, a reflection will be made on how the control functions are utilized and what measures are taken to monitor such measures within management.

Control mechanisms are the functions which help maintain the processes of companies to reach their goals. Wal-Mart is a large corporation whose goals include making the products that people need available, at lower prices. The controls which are implemented at Wal-Mart are various but are strictly enforced. Wal-Mart typically uses market control; placing a monetary value upon its products. Wal-Mart also uses clan control by receiving input from its employees to achieve better promotions for the public. These controls are important to prosper efficiently in the business world; they also increase customer and employee satisfaction.

Wal-Mart's success is motivated by control mechanisms that are regulated and constantly evaluated. Four examples of these control mechanisms at Wal-Mart are scale in purchasing, a cost advantage, a strong position in the value network, and minimal employee benefits. Each of these four mechanisms has put Wal-Mart in the forefront of retail giants. Scale in purchasing concerns the large volume of items bought. Because of this large volume Wal-Mart is able to purchase at a lower price and pass that savings on to the customer. That brings one to the second function mechanism, cost advantage. Because Wal-Mart has lower prices there is an advantage that customers gain by shopping there. This leads to a strong position in the value network.

The fourth mechanism that Wal-Mart uses has been widely speculated upon. According to, even though Wal-Mart has more than 680,000 associates in 14 countries outside the continental U.S. a great percentage of employees within the U.S. are uninsured and more employees are relying on state aid. Wal-Mart said 43,000 of its workers receive health coverage through a state assistance program. So, not only does Wal-Mart fail to insure 644,000 of its workers, a whopping 182,000 are left completely uninsured while another 43,000 must rely on Medicaid and other state run programs. (Media team/, 2010) This leads to a great surplus in funding for the Wal-Mart buying processes and gives them a great advantage in supplying its customers with lower pricing.

Comparison and Contrast of Control Mechanisms

Of the control mechanism to have been defined, one might come to a conclusion that each mechanism has its benefit to this large corporation. As control functions are mechanisms that a company chooses to set in place in order to maintain progression within its industry, Wal-Mart does in fact appear to have it all figured out. To the consumer, this retain giant is the go-to for a purposeful shopping experience and a reasonable savings. The company does what it says it will and the strong position in the value network appears to be secure with each passing quarters successes. The downfall; however, does appear to be evident with the lack of needed resources made available t the Wal-Mart employee. Considering the successful positioning that Wal-Mart has been in for many years; one may choose to consider the idea that savings, on a small scale, isn't thought of in the eyes of everyone; yet, the savings is taken from the employee for the consumers benefit. Of the controls that Wal-Mart has chosen to make normal...

References: Bateman, T. S., & Snell, S. A. (2009). _Management: Leading & Collaborating in a Competitive World_ (8th Ed.). New York, NY: McGraw-Hill.
Johnson, B.C. (2002). Retail: The Wal-Mart Effect. _McKinsey Quarterly,_ (1), 40-43. Retrieved on March 09, 2010, from EBSCOhost database.
Media team/ (2010, February 17). _Walmartwatch.com_. Retrieved March 12, 2010, from
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