Walmart Social Media Strategy for Workers and Global Markets

Introduction

Operating in over 27 countries, Walmart is one of America's largest retailers. The company is also billed as the world's largest enterprise on the basis of revenue. Since its establishment in 1965, Walmart has spread its operations across the world and is today regarded as the world's largest private employer. Additionally, the retailer was ranked 20th in the world's most valuable brands listing as of 2015. Research indicates that two issues impact the productivity as well as competitiveness of the retailer: workers' rights and customer needs when expanding into foreign markets.

In seeking to address these concerns, a number of well-considered solutions will be proposed. It is important to note that Walmart has in the past been criticized by civil rights organizations as well as labor unions for a number of worker rights violations — particularly with regard to work hour and wage violations. The company has, in fact, been taken to court by its employees over these violations. Lawsuits and payback actions divert the company from its business course and demotivate employees, leading to productivity problems. Is there a way the company could ensure that the needs and concerns of employees are addressed in good time? Can Walmart make use of social media to foster better relations with its employees?

Additionally, the retailer has in the past been forced to pull out of some key foreign markets due to its failure to embrace a business model responsive to local realities — that is, the expectations and needs of customers in those markets. Prominently reported pullouts include, but are not limited to, China, Germany, and South Korea. Failure to adopt an effective communication strategy in the markets it enters may have contributed to these setbacks. It is important to note that Walmart maintains a number of social media platforms from which it frequently interacts with customers worldwide. The question remains, however, whether the company is making optimal use of these platforms. This paper discusses how social media can be utilized to address productivity problems at Walmart.

The Organization

Walmart is the world's largest retailer. Currently, the company has approximately 11,000 stores spread across 27 countries, with the U.S. serving as its headquarters. Established in 1965, the retailer was initially family-owned — with founder Sam Walton as the family patriarch. Over the years, the company has outlived its "family enterprise" reputation to become one of the largest companies in the world. It is regarded as one of the world's most valuable brands and was ranked 20th on that list for 2015 (Forbes, 2015). Fundamentally, Walmart is a low-cost retailer; its winning strategy is the provision of goods and services at prices other retailers find difficult to match. The company reported $485.65 billion in sales revenues for 2014. As posted on its website, Walmart aspires to offer its global clientele everyday low prices in an effort to improve the quality of life of its customers (Walmart Annual Report, 2014). This customer focus was formulated by founder Sam Walton and continues to inform the retailer's official mission. Consider this statement:

"If we work together, we'll lower the cost of living for everyone … We'll give the world an opportunity to see what it's like to save and have a better life." (Walmart Inc., "Our Story," 2016)

It is for these pocket-friendly prices that the company continues to be favored by price-sensitive customers from around the world, particularly in America. Walmart's core operations are spread across three key segments: Walmart U.S., Sam's Club, and Walmart International (Walmart Inc., 2016).

Walmart maintains what can be described as a flat organizational structure — one with minimal positions between top management and lower-tier managers. The core divisions currently operated are the U.S. division, the International division, and Sam's Club. The company's chief executive officer is Doug McMillon, deputized by Greg Foran, David Cheesewright, and Rosalind Brewer for each of the three divisions respectively.

Walmart's flat organizational structure benefits the company, particularly in facilitating communication between the three key management levels, as reporting levels are significantly reduced. Communication technologies further facilitate coordination among division managers, who are located at the company's headquarters, and district managers in the field (Brunn, 2006). Individual stores are managed by general managers, who are assisted by assistant managers and co-managers based on store size. The reduction of reporting levels also enhances employee access to higher-level managers, effectively boosting organization-wide communication. The company additionally maintains an open-door policy intended to improve lower-level employees' access to top managers.

Walmart's organizational culture, according to the Walmart Diversity Report (2014), rests on four components: service to customers, respect for the individual, striving for excellence, and acting with integrity. Although well-defined, this culture may not always effectively enhance collaboration and communication between associates and managers. Managers have been accused of not always being available for consultation. As Brunn (2006) recounts, one Walmart associate who raised concern about her heavy workload and missed breaks was told by her supervisor that if she could not handle the job, the retailer could easily replace her with someone who would be glad to have it.

On the social media front, Walmart maintains significant presence on platforms including Foursquare, YouTube, Flickr, Twitter, and Facebook (Walmart Inc., "Policies Section," 2016). The company has a following of more than 26 million fans on Facebook and uses these platforms to engage customers, partners, and for marketing purposes. Its Facebook page, for instance, includes a feedback tab that permits customers to post complaints and ideas. One notable limitation, however, is that the retailer's social media strategy tends to lean toward external stakeholder engagement at the expense of internal communication, networking, collaboration, and employee engagement.

The Problem: Worker Rights and Customer Needs

Walmart has faced intense pressure from civil rights organizations and labor unions as a result of numerous workplace violations, including work hour and wage infractions. According to Brunn (2006), the company was at one point required to pay back 83 employees after a court ruled in favor of workers who had been forced to work off the clock without compensation. The company has also been accused of sex-based discrimination. As Ferrell et al. (2009) note, the retailer's top management tier is comprised of only 10% women, despite women making up the majority of Walmart's total associate payroll. Reports have further indicated that the company is insufficiently tolerant of employee unions — Ferrell et al. (2009) point out that the retailer has been accused of actively sabotaging unionization efforts through, among other things, the intimidation of those who advocate for unionization.

As a multinational corporation seeking to extend operations globally, Walmart has established itself in markets it considers commercially promising. While the retailer has succeeded in some international ventures, it has performed poorly in others — most notably in China, Germany, and South Korea, where it was forced to withdraw due to a failure to account for local customer needs and expectations. According to Gandolfi and Stratch (2009), Walmart was forced to exit South Korea because it failed to embrace and internalize the shopping preferences of local consumers. Its business model remained rigid even as it sought to operate in a non-traditional market.

As the authors explain, South Korean shoppers favored visually appealing and aesthetically engaging product displays, while Walmart retained its standard American-style store format. Furthermore, South Korean consumers prefer fresh foods over dried goods — yet Walmart chose to stock the latter. It is clear that the company lacked a sound understanding of local preferences and expectations, which might have been avoided had it engaged meaningfully with local consumers before launching operations. The company could, in this regard, have leveraged its social media presence to conduct "ground-tests" aimed at understanding the needs and preferences of South Korean shoppers.

Conclusion

It is clear from the discussion above that the adoption of social media technologies would yield positive outcomes for Walmart and help address the two issues identified. Social media platforms can be used to engage consumers in non-traditional ways, and an organization can tap into consumer conversations to gain richer insights into the specific needs of its customers.

While a high percentage of organizations use social media in some form, only a handful can claim to have fully benefited from it. Although Walmart has significant social media presence, it has not yet harnessed this presence to secure new markets by understanding consumer needs and preferences in those markets. Nor has it fully leveraged social media to enhance internal collaboration and knowledge sharing. Companies like Walmart often develop ways of reaching and engaging customers via social technologies to improve customer service, marketing, and product development. There is, however, far greater potential value in using these technologies to facilitate knowledge sharing and enhance collaboration both within and beyond the organization.

By fully embracing social media technologies, Walmart could raise employee productivity levels through improved communication and collaboration across the enterprise. Ultimately, the effectiveness of social media technologies depends on the level of employee participation and the degree of support from top management.

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