Organisational Analysis Essay on Wal-Mart

Published: 2021-08-11 19:14:36
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University of California, Santa Barbara
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Case study
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The growth and development of a company are centered on a number of factors such as addressing competition and organizational processes effectiveness. With technology being a major trend in the competitive corporate sector, industries are prompted to employ innovative strategies such as those of effective management, workforce training, and using the internet to market the products and services. Some of the advanced models developed in this regard include profound leadership and management traits as informed by theories such as transactional and transformational and the use of marketing strategies such as 4P which stand for product, people, placement, and pricing. This paper evaluates the case study of Wal-Mart stores in 2003 by considering its transformational journey since its inception to being considered among the leading retailing industries.

Summary

In 2003, Wal-Mart posted an increase of 9% in its net income as compared to the previous year to become the largest global company. It was then the leading employer with more than 1.4 million employees. Its net income and profit came from a large market share of 82% (Ghemawat, Mark, & Bradley, 2004). However, as noted by Lee Scott who was then the CEO of the company, there were several challenges that would prevent Wal-Marts founder from loving the organizations. Two of the main aspects in this regard included not understanding whether the organizational managers were treating stakeholders well and the high expenses yet the competitors had better services. The transformational journey of Wal-Mart dates back in the discount retailing period in the US where the operators sold their merchandise in stuffed stores that were characterized as sparse and furnished. Target, Kmart, and Wal-Mart were among the leading discount retailers in 2003 which had begun in the mid-20th century. Throughout the century, some of the innovations and advancements were the introduction of new types of retailers including the hypermarkets in the 1980s and supercenters.

The greatest growth of Wal-Mart was manifested when the company was under Sam Walton as the primary founder who embraced among other things training and implementation of technologically advanced systems. In the 1970s, Wal-Mart pushed for the integration of technologically advanced systems that included IT in the automated distribution process (Ghemawat, Mark, & Bradley, 2004). Another IT related application that was relevant to the organization was the satellite network. Other approaches to enhance the operations of the organization included imitation and adoption of other companys strategies to understand their competitive advantage approaches. Walton further aimed at enhancing the relationship between the organization and the employees through approaches such as offering them a high compensation. This purposed to improve the motivation of these employees. As a major leader in the organization, Walton was totally absorbed in the organization until he was required to cut his workload to the organization. Under the leadership of David Glass as the CEO after Walton, Wal-Mart continued its growth to realize more profits.

Wal-Marts growth was also centered on its processes and activities. Considering the retailing formats, they included discount stores, supercenter, and neighborhood market. These retailing formats were distinguished by a number of factors including size and specific activities. The use of the internet was initiated in 2000 which generated approximately 100 million dollars and enhanced the organizational access to customers of a higher income (Ghemawat, Mark, & Bradley, 2004). The procurement process transformed from going to the buying trips by the managers to bypassing the manufacturers representatives. Some of the changes as implemented by Wal-Mart included electronic data interchange (EDI) that allowed for efficient communication with the different stakeholders including the suppliers. The EDI also assisted in planning, forecasting, replenishing and shipment of the required materials. In the distribution aspect, Wal-Mart by 2003 had built a network of highly invested centers through automation and the 24-hours operations. In the marketing and merchandising aspect, some of the concepts allowing Wal-Marts growth included product assortment and pricing. The company also invested in advertising to improve awareness of its products. Through effective management and implementation of technologically advanced systems, the future of Wal-Mart was anticipated to be better through more net income and profits.

Analysis

Wal-Marts growth and overcoming the main obstacles of competition from other organizations and especially the new entrants to become a leading retailer was based on several aspects that reflect on what organizations should focus on to ensure competitive advantage. Among these aspects as demonstrate in the case study included integration of technology in the companys activities such as marketing and production. As suggested by Ahmad, Bosua, & Scheepers (2014), technology enhances the business strategies and processes through the development of efficient and fast models. These technologies also reduce bottlenecks in the production process while decreasing losses in terms of time and materials. Globally, one of the main organizational trends is the use of the internet in the company processes and activities and in particular advertisement. In the financial and procurement activities, the use of information technology plays a major role in reducing errors and ensuring efficiency (Anderson, 2016). Wal-Mart also demonstrates the importance of effective management in organizational success. This effectiveness is described by aspects of critical thinking, enhancing the relationship between the organization and employees, and implementing of innovative strategies that are informed by imitation and adoption from other organizations. This ensures the organization achieves a competitive advantage as reflected in Wal-Marts case.

In summary, a number of factors characterize the success of an organization which is reflected by high net returns and profits. These elements include implementation of technologically advanced systems, profound leadership and management, and a strong organizational culture. These aspects are reflected in the Wal-Mart case study as analyzed above where it was considered the best retailer in 2003 and characterized by major growth. Under effective leadership, Wal-Mart transformed throughout the 20th century since its inception through the implementation of technology and innovative strategies in its processes and a well-established relationship between the organization and the employees. This reflects on some of the current organizational approaches to achieve competitive advantage.

References

Ahmad, A., Bosua, R., & Scheepers, R. (2014). Protecting organizational competitive advantage: A knowledge leakage perspective. Computers & Security, 42, 27-39.

Anderson, D. L. (2016). Organization development: The process of leading organizational change. Sage Publications.

Ghemawat, P., Mark, K. A., & Bradley, S. P. (2004). Wal-Mart stores in 2003. Harvard Business School.

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