Abstract
The paper opens by discussing the introduction and background of the Walmart company. In this section, there is mentioning of the origin of the company and the founder. Besides, there is capturing details of the nature of activities carried out by this company. Furthermore, it is within the introduction where there is a discussion of growth process f the company from the initial point up to date. The second part discusses organization strategy where there is a discussion of the techniques used by the company to achieve a competitive advantage. Besides, there is a discussion of some changes in policy to improve customer services. The third part discusses organization design and its effectiveness. It is the section which explains how some internal activities are done and how they influence overall working within the organization. The fourth part talks about organization culture, where some values are discussed. These are positive values which make the organization to be among the best retail company. The last part is the conclusion and recommendation. The conclusion part summarizes the main points within the discussion while recommendation gives the views of how some issues in Walmart company needs to be improved.
Introduction and Background of Walmart
The Walmart Inc., which was formerly known as Mart Stores, Inc. is among the multinational American retail company. It has chains of operations like discount department stores, the groceries and hypermarkets and its headquarters are in Bentonville, Arkansas. Walmart s it is known today, it evolved from goals of Sam Walton of great value and excellent customer service. Sam Walton believed in leadership through service, which is the founding principle of Walmart Inc. A lot of history of Walmart Inc is drawn from the story of Sam Walton himself. Therefore most of its operations are rooted in principles of Mr Sam. Walmart Inc. was founded in 1962, whereby the founder Sam Walton focused on its growth in rural areas. The principle for taking it to the rural regions was to avoid direct competition with other retailing giants such as Kmart and Sears. As the company grew, it developed into new retail formats which included Sam’s Club discount warehouses in the year 1983. Besides, in the year 1988, it developed into another retail form known as Wal – Mart Supercenters. Within a decade after its opening, processes such as a combination of grocery and merchandise supermarkets made Walmart and become among the greatest grocers in the U.S. The principles such as customer attention, cost controls and distribution network contributed a lot towards this growth. Other supporting activities which contributed to the massive growth of Walmart includes direct mail advertising, low cost inputs and regional warehousing. After becoming largest retailer in 1990, the company decided to go international where its branches were opened in Mexico, Canada, Germany, China and U.K. As the company continued to grow, it began to acquire e-commerce businesses in the 2010 and its stores expanded. As the at 31st Jan 2020, Walmart has already attained approximately 11, 505.0 stores in 27 countries operating with different business names.
Walmart’s Organization strategy
Walmart company has put on strategies to ensure that the operations are per principals of leadership and service. One of the strategy in Walmart Inc is that of being the low-cost leader. It is the strategy which means that the pattern of purpose together with policies which defines this organization is relative to its environment. The concept of being a low-cost leader runs throughout the entire organization, which is a unique way, dictates the way the company utilizes the resources. A perfect example is that the company devotes some substantial portion of their resources to create efficiencies in operations. The efficiencies are captured in the field of logistics, distribution network and information technology. However, there are some store layouts which are standardized and easy, whereby the company is not creating much value on them. Therefore, they are dedicating fewer resources there to make those stores aesthetic. As it is captured in the mission of the company, organization strategies are aiding towards deciding on how to invest the resources (Gupta, 2018). That is the reason why the company is focusing a lot on logistics, training and transportation. It is a fact that Walmart is a huge Company that needs logistics of the division of labour. There is a need for coming up with effective logistics that will cater to activities such as training, transportation and marketing. Since all these activities need a company’s resources, the better strategy is to divide these strategies according to the value given back to each activity
As has been discussed, Walmart business strategy is based on the philosophy of the company known as ‘everyday low prices. Generally, Walmart is continually pursuing cost leadership corporate strategy through the help of economies of scale derived. There is an aspect of capturing efficient and effective utilization of online sales platforms. It is a strategy which has contributed to attaining about 75.0% of the sales of Walmart from the non – store inventory (Schwend et al., 2017). Besides, there are steady improvements of product varieties, the prices and access which are the foundation of the business strategy. In other words, Walmart Inc. strives to offer a broad selection of the products for the affordable price possible. Also, the company is giving clients a chance to choose the most reliable and convenient channel to use to facilitate the process of purchasing. Cost leadership of the Walmart company indeed determines its competitive advantage, and therefore it is an essential factor. That is the rationale why strategic level management has consistently aimed in associating competitive advantage of Walmart with assortments of products, the accessibility and the price factor. Since the appointment of Doug McMillion as CEO of Walmart in Feb 2014, there are essential changes in organization strategy. The organization strategy as taken another three dimensions which includes the following;
- Increasing the focus on serving customers – In the year 2105, Walmart declared an investment of USD 1 billion in the U.S. hourly associates. The rationale behind this declaration was to increase raise the wages and to conduct more training which will increase chances to build a robust career in Walmart.
- Improving the groceries – As a result of the increased level of health concerns of the consumers, Walmart Inc. has adopted the strategy of increasing fresh range produce and organic options. It is kind of change which has been experienced in the United States market, and it is currently embedded in marketing distribution and communication in other connected areas.
- Enhancement Flexibility of shopping experience – It has been discovered that Walmart Inc is working on the strategy of integrating the physical stores with the digital or e-commerce business. For the courtesy of recent changes, clients can collect their orders placed through online procedures from the stores. Besides, the clients are getting the text for reminding them about the pharmacy and nutrition products.
Usually, the competitive advantage of Walmart is sustained in the international market due to the organization strategy of low leadership cost the low prices. It is a philosophy which defines Walmart technique of “operating for less” and “buy for less” as the method of avoiding competition. The company can replicate that strategy in their other markets to sustain its cost advantage
Walmart’s Organizational design and Its effectiveness.
Walmart Inc has the hierarchical or classified functional organizational design. The design has two distinct features which are hierarchy definition and unction – based definition. To start with hierarchy definition design, it pertains of the vertical lines of authority and command throughout the organization structure. For example, exemption of the CEO, every other employee has the direct authority or a direct superior. The mandates and directives originating from the administration of the company are put into actions through middle managers (Schwend et al., 2017). These managers then file employees into Walmart stores to execute the given directives. On the other hand, the strategy of the function – based on company structure focuses on employees fulfilling particular functions. An example is that Walmart has integrated the department of function of human resource department management.
Furthermore, the company has integrated the department for the activities involving information technology. It is essential which should be incorporated in business operations for the smooth running of the company on matter pertains flexibility and communication. Besides, the company has a robust department which focuses on the activities of marketing. The marketing forms an integral component of business operations. It is through marketing that organization can capture its market and build a robust market segmentation (Hickman & Silva, 2018). The other strong department in Walmart Inc is that of research and development. It helps in studying the current market trends and suggest improvements. Besides, it is through research and development that Walmart can analyze the patterns of their competitors. It is through information got from research and development that enables Walmart to adjust accordingly and continue to do well both locally and internationally.
Due to these organizational designs, there are some effects which have been experienced in Walmart Inc. Among of those effects is the ability of corporate managers to influence employees easily in the entire organization. For example, the strategies and policies developed at the headquarters of the company are passed to regional managers. The local managers then give it to the store managers who break them into various employees. In that protocol, effective control and monitoring are attained in the hierarchical functional organization structure. Besides, the marketing departments and research departments have been experiencing substantial progress when it comes to giving information from top management to the junior employees (Schwend et al., 2017). However, it can be noted that the downside of this strategy has minimal support for the flexibility of the organization. It has been pointed out that the lower level of the organization strategy is not capable of adjusting practices. The rationale behind that challenge of flexibility is procedural and lengthy communications. Besides, there is a need of approval process, which is a profound way involves the middle managers and the organization managers at the headquarters of Walmart. It is an aspect which put in doubt the perspective of organization on the issue of inclusivity. In an effective organization strategy, the concept of inclusive should be highly considered for maximum performance (Rothaermel, 2016). It is noted that the directives are passed from the top management to the junior employees with ease. That should be the case when juniors want to influence the organization with the ideas maybe. It is an issue which needs to be addressed for the company to embrace the concept of inclusivity.
Walmart’s Organizational culture.
The culture of Walmart Inc. has the four main components. These are selected and approved components which guide the code of conduct of the employee and monitor their behaviours. Besides, these components dictate the capacity of organization when it comes to value addition of retail services of the clients. These cultural components are also known as the beliefs of the Walmart and are discussed as follows;
- The service to the customers – In connection to the customer services, Walmart is among the companies known to focus on that factor. In all their operations, the company puts its priorities towards achieving client satisfaction. Through their capable human resource department, the company can deal with all concerns of the customers and advice the company on how to act. The company also ensures that the products offered and especially for consumption are of high quality since they concern the health of the client. Besides, the employees are highly trained on how to handle all types of clients. It is among aspects that have enabled Walmart Inc to maintain the top position as the retail company.
- Respect for the individual – Walmart has a culture of recognizing the contributions of every employee towards the success of the business. It is a fact that employees form an integral component in the system of business operation. The employees are responsible for offering essential services to the client hence are used as tools for in a company. Without employees, it will be challenging for an organization to deliver as per expected. Walmart Inc encourages employees to respect each other and also encourage each other while at the line of duty. It is through this respect that robust team bond is achieved and even the creation of a conducive environment for work (Nygaard et, 2017). With an excellent environment of working, the employees give to their maximum, which is an advantage to the organization. It contributes a lot towards reaping the maximum benefit from the efforts of employees.
- Strive For excellence – It is a fact that the Walmart company Inc. is among the top retail Company known globally. To achieve that position is not easy, and it means that organization has worked very hard. Therefore, it is a culture of Walmart to strive for this excellence through good performance of the entire organization. For the excellence to be achieved, different structures within an organization should work together (Śmigielska, 2016). With Walmart Inc., that culture has been focused, and that is the reason why it is doing well in the international market.
- Action with integrity – The Walmart company, is known for maintaining integrity through promoting virtues such as fairness, honest and also impartiality when it comes to making decisions (Jorgensen, 2018). Maintaining integrity and especially improving honesty while dealing with clients is a crucial element towards the thriving of the business. Furthermore, it creates a good reputation for the company, which is among the essential ingredients of business success.
Conclusion and Recommendations
As it is discussed, Walmart Inc. is among the top retail company globally, and it is still outdoing its competitors. There are some reasons which are behind this success, and one of them is an effective organization strategy. The company has installed an organization strategy which aims at using the available resources efficiently and adding value to its products. Also, the company has a well established organizational design that has enabled the easy flow of business activities. In the business design, the issue such as marketing, technology, research and development and other logistics are captured well. About the organization culture, the company has identified critical aspects of being the best. The factors like focus on customer services, the respect for the individual, strive for excellence and promotion o integrity has been observed to work for Walmart organization. The Walmart organization design and strategy are ideal and should be emulated by other business of that nature. The aspect of managerial maximization and effective resource allocation should be embraced. However, Walmart can improve in applying its beliefs in the organization design context. Even though these beliefs are ideal, the company is still criticized about the failures of addressing employees’ grievances on the low wages. Also having junior employees being left out when it comes to making decisions should also be considered. Generally, the company should consider raising the salaries of junior employees and also embrace inclusivity while making decisions