Wal-Mart Management and Leadership Analysis XXXXXXXXXXX Organizational Behavior and Group Dynamics/Mgt 330 November 11, 2009 Ronald Sprague Wal-Mart Management and Leadership Analysis Wal-Mart is arguably the most dynamic corporation in the last 50 years in the United States, if not the world. Arising from its beginnings in Bentonville, Arkansas, it has grown to over 4,400 discount stores, super centers and corner markets worldwide. Wal-Mart continues to expand despite public criticism of its labor practices as well as complaints about their treatment of competitors.
The many strengths of Wal-Mart, like their low cost production and marketing practices, will aid Wal-Mart as it continues to grow in the retail industry. Ending their labor problems will strengthen their largest weakness further allowing growth. This author will analyze the management and leadership styles of Wal-Mart, in addition to the organizational culture, has made Wal-Mart the global powerhouse they are today. Management and Leadership To be clear, management and leadership are not interchangeable terms. Leadership is an action; management is an administrative title.
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While leadership is the art of directing and influencing others to accomplish a goal, management, by definition, is merely a function of administration. There are many factors that determine how a goal is accomplished and for as many factors that there are, there are just as many types of leaders. Leaders can be charismatic and influential, but they can also be lame and impotent. Perhaps the best definition of leadership can be found in the following paraphrased quote by Cassie Skinnet: “A [leader]…is a person that can tell you to go to hell in such a way that you actually look forward to the trip. Throughout history, there have been many effective leaders. No matter what their agenda, their one common attribute is that they were able to attract a following of people who strongly believed in them and their message. These leaders possess certain traits or characteristics that set them apart from most people. Leadership energizes a corporation and encourages followers. The highly successful management and leadership style at Wal-Mart is innovative and original.
Developed by its founder, Sam Walton, in 1962, associates are often encouraged to “break all the rules” (Wal-Mart Management, para. 2) in an effort to provide the best customer service and lowest prices in the industry. In addition to continuous team training, management associates undergo an intensive leadership development course that focuses on communication skills, coaching for success and team building. Advanced senior leadership seminars are also encouraged so that managers can build on their skills and apply them to real-life situations (Wal-Mart, 2001).
It is apparent that Wal-Mart provides its managers with every possible opportunity to become successful leaders and encourages their growth and success with the company. Organizational Culture Although there is not one specific definition for “organizational culture,” it can be loosely defined as the beliefs and values around which a corporation is organized. Therefore, a healthy organizational culture would be one in which all members of management are working toward the same common goal by maximizing employees’ creative ideas and marketing strategies.
Managers on every level have a direct impact on organizational culture and employee satisfaction, as their subordinates constantly scrutinize them. It is crucial that managers use caution when making decisions, ensuring that they execute determinations with fairness and that their ethical standards are in line at all times. An unhealthy work environment can lead to employee dissatisfaction and result in high turnover, costing the company thousands in training costs.
During the last decade Wal-Mart management has suffered extreme criticism over their unfair labor practices. Although Wal-Mart management maintains that they treat their workers fairly by providing fair wages and benefits, however statistics show that Wal-Mart is hardly providing the benefits the labor unions demand. Wages and benefits are not the only complaints Wal-Mart is now facing. Recently, Wal-mart was accused of denying women equal pay and opportunities for promotion (Bianco, 2003).
Wal-Mart attempts to distract from their past and present diversity issues by devoting an entire section of their webpage to this subject but until Wal-Mart can show statistical proof reflecting their claims of fair wages, good benefits, and equal treatment, the complaints by the unions and consumers will continue. These upper level management decisions are having a negative impact on the company and providing an unhealthy organizational culture for the organization. Healthy Organizational Culture A healthy culture is crucial to the success of any organization.
Creating a healthy organizational environment is the responsibility of the organizational managers and leaders in collaboration with their employees. One strategy that an organizational manager can employ in order to create a healthy culture is to provide an atmosphere of personal responsibility and accountability. By creating an environment where teams can hold each other accountable while celebrating successes as a team intensify loyalty, commitment and dedication to the organization. In addition, an honest and accepting atmosphere increases productivity and inspires creativity, maximizing the organization’s strength.
Having a willingness to tolerate honest mistakes from employees and allowing them the ability to learn from them garners a fierce loyalty to be unparalleled in the workplace. Another strategy an organizational manager can use to increase the overall health of the workplace culture is to allow their subordinates the freedom to take risks, within appropriate limits. Extremes – reckless, excessive risk-taking and stifling, unwarranted control – threaten organizations, but the freedom to take risks allows creativity.
Empowering employees with the proper authority also saves time and money for the corporation by reducing the amount of employees that need to be involved in every transaction. For example, empowering a front-line Wal-Mart associate to complete return or exchange transactions without management approval can 1) make employees feel more powerful because they can fully complete their job without constantly interrupting members of management; and 2) reducing stress for both associates and managers by removing the necessity for managers to constantly eturn to the return desk. Globalization For an organization to remain competitive in today’s ever evolving environment, it must consistently look for opportunities to grow as a business as well as reduce costs and increase efficiency. By expanding to an international marketplace, corporations expose themselves to an array of reduced labor costs and possibly decreased raw material costs. In addition, a corporation may be subject to lower taxation. All of these diminished costs can increase company profits and maximize return on investment.
Although it may seem like an easy fiscal decision to instantly move into the global marketplace, there are many things executives must take into consideration. Most importantly, the company should be aware of cultural differences and regulatory requirements that may exist in other nations. Without properly weighing these potential complications, the corporation could encounter a disastrous financial outcome. Achieving a harmonious balance between local knowledge and global scale is crucial for international success (Wal-Mart, 2003).
Wal-Mart’s first endeavor into the international market occurred in 1991 when the company introduced its big-box, low-price warehouse to Mexico. Since that time, Wal-Mart International has opened stores in over 15 markets outside the continental United States. According to Wal-Mart. com, Wal-Mart International is the fastest growing division of the Wal-Mart Corporation. Although Wal-Mart International’s website touts its global successes, not all of Wal-Mart’s universal ventures have been lucrative.
For example, when Wal-Mart made its first foray into Europe over a decade ago, the retail giant had no doubts that its formidable record at home would translate to the same highly profitable business abroad. Unfortunately, the American formula for success did not translate in the European market and the chain came across as insensitive and imposing in its acquisition. Lack of proper cultural investigation caused Wal-Mart to spend millions of dollars trying to resuscitate the failing German location until it finally announced it would be closing in March 2006 (Landler, 2006).
References (2003). Is Wal-Mart too powerful? Low prices are great. But Wal-Mart’s dominance creates problems — for suppliers, workers, communities, and even American culture. BusinessWeek. , Retrieved from http://www. businessweek. com/magazine/content/03_40/b3852001_mz001. htm Boyle, Matthew. (2009). Wal-Mart’s painful lessons: Having grown in fits and starts, Wal-mart’s international until has a new game plan. Can it master world markets? BusinessWeek. , Retrieved from http://www. businessweek. com/managing/content/oct2009/ca20091013_227022. tm de Bono, Edward & Heller, Robert. (n. d. ). Thinking Managers. Retrieved from http://www. thinkingmanagers. com/companies/wal-mart. php Landler, Mark. (2006, August 2). Wal-Mart finds that its formula doesn’t fit every culture. The New York Times . Retrieved from http://www. nytimes. com/2006/08/02/business/worldbusiness/02walmart. html? _r=1 Wal-Mart. (2001). Sustainability progress to date 2007-2008. Retrieved from http://walmartstores. com/sites/sustainabilityreport/2007/associatesTrainingBui lding. html