The Wal-Mart corporation is a large company that has a complicated structure and culture. Cost efficiency, cutting-edge logistics, dedication to consumers, and the ability to instill commitment and loyalty among the staff are all important factors in its foundation. The organizational model varies from one organization to another. The Wal-Mart corporation has a flat organizational structure, which enables it to have wide control over its operations as opposed to a tall structure with restricted control. It has a strong vertical authority structure, which is centralized rather than those with poor authority structures.
The success or failure of Wal-Mart is due to a variety of organizational behaviors, including communication, motivation, and decision-making. An organization’s culture is made up of the organizations values, mission statements, and objectives. Wal-Mart is the greatest example of a successful business with a robust organizational culture and structure.
Prices start at $12
Prices start at $11
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Prices start at $12
The organization of Wal-Mart is composed of various, semi autonomous components or divisions, such as those found in one company. Within one firm, there may be different divisions, each with its own aim and objective. The manager in charge of the workers under his division is solely responsible for its success or failure. Managers may devote more attention to outcomes because they are liable for them.
Organisational Structure of Wal-Mart
Sam Walton’s management principles and values were the basis for Wal-Mart’s administration structure and management style. Because of Wal-Mart’s growth, corporate executives needed to stay in touch with customers and store operations on a regular basis. The key to a good structure is a well-structured hierarchy levels and effective communication. Wal-mart is organized into a three product divisional structure.
It’s a structure that allows stores and headquarters to communicate in a close and personal way. Wal-Mart Stores (U.S.), Sam’s Club (U.S.), and international outlets are all successful retail businesses. Because each division is open to focus on its efforts on specific objectives such as products, services, or consumers, the divisional structure and approach is beneficial to Wal-Mart.
A narrow focus allows businesses to operate effectively because they can hone in on specific needs. Wal-Mart assigns regional vice presidents the responsibility of monitoring between ten and fifteen district managers in each region. The product, market, and geographic divisions are divided into three categories.
Employees who work in ‘Product structure groups’ are divided into teams based on different items produced by Wal-Mart. For example, creating three distinct products, “product a,” “product b,” and “product c” while maintaining separate divisions for each of these items.
Market structure organizes employees according to the markets in which it competes. A form of market structure is utilized by Wal-Mart as well. It sells items to individual customers and business clients. Market organization is used to organize the sales and customer care departments. Consumer sales and client service operate side by side, whereas corporate sales and client service collaborated together.
Employees are grouped together according to their particular geographic location, which is known as geographical structure. This is frequently utilized by Wal-Mart since it operates in many states throughout the United States and abroad. Delegation is the act of assigning responsibilities and tasks to other employees within the group or organization. These others were assigned these chores, but ultimate responsibility for completion still remains with the top level manager. To manage key functions at Wal-Mart, delegation is largely used.
From the regional management to the store manager, assistant manager, and down to the employees, a Walmart visit is led by a chain of command. The regional administrator has ultimate authority over the store operations. Walton family members have control over Wal-Mart. Authority and responsibility are delegated from on high by the Walton family to lower level managers to handle staff and carry out their individual responsibilities at Wal-Mart.
To be effective, a strategic plan must first be planned. It entails management evaluating the company’s present position and where it wants to go in the future. The function of organizing follows planning and demonstrates how businesses strive to achieve their objectives and goals. Wal-Mart is notorious for its low pricing but terrible service. The low prices are due to careful planning and organization. It makes use of an automated data collection and analysis process.
To keep things organized, Wal-Mart breaks its employees into separate divisions. The workers get orders and put everything in order by pricing and classifying items initially. Wal-Mart has access to effective information systems that may track inventory from receipt to shelf placement to purchase. Each departmental grouping can be assigned tasks by the lower level, manager utilizing this innovative technology.
Wal-Mart’s success is due in part to globalization, technology, and innovation. The growth of Wal-Mart into new areas has allowed the company to improve its profit margins by offering greater discounts. Within the basic principles of ethics and use of diversity, Wal-Mart became one of the world’s largest businesses dedicated to putting customers first over revenue. Because it involves departmental delegation throughout the organization, which makes each employee feel like an important asset for the business’s success, Wal-mart is able to achieve its objectives.
Wal-Mart has recently established its operations to include a worldwide perspective. Few years ago, it began looking for new opportunities, and now it is making progress at a rapid rate. When Wal-Mart purchases items because of its size domestically and because it sells many of the same products in various countries, it experiences economies of scale. Global procurement is beneficial to gross margins, according to management.
The money saved by having a smaller number of products can be used to benefit the business in other ways. The low costs achieved by Wal-MART contribute to its success. Managers must understand how to plan, organize, lead, and control in order for organizations to succeed. To instruct employees on how to do a certain task, managers must utilize their talents. In Wal-Mart’s management style, the control function is influenced by the way it is managed by a manager.
Delegations also have a significant impact on the success of a business. For example, if the manager has insufficient control, staff will lose value for him or her, and if he or she is too laid-back, they will leave the firm. It is the responsibility of the manager to consider all factors in order for the company to survive. Wal-Mart’s management structure is robust and effective, which aids in keeping the organization moving forward at a consistent pace. Wal-Mart offers initiatives to help identify high-potential individuals and assist them in developing into useful assets for the organization.
Wal-mart employees do not have unions, which provide greater flexibility, productivity, and no risk of strike or lockout. Wal-Mart has a more efficient supply chain that promises to deliver outstanding results. It gives an economic edge to Wal-Mart because it allows it to take advantage of lower cost sources from the cheapest locations around the world. Stakeholders are demanding for structural and policy changes as a result of Globalization, Technology, and innovation management.
Wal-Mart is an excellent example of a firm that effectively utilizes all available management functions. Britt D (2010) notes that globalization creates new possibilities for a larger market and allows for more rivals with greater skill requirements. Because to globalization, Wal-Mart is able to operate in numerous foreign nations while increasing its profits.
With the options they must make on how to keep up, Wal-Mart successfully maintains and outpaces its rivals. In 2001, Wal-Mart rewrote all of its mainframes in order to modernize its technology. Wal-M n continually offers new items at cheaper rates than its competitors. Wal-Mart has adjusted to the everyday development and demands of customers.
Organisational Culture of Wal-Mart
Wal-Mart is an economic and cultural phenomenon. It began with Sam Walton’s fundamental idea that customers should be given the lowest prices anywhere else. This simple concept is behind Wal-Mart’s organizational culture’s growth. Sam Walton worshiped at the temple of thrift and value for money. He was a religious zealot for thrift and value for money.
Undercutting competitors’ prices was a preoccupation that drove him to constantly seek for cost savings. He created an example that few of his older coworkers could follow. He took public transportation instead of taking taxis and avoided any company potholes for achievement. As a chairman, he was upfront about his priorities, which included employees, clients, and business details.
Giving individuals power, faith, and constant monitoring of their outcomes gave the firm a unique level of motivation and involvement. Even after the success of Wal-Mart, Walton drove an old pickup truck and shared budget hotels with his coworkers on company trips. He also wanted them to minimize their spending in order to bare minimal.
Following his death in 1992, the Wally Brandt way of thinking was still evident at Wal-Mart. After his death, the company continued to develop rapidly. For example, Wal-Mart’s “10-foot attitude” commitment is based on a request made by an employee: “I’d want you to promise that when you come 10 feet closer to a customer, you’ll look him in the eye, say hello and ask if you can help.”
The “Sundown Rule,” which states that every request, no matter how big or little, receives same-day service, has become the basis for Wal-Mart’s quick response management system. The new mission statement was intended to reflect Walton’s tenacity: “Save money and live better.” It now has four retail divisions: Wal-Mart Supercenters, discount stores under the name Walmart , Neighbourhood Market outlets, and Sam’s Club warehouses.
The first Wal-Mart store opened in Rogers, Arkansas, in 1960. They expanded by going public every year starting in 1970 and reached a total of 1,000 locations by 1990. In the next two years, it outpaced Sears. The penny-pinching mentality cultivated by Walton helped Wal-Mart become successful. This culture is still evident at the company’s headquarters. Instead of living in a metropolis like New York or San Francisco, Wal-Mart has its headquarters in Bentonville, Arkansas. The facility is uninspired and drab inside.
These employees work late shifts starting at 6:30 a.m. and finish on Saturdays half days. The primary goal of Wal-Mart is to keep retail pricing low, which has worked well for it. It’s been estimated that by lowering prices by more than 15 percent, Wal-Mart saves customers over $15 on a typical shopping cart of groceries. To achieve the ideal price level, Wal-Mart pressure its suppliers to cut costs. Suppliers are forced to reduce their prices at Wal-Mart.
In Charles Fishman’s book “The Walmart Effect,” he explains how the price of a four-pack of GE light bulbs fell from $2.19 to $0.88 in five years, demonstrating the logic behind this phenomenon. Ethnical variety plays a part separately, and it modifies and influences managerial style at Wal-Mart. A manager who understands, for example, may still have issues leading an uninterested staff that doesn’t care about their work or who may find another approach to lead them.
Employees may feel threatened by the fact that the manager is holding back information from them. This can lead to a situation in which the manager must manage or lead staff in order to complete the task. Wal-Mart is recognized for helping customers save money so they may live better. It also has a distinct corporate culture. The company’s values and ethics are at its heart. The regulations and customs have aided Wal-Mart in becoming one of the most respected businesses in the world. Wal-Mart operates within a community and creates a firm committed to quality.
Wal-Mart’s culture is built on an open door policy that encourages communication, which is critical for understanding and meeting customer needs. Associates can rely on the open door because it is a key component of their culture. The sundown rule dictates that Wal-Mart does its best to respond to requests by 5 p.m., the end of that day on which they are received. It’s accomplished by collaborating and depending on one another to get the job done.
Sam Walton’s belief in the importance of Grass Roots Process is demonstrated by his willingness to use a method that goes against conventional practices. The formal way of collecting associate feedback, as implemented at Wal-Mart, is called the Grass Roots Process. The 3 Fundamental Beliefs & Values focuses on respect for people and service to customers. These beliefs are carried out everyday when dealing with our clients and coworkers. 10 Feet Rule is a secret for customer service. Sam Walton urged workers to make a promise while visiting different stores: to treat consumers well and assist them if possible.
The concept of Leadership as a Servant implies that successful leaders lead from the bottom up. Wal-Mart encourages individuals to cultivate leaders who are servants and listen to their partners, staff, and helps in achieving objectives and responsibilities assigned. Sam Walton was a believer in the value of collaboration. As the company expands and changes occur at a quicker rate, teamwork becomes even more essential for adapting those adjustments and collaborating with others.
Based on the study of Wal-Mart’s structure and culture, it may be inferred that they have a significant impact on the company’s success. The organizational structure of Wal-Mart is straightforward, with distinct responsibilities for workers and lines of command. By adopting a divisional structure method, Wal- Mart has achieved broad span of control. Communication and coordination among employees are crucial for effective superior subordinate relationships. The corporate culture at Wal-Mart is defined by its goal statements.
The primary aim of Wal-Mart is to offer products and services at a lower price than any other firm. The management structure and culture of Wal-Mart are based on Sam Walton’s ideas and principles. Walton’s main concern was for CEOs to stay in constant touch with consumers and store operations. rather than profits, Sam Walton placed a premium on valuing customers, providing service to them, and striving for excellence.
At the same time, Walmart assigns jobs to its personnel in order for them to trust one another and maintain a positive working environment. The ideas of “10-foot attitude” and “Sundown Rule” helped Wal-Mart achieve outstanding customer service. Wal-Mart’s organizational structure and culture are governed by the founder, Sam Walton. He established simple yet ambitious goals for the company that can be achieved through adherence to values and principles.
Wal-Mart is a large and powerful retail corporation with operations in over ten nations. The company was founded in 1962 and is currently the world’s largest supermarket, not just in the United States, but also globally. The retail business is headquartered in Bentonville Arkansas. Wal-Mart’s goal is to attain higher sales by applying cutting-edge marketing techniques to provide low-cost and high-quality goods to customers all around the world.
The main goal of Wal-Mart, in essence, is to provide its goods at the lowest pricing to customers. In addition, one factor behind the company’s success was its structural design. The firm’s low-cost technique is aided by its structural architecture, which lowers operational costs. The firm is structured vertically with a small vertical management channel and a broad horizontal departmental blueprint in terms of structural design.
The goal of this paper is to analyze the organizational structure of Wal-Mart. Furthermore, the paper will identify how Etzioni’s three approaches to power and compliance relate to each other in the organization chart, as well as how the methods for power and obedience have impacted system development. The article will then offer suggestions for a suitable system.
Wal-Mart Organizational System Design
Wal-Mart has a short vertical management structure, which is intended to reduce operational costs. Geographic and divisional structures are used to describe the company’s structural design in general. The top executive governing body of the board of directors, however, makes key management decisions, similar to many large businesses. Furthermore, shareholders at the annual general meeting select certain individuals for appointment to the board of directors.
The Annual General Shareholders Meeting (AGM) is generally seen as the top decision-making organ of an organization. However, the Board of Directors (BOD) is the executive body that puts into action the decisions reached at AGM. The board of directors comprises fourteen members who are nominated by various parts of the company.
The board of directors is in charge of carrying out the decisions taken at the annual general meeting on a daily basis. The Chief Executive Officer (CEO) and the representatives of the annual shareholders general meeting are responsible for making strategic decisions in the company, which are then implemented by the board of directors.
The company is also divided into divisional and regional subdivisions. The sub-divisions have autonomy in their decision-making and activities. Strategic decisions, on the other hand, are made at the top of the organization. In reality, US Wal-Mart stores, Sam’s Club, and Wal-Mart international are some of the corporation’s sub-divisions. Governance and operations are more autonomous in these sub-divisions.
The sections are further divided depending on the principles of geographical locations. For example, there are three different Wal-Marts in the United States: Wal-Mart West, South, and North. International is split up into Wal-Mart China, India, Brazil, and Mexico at Wal-Mart. The regional presidents are used to represent the sub-divisions.
The senior vice president and the regional presidents usually meet at headquarters to bring order to the basic market and geographical divisions in the United States. The Market Managers, who are beneath the regional presidents, are in charge of controlling operations regarding Wal-Mart International throughout the world. Local Store Managers are directly accountable for operations in US shops, and they collaborate with Assistant Managers to execute a district’s (Swanson, 1992) strategic plan.
Managers of department stores are in charge of the store’s employees, including cashiers, sales assistants, and stockers. The Relationship between Etzioni’s three Approaches to Power and Compliance in the Organization’s Chart. Ze’ev Etzioni developed ground-braking techniques for evaluating companies’ structures. Many organizational scientists refer to the Etzioni method of assessing a company’s structure as the compliance supposition (Lunenburg, 2012). According to Etzioni, organizations’ structures are evaluated based on the type of force used to affect employees’, investors’, and customers’ perceptions.
Furthermore, the organizations are classified according to the level of engagement of the stakeholders in the organization. Shaw and Zollers describe three forms of power in organizations: coercive, utilitarian, and normative (1993). Power is about control. While The nature of power is linked to participation levels, life in companies follows a complicated procedure (Lunenburg, 2012).
Types of Power and Compliance. Coercive power
Fear is generated in this form of power by the application of force. In fact, the use of force and coercion allows for control or subordination (Lunenburg, 2012). The usage of this sort of power is rather prevalent in corrective institutions as opposed to business firms. Such hierarchical arrangements are intended to enforce discipline through force.
However, the lowest management levels of the company, particularly in-store hourly workers, are still scared and subjected to this type of forceful persuasion (Champoux, 2011).
In this form of power, incentives are used to encourage loyalty and improved performance (Greenwood & Miller, 2010). The rewards systems may be dependent on the position or level of the employee (Greenwood & Miller, 2010). Wal-Mart is a prominent business organization that utilizes this type of power. In reality, it is this form of power associated with Wal-Mart.
In other words, like all businesses, Wal-Mart uses this kind of compliance to manage its lower levels of workers. The type of institution structure implies that the reward system is contingent on the power structure’s arrangement. In reality, the organizational design’s structural design closely resembles Etzioni’s utilitarian form of power (Greenwood & Miller, 2010).
Organizations use normative power to dominate less-senior workers through the provision of inherent incentives (Shaw & Zollers, 1993). Interesting work, social responsibility, and administrative ceremony are some of the intrinsic rewards. In most situations, the management’s authority in this scenario is determined by its ability to control the symbolic remunerations. In fact, Wal-Mart demonstrates how a firm may exert control over employees via various symbolic pressures (Shaw & Zollers, 1993).
Types of Involvement
The type of power firms use to attain subordination is based on the degree of participation by their employees, according to Etzioni (1992). In this situation, involvement refers to a management’s attitude toward the level of administration that may be built from the top down. The participants’ engagement in management can also take the form of categorization, ranging from calculating to moral (Swanson, 1992). For example, at Wal-Mart, lower-level workers perceive managers with a calculative attitude.
How the Approaches to Power and Compliance have influenced the Development of the System
The compliance approach classifies organizations according to the kind of power they use to direct workers’ actions and other stakeholders, such as communities where they operate (Lunenburg, 2012).Further, organizations are classified depending on the degree of involvement of their members. Some businesses may utilize coercive-alienative force while others might employ utilitarian-cullectic force.
The final type of combination is normative-moral (Swanson, 1992). Firms may either combine two of these predictabilities or use all of the power forms. A firm that tries to apply power in an unsuitable context, however, will suffer decreased efficiency and effectiveness. Domineering and ethical application of coercive and normATIVE POWER by management and employees can lead to increased losses for retail businesses.
Furthermore, by utilizing Etzioni’s innovative approach to organization structure, retail organizations such as Wal-Mart have a design that reflects the right amount of power and involvement needed for their operations. In reality, most business organizations’ structural designs adhere to the compliance theory set forth by Etzioni (Lunenburg, 2012).
According to Etzioni, the structural design of organizations is influenced by coercive, utilitarian, and normative forces (Greenwood & Miller, 2010). In addition, three types of participation are linked to a number of variables (Lunenburg, 2012). The organizational structure would be determined by the environment and participants’ power and involvement levels.
These variables affect the structure of Walmart and shape it into a utilitarian-calculative design, depending on the organization’s major objectives, client demands, workers’ needs, and investors’ expectations.
Despite the fact that Etzioni suggested coercive power, it has little bearing on Wal-Mart. However, the organizational form could be taken from the coercive model of power interrelationship’s features (Shaw & Zollers, 1993).
The organizational structural design of the Wal-Mart corporation is more strongly influenced by the power interrelations. The business organizations’ reward systems are based on the organization’s structure (Champoux, 2011). In designing its organizational structure, Wal-Mart employs similar ideas.
The conventional power is the sort of interrelationships that have an impact on Wal-Mart. In fact, businesses like Wal-Mart have the capacity to influence lower cadre workers through offering extrinsic incentives. The reputation of Wal-Mart for being able to use various forms of coercion and symbolic rewards to mold its low level workers is well known.
The store should have a short vertical style with emphasis on the horizontal design, based on the structural arrangement. The structure is essential in allowing inter-organizational communication and consultations among departments and regions, which aids in increasing employee performance. The structure also lessens attitudes that arise from power differences, such as calculative perceptions linked to utilitarian power that characterizes retail businesses.