Sam Walton's mission and Wal-Mart's organizational strategy

¶ … mission of the organization?

Sam Walton -- founder of Wal-Mart -- demanded that expense be kept to a bare minimum. His belief was that you offer the lowest prices possible and volume. Wal-Mart's focus is on chipping prices, be this with the goods they sell, or the way they run the store including their notorious low wages, frugal corporate cultures, and push to make suppliers sell items at increasingly cheaper prices.

Wal-Mart's driving goal is to keep retail prices low, and everything - including technology and corporate culture -- work towards frugality. To that end, Wal-Mart's suppliers are pushed to cut prices as low as possible. In "The Wal-Mart effect," author Charles Funishman describes how a four-pack of GE light bulbs decreased from $2.19 to 88 cents, and how Wal-Mart buyers demand that suppliers either lower the price or increase quality every year on every item. Wal-Mart's philosophy is "plus one"

It aims to be a discount stores that offers its consumers everything from nails to food and beyond -- everything that one can possibly need -- under one roof at the lowest price (David & Graces, 2009).

As WalMart itself writes its mission to be: "Save money. Live better." That is its credo.

What are the external and internal issues facing the organization?

The external issues are certainly Wal-Mart's notorious reputation for its labor relations and the contemporary social trend that is disturbed by such treatment. One of the world's largest and most successful corporations, Wal-Mart is exemplary of all that is considered worst of capitalism: greed, poor ethics, selfishness, non-Christian self-centered focus on me as one and charity as last and poor worker treatment. Criticized for its exploitation of workers, as well as for its resistance of union organizations and campaigning, Wal-Mart has been boycotted by some and criticized by many.

Wal-Mart is notorious for its frugal culture including paying meager wages to its employees and providing stingy health-care plans. Store managers are expected to work overtime without pay, and often work more than 70 hours per week. The stores are under heated in winter and go tight on their air-conditioning in summer. Wal-Mart is headquartered in a cheap, rather than expensive city like New York. Its headquarters is drab; their executives are expected to go frugal on personal and store expenses. Their executives work long hours, arriving at work before 6.30and working half-days on Saturdays.

Wage abuse, sex discrimination, and anti-unionism are just three of the allegations that Wal-Mart faces. Women comprise a high 70% of their organization, but they are mostly in sub-clerical roles, and all of Wal-Mart's employees without exception suffer from miserly work conditions and below-standard treatment. Their treatment of their employees consequents in diminished market share with the impression of a cheaper environment and more common, dissatisfied staff (whether true or not) when, for instance, compared with Target whose polished interior and seemingly more sophisticated impression as well as content staff gives Target the appearance of being a chain of slightly higher quality and retail appeal. Poor pay, whilst helpful in certain aspects, lowers the shopping experience fro consumers who may find employees not only under-motivated but also rude and uncouth. Wal-Mart's competitiveness, therefore, may inadvertently benefit from customer dropout despite Wal-Mart's bargain-basement prices.

Cited as an external problem, Wal-Mart's poor labor relations may well be considered an internal problem too, since research consistently shows that comparable retail giants have demonstrated that better work benefits, fairer wages, encouragement of social interaction amongst employees and some level of personal autonomy all contribute to a more versatile and competent employee. As we will see with Branson later, it was all of these elements that led to the success of his company.

Low wages can also lead to high employee turnover, never good for any company least of all for a corporation that has to always expend money in recruiting, attracting and training new staff (Patterson & Biagi, 20030.

What changes must you make to achieve the vision?

Given the various challenges that Wal-Mart has faced on the legal and public relations front, it is little wonder that it is setting its attention to addressing its working conditions. But too little is being done, whilst its primary goal is still focused on "being more aggressive in buying merchandise" (Anderson, 2005). Wage abuse, sex discrimination, and anti-unionism are just three of the problems that Wal-Mart experiences. Others include streamlining and standardization of effective recruitment methods as well as drafting of ethical standards for personnel treatment, better work benefits, encouragement of social interactions amongst employees, and enhanced personnel autonomy. Wal-Mart has accrued a lot of criticism for its stinginess. Its power prevents it from being corrected in ways that it ought to be. Its treatment towards employees, for instance, seems to overstep the legal requirements regarding working conditions. Altogether, Wal-Mart seems to be an oligarchy that needs to be controlled for whilst it is attractive in providing clients with low prices, its frugality has become ugly and legal action is desperately needed to correct a wrongful and unjust situation.

A compensation plan better aligned with industry standards, a recruitment strategy designed to bring aboard talented rather than low-paid personnel and more clearly defined ethical standards will ultimately make Wal-Mart a better corporate citizen and, therefore, more successful. Minor changes would include a more efficient automation process, where more effective cost- and time-saving strategies would be realized. Wal-Mart should also work on providing better training as well as improving its customer care. Its reward, salary, and remuneration system should be transparent, and open to the public. The company should also possess medium and long-term strategic plans that are made in such a way that the core cultures and regulatory principles of the company are reviewed and changed with time so that it does not seem o be a change stack company. Apparently sliding into smugness due to its inordinate success, Wal-Mart is recommended to never forget that competition is strong and struggling to overtake it - and may well do so in the future -- unless they improve their game. Forgetting God and considering themselves to be God, the Company will do well by being more humble, charitable, and truthful; and not only mouthing but also practicing an open-door system by having a democratic governance system in place.

I would take Branson's style of management and operating environment as example, particularly since Branson's treatment of employees is Christian-based and exemplary of the way the bible recommends that the master should treat his workers (caring for the worker, according him respect, and caring for him just as he does for the self). Branson, as he himself writes, is careful to apply the Golden Rule at all times and to all workers regardless of capacity or rank. He attributes his success to his Christian principles, and it is for this reason that it impels my interest as suitable model for Wal-Mart to learn from. Indeed, Branson's Virgin has an almost diametrically opposite operating environment to that of Wal-Mart.

Their credo is on making the employee as satisfied and relaxed as possible, for their philosophy is that employee satisfaction (including excellent benefits and perks) will spell motivation, hard work, and customer satisfaction. Branson fragmented his collection of companies into more than 100 loosely connected enterprises, each of which is run by a small, streamlined staff. Rather than a rigidly defined set of rules, the individuals of each company are given power and responsibility, and this, Branson believed, encouraged the employees as well as the heads of each specific company to excel in a manner in which they would have otherwise not done had they been accountable to one CEO. More so, each company is encouraged to develop its own distinct identity, and Branson encourages employees to maintain their innovativeness Virgin's focus is on making communication and experience within the company relevant, experiential, and fun.

How will you mange the change process/

The Paretto Analysis is ideal for this situation since Wal-Mart has a mass of goals to accomplish and the Paretto analysis helps prioritize tasks in order of importance. Faced with an overwhelming surplus of responsibilities, the Paretto analysis would help Wal-Mart prioritize the various challenges that will most dramatically improve the situation.

Also called the 80-20 rules, the Pareto Analysis is also applicable since it serves to encourage the agents of Wal-Mart in making their change. 20% of causes, according to this method generate 80% of the results; the managers, therefore, just need to find those most significant 20% determining factors.

The method:

1. Managers will list the problems that they would like to solve or the changes that they would like to implement in the organization. Included here, for instance, would be better working conditions and a mentality that would more effectively indicate Christian charity and humility..

2. For each stated problem, managers and change agents will identify the fundamental cause as far as they are able. Brainstorming with stakeholders of Wal-Mart's company (people who are involved in investments, in development of country, prospective consumers, individuals on the Board, employees etc.) could help here. Need to cut check-out lines, for instance, may be traced to motivating more employees to work for Wal-Mart hence bettering employee conditions.

3. Managers / change agents would then score each intended change, the scoring method depending on the particular intended characteristic. For instance, in terms of improving customer satisfaction, they might score on the basis of incoming complaints, or complaints eliminated by solving the problem.

4. Managers / change agents will group problems under their root course. For instance, one or more problems that are linked to organizational mismanagement would be placed under that category.

5. The scores of each cause group would be totaled, and intended changes (or tasks) prioritized so that changes with higher scores will receive foremost priority.

6. Finally, my recommendation is that managers and change agents will deal with the causes of those problems starting with the top-most challenges first. The advantage her is that those problems with the least scores may be negligible or may have nullified themselves by the time they work their way to them.

Adopting this approach may help Wal-Mart achieve its missions by the time 2016 rolls around.