Walmart business operations and retail strategy

Wal Mart

An Assessment of Wal-Mart's Business Structure

The effectiveness of the Wal-Mart business structure can be see in the continual profitability the company achieves despite having one of the most complex supply chains, fulfillment and retailing operations globally. The WalMart business structure is designed to ensure the highest level of supply chain efficiency and control of operating costs (Drogin, 2003). WalMart relies on its 24-hour SuperCenters also as distribution hubs throughout their logistics network, a strategy that has given the company exceptional control over procurement and strategic sourcing with suppliers and greater control of inventory turns than many competitors (Gereffi, Christian, 2009). The organizational structure of the company is attuned to capitalize on WalMart's supply chain dominance and execution efficiency, and the effects of this culture on efficiency, conflict resolution and motivation are discussed in this analysis.

WalMart Business Structure Analysis

Organized in a hierarchical structure with the majority of in-store employees being hourly employees filling the roles of cashiers, associates, team leaders, department managers and support managers, WalMart anticipates employees filling both roles of retaining and fulfillment. In this latter role of fulfillment, the hierarchical organization structure allows for flexibility of having in-store employees unload tractor-trailers of merchandise as well. This dual-role approach of the majority of employees is one of the primary factors in the company's low cost of operation. Typically there is a store manager, co-manager and assistant manager that comprise the team that manages all operations of a SuperCenter, from retailing and merchandising to fulfillment and logistics roles as part of the WalMart supply chain. According to filings with the Securities and Exchange Commission a typical SuperCenter will have 450 employees with the majority being full time (70%) or 315 (Wal-Mart, 2007). The remainder of employees are part-time and work approximately 20 hours a week (Wal-Mart, 2007) This staffing decision by WalMart of the mix of full and part-time employees is also complimentary to their organizational structure as it is hierarchical in design yet needs to be flexible in responding to supply chain, seasonal selling demand, and economic change. As a result, this has been very effective for the company and has given employees stability over time as WalMart is not forced to hire and fire to keep their stores profitable.