With advances in technology, companies are finding ways to improve their orientation toward globalization. Even retail companies such as Wal-Mart have explored ways of improving performance by taking better conservation steps and refining supply chain a management. The discussion here considers some ways that the image-embattled company can improve itself.
Walmart
Strategic Management at Wal-Mart
Wal-Mart is a highly successful but highly controversial publicly traded firm. The most successful retail firm in the world, Wal-Mart also struggles with a number of challenges both to its internal structure and to its public image. Especially as the process of globalization has accelerated and Wal-Mart has been a highly active player, its actions for profitability have at once earned it considerable revenue returns and a declining reputation. This discussion addresses ways that Wal-Mart can use strategic management ideas to return balance to its image.
Historically, globalization has given Wal-Mart the opportunity to bypass domestic labor and environmental laws in order to conduct its production operations at a minimal cost. However, more recently, technological advances have given Wal-Mart a way to improve the strategic management of its offshore production facilities that positively impacts the working environment, the natural environment and the bottom line all at once. As Humes (2011) points out, "the company is pocketing hundreds of millions of dollars with more planet-friendly practices that lower carbon emissions, conserve energy, save forests and radically reduce landfill waste. Soon this sustainability payback will be in the billions. Greening the business, it turns out, is a comfort, not a curse, in a tough economy." (Humes, p. 1)
As a result, efficiency improvements in its facilites, adjustments to its supply chain management through technological improvement and reductions in transportation and energy expenditures are influencing other retail mega-stores to improve their sustainability practices while bringing Wal-Mart greater financial efficiency.
Using the Industrial Organizational Model, we can see a clear and immediate path to performance improvement for the Wal-Mart Corporation. Specifically, while Wal-Mart has consistently been a leader in revenue within the retail industry, it has lagged behind others in its industry on employee compensation, labor relations and fair labor practices abroad. According to the text by Martorell (2011), through an industrial organizational lens, "the firm's performance is believed to be determined primarily by a range of industry properties, including economies of scale, barriers to entry, diversification, product differentiation, and the degree of concentration of firms in the industry." (p. 1)
The latter of these should incline change at Wal-Mart, which has suffered with prospective customers as a result of its decidedly negative reputation on labor relations and related issues. Looking to companies like Target, who have achieved favorable returns and high profitability while compensating employees at a higher rate and with greater benefits, Wal-Mart can see a shift in industry standards. As a consequence of this shift, the company is falling behind determinant industry properties such as higher functioning employees, lower employee turnover and better public relations orientation. Though some greater expenditures would be required at the outset for employee compensation and benefits, greater than average returns could be anticipated with a greater focus on employee advancement and career development.
Alternately, the text by Habbershon & Williams (1999) defines the Resource-Based View (RBV, p. 1) for the purposes of the present discussion. The text indicates that "the RBV isolates idiosyncratic resources that are complex, intangible, and dynamic within a particular firm." (p. 122) This isolation allows for the identification of those features that might provide a firm with greater competitive advantage.
In the case of Wal-Mart, changes to its supply-chain management which might greater seize the advantages of its considerable technological capabilities are called for. One possible approach is underscored in the article by Chen & Hasan (2008), which addresses the relationship between supply chain strategy and the capacity of a company on Wal-Mart's scale to absorb rapid shifts in demand. Chen & Hasan recommend the use of Advanced Planning and Scheduling (APS) as a way for firms of every size to manage the impact of rapid demand shift. According to Chen & Hasan, "APS solutions have paved the way for broad operations changes such as sales and operations planning (S&OP) or lean supply chain initiatives. When properly deployed, APS can improve supply chain operations significantly as gauged by traditional measures such as inventory and customer delivery performance." (p. 30) Here, we recognize that Wal-Mart possess the economic and technological resources to undergo a change in the IT strategy guiding its supply chain management.
Indeed, Wal-Mart's Mission and founder Sam Walton's Vision both reflect a primary interest in using globally available resources to offer customers the utmost of savings. According to Wal-Mart's own website, "We believe that by applying our "Save money. Live better.®" mission to big global challenges like energy or the cost of prescription drugs, we can deliver both value and quality to our customers, and ensure that neither comes at the expense of responsibility."
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