culminate learning achieved demonstrating knowledge organizational management synthesizing information class work life experience. Focus Final Paper Think organization worked familiar.
The business climate of the modern day society is rapidly changing due to emergent pressures in all technological, political, economic, ecologic or social stances. As technology evolves, the business entities are forced to cope with intensifying competition, to allocate new funds and to integrate new technologies that improve organizational operations. Then, in the context of an increasingly global market place, the economic agents have to simultaneously comply with the regulations issued by multiple regulators. In terms of the economic pressures, these refer to changing prices of commodities, but also the internationalization of the economic crisis, which generates changes in customer behavior. Finally, at the level of the social and ecologic environments, the economic agents are faced with more pressure to operate in a means in which they create benefits for the community.
In such a complex setting then, it becomes imperative for the economic agents to change their approach to attaining their business objectives. In other words, the primary scope of the economic agents in the modern day society remains the increase in their profitability rates, the means to attaining this objective has changed as the business entities have to respond to the increasing demands of the stakeholder; otherwise put, the profitability objectives have to be attained through the satisfaction of the needs and wants of the customers.
In order to best assess this situation, the case of Wal-Mart would be presented and change implementation would be proposed through the Kotter eight steps to successful change. The selection of America's largest retailer is based on the fact that the company implemented a model based solely on profitability, yet this model no longer seems applicable today, revealing as such the need for change.
2. Diagnosis of the problem
Wal-Mart was established in 1962 in Bentonville, Arkansas by veteran Sam Walton, who, having returned from the army, had a vision of creating a one stop store, where people could find an increased selection of products, at affordable prices. Walton's vision also included the creation of a workplace that recognized and rewarded the merits of its employees and created a positive and favorable working environment.
Since those times however, the implementation of this vision has been replaced with the pursuit of profitability. Wal-Mart's motto is "Save money. Live better" (Website of Wal-Mart, 2012), indicating their commitment to present the customers with the lowest possible price. Their business model is based on the cutting of costs in order to present the customers with the most competitive prices. And the company's success has been due to the popularity of the lowest price among consumers. With the aid of this model, the company has been able to generate billions in profits.
Still, the pursuit of the lowest price for purposes of profitability has also been characterized by severe problems, which currently cast negative shadows upon the reputation of the largest American retailer. Traditionally, Wal-Mart had been created for its customers and for its employees, as a place with the aid of which the community would thrive. Still, in the recent decades, the emphasis has fallen more and more of financial gains, and the well-being of the customers, employees and community took a second place.
Some examples as to how Wal-Mart has failed to implement its initial vision and has been sidetracked by profitability objectives include the following:
The pursuit of the lowest price has led the company to sign contracts with purveyors outside the country, as these offered cost effective prices; this took away jobs from the local producers and farmers, generating negative impacts upon the socio-economic strength of the community. Additionally, importing products from foreign regions resulted in customer limitations, such as the lack of access to local products.
In the search for the low price, Wal-Mart often imported food items, which lost their freshness when transported long distances. The customers were as such negatively impacted by the decreased quality of the items.
The organizational attention towards the employees has also been decreased as the company's priority was to cut costs and allocate as little as it could to its personnel. The employees were as such paid minimum wages and selective medical insurance, which did not cover all their needs.
Relative to the employees, the company also implemented several artifices to have them work longer, for less pay; for instance, a few minutes before the end of their shifts, the employees would be asked to complete hour long tasks. Since these tasks had been assigned during scheduled hours, they were not computed as overtime, causing the employees to work extra for no pay. Additionally, the employees have often complained about the lack of interest in the professional development of the staff members and have even pointed out to situations in which they had been discriminated against. A former African-American employee stated that she was up for a promotion, having more than the skill set and experience that was necessary; in the last moment however, her manager selected a Caucasian male for the promotion.
The poor treatment of the staff members was reflected in their morale and performances on the job, which subsequently materialized in low quality of the services provided to the Wal-Mart customers, and additionally supported negative impression among the buyers.
Last, Wal-Mart has invested millions of dollars in its internal security system, which prevented thefts from occurring in the stores. They installed security cameras in each corner of the store and they hired guards to survey the stores. Still, the parking lots were left entire unprotected and unguarded, becoming on occasions scenes to robberies, assaults and even murders (Greenwald, 2005).
All in all, the largest retailer in the United States is a powerful company and a successful business agent, representing a model of financial results. Still, this position might be threatened by its weakening reputation. Overall, the problem encountered at Wal-Mart is given by its sustained desire to cot costs, without being able to adapt its business model to the changing features, trends and needs of the environment.
This problem of inflexibility and inadaptability has also been observed in the company's failure in Europe, where Wal-Mart strived to implement the standardized American model, but failed due to the social and cultural differences across the nations, and the inability to identify and adapt to these differences (Knorr and Arndt, 2003). All in all, it becomes obvious that the long-term sustainable success of Wal-Mart comes to also depend on its ability to understand the needs of its various stakeholder categories and to integrate them within the business model.
3. Kotter's 8 step approach
Implementing change within organizations is a highly complex task and various difficulties can be encountered. At the level of Wal-Mart for instance, it would be challenging to implement the change at the entire level of the entity, due to its large size. Additionally, it would be difficult to engage the employees in the change process, since these are already dissatisfied with their employer, but also since the staff would naturally be reluctant to changes (Weiss, 2012).
In order to overcome these challenges and ensure a smooth implementation of the change process, it is recommended for the retailer to implement the 8 step process, as developed by Kotter. At a generic level, these eight steps refer to the following:
(1) Establishing a sense of urgency
(2) Creating a guiding coalition
(3) Developing a vision for change
(4) Communicating the created vision
(5) Empowering action
(6) Creating victories within the short-term
(7) Ensuring consistency, and last
(8) Developing the organizational culture to integrate change (Kotter International, 2011).
The lines below reveal how each of these eight steps in the Kotter model for change implementation could be employed at Wal-Mart in order to make the company more flexible and adaptable to the needs of the various categories of stakeholders, such as employees, customers, business partners, governmental and non-governmental institutions, the general public and so on.
(1) A sense of urgency
At this first level, it is important to note that the change in the Wal-Mart business model can only succeed if it is perceived as urgent and necessary by the parties involved in the change process. In such a setting, it would be necessary for the managers to identify the threats facing the company and to present these to the employees. The managers should engage in open and free communications with the executives and the employees and the benefits of the change would also be presented (Mind Tools). Given the current context at Wal-Mart, in which the employees are dissatisfied with the state of affairs, it is highly likely to easily engage them in the change process.
(2) Guiding coalition
The successful implementation of change is also pegged to the ability to create an image of the change; this would take the form of a coalition of managers to promote the change and gain support for it throughout the corporation. The…