Introduction
Society today is characterized by dynamic change. Given the speed by which business organizations are moving the market, many companies are therefore forced to keep up with the new changes. This implies that the most successful companies are based on the organizational management to diagnosis, oversee and adapt to change. To ensure that this happens, measures are put in place to overcome the traditional organizational culture to modern culture to survive in the current business tool. Organizational diagnosis and change management, therefore, refers to a systematic activity that prepares an organization for an ongoing change in the business environment. Innovative strategies are applied to deal with the variable and sudden changes. Generally, organization change addresses a large part of the business operation from product development, governance structure, and customer satisfaction. To achieve the organizational changes optimally, it is critical for all members of the organization to work collaboratively to maximize the opportunity. This paper examines the organizational change process of WalmartCompany giving a brief description of the company, factors prompting the change in the organization and the role of the leader in the organization change. Additionally, the Burke-Litwin model will be used to predict the future organization state, while the Kotter’s eight steps will be used to analyze the change process.
Overview
Walmart Company is an American multinational retail corporation that operates retail stores in different countries across the globe. It focuses on making a difference in the lives of its customers by offering quality products and services at lower prices. The company relies heavily on the Every Day Low Price (EDLP) to provide consumers with the best prices as compared to other stores. With the continued rapid growth, the company has been able to operate three segments primarily: Wal-Mart U.S., Wal- Mart International and Sam’s Club. Walmart U.S being the largest segment accounted for approximately70 percent of total sales in the financial year 2015.
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Current Situation
According to Fortune Global List 2014, Walmartis considered as the second largest public corporation. The organization employs approximately over 2.2 million people worldwide and serves over 200 million customers weeklyin 10,000 stores globally.This has been made possible because the organization focuses mainly on two objectives. One of the objectives being providing customers with everything they want at a greater value. Secondly, treating everyone with lots of respect as their input helps in maintaining the success of the organization. With this type of growth, the company is estimated to be worth over $466 billion. Due to the expansion around the world, Walmart is facing a lot of competition from competitors across the world. Primary competitors include Costco, Target, and Kmart. Additionally, small retailers that focus on a small niche market have also been able to compete successfully against Walmart. This, therefore, has resulted in the company to look for other alternatives to compete effectively with other organizations.
Due to the changes in the today’s organizational structure, there has also been the need for the company to change its organizational structure. Walmart has a hierarchical organization structure which imposes limits on how the business addresses its problems. The hierarchical structure involves the vertical line of command where directives come from the top levels to the subordinates ( Gill, 2002) . Though the company can easily influence the entire organization especially, during the making of new policies and strategies, there is minimum flexibility when implementing new changes. This has led to the organization to implementing new changes that will enhance participation and flexibility.
Walmart’s organizational culture is based on four main elements: service to customers, action with integrity, strive for excellence and lastly respect four individuals. Walmart for many years has recognized and prioritized its customers in every aspect. Besides, it strives for excellent performance and excellence from individuals, teams and everyone working in the organization. Virtues such as honesty, fairness, and trust are highly encouraged as they promote integrity in the organization. However, the company needs to undergo a series of changes as it is frequently criticized especially on how it handles its employees’ concerns regarding low wages. The failure has led to the company’s worker moving to other retail corporations hence leaving the organization with unskilled individuals.
Role of the leader of change
A leader plays an essential role in the change process as they are the main actors. Successful organizational change depends on how the leader can execute change in their span of influence. The company’s leaders played the role of the enforcer ensuring that the employees were held accountable for the change. This is by making sure that all the set procedures for organizational changes were carefully followed. Also, they ensured that all obstacles that were likely to affect the implementation of the new changes were removed. Research shows that effective leaders recognize that change cannot happen or be successful unless they fulfill the role of enforcing and authority ( Ajmal, Farooq, Sajid& Awan, 2012).
Walmart leaders also provided the needed motivation in the change process. They did it by showing all the employees how the change would impact their career, especially regarding growth. They also demonstrated commitment by providing the needed support, resources and the passion about getting things done. Successful leaders recognize that change is difficult and tricky hence the need to motivate everyone in the organization for them to step out of their comfort zones.
Ajmal et al. (2012), assert that good leaders also recognize that they must be willing to change first for their employees to follow. This is by demonstrating behaviors and attitudes that are required for everyone in the organization. Walmart leaders first ensured that there was a complete overhaul of the employees’ remuneration and working conditions. On the other hand, the employees did their part by improving their performance and working hard towards achieving the company’s vision. According to Ajmal et al. (2012), employees in most cases watch how their leaders are consistent in their words and actions for them to believe about a real change in the organization.
As also managers, Walmart leaders in every department and stores control the resources allocated to them by the organization. This means that they can make the decision that can either affect the change initiative negatively or positively. During the change process, the leaders ensured that they set the right priorities that supported the change.
Burke-Litwin Model
The model was developed to examine organizational change and performance. It has essential elements that provide linkage between the organizational context and processes of change within an organization ( Spangenberg & Theron, 2013). These essential elements include organizational leadership, leadership structure, task requirements, employee motivation, and individuals’ needs and values.
Changes in strategy often lead to changes especially in the way the organization is structured. Walmart organizational structure was entirely hierarchical implying that authority is top to down. Due to the changes that are bound to happen, the organization is likely to have a function based organizational structure. This type of organizational structure involves employees working at different levels and fulfilling a certain function. The employees work in teams and mostly communicate with managers assigned to them as compared to those at the highest authority. New policies and directives will be passed to them through their managers ensuring effective monitoring hence better performance. The lengthy communication strategies will also enhance flexibility.
The leadership aspect considers mostly the attitudes and behaviors of senior individuals and how their behaviors are perceived by the organization as a whole ( Spangenberg & Theron, 2013). After the change, the leaders will highly become resilient in the face of adversity. Organizational changes are not easy to implement as they are faced with lots of resistance internally and externally. Moreover, the leaders will also become consistent and efficient in implementing long- term policies and changes due to the experience acquired in developing the Walmart vision.
Organization culture considers at the beliefs, behaviors, and conventions that guide an organization. Culture change takes some time before it becomes part of the organization. After the implementation of the new changes, the organization will have a culture that incorporates the beliefs that are ideal for the organization. This includes treating their employees’ right, fulfilling their obligations as the employers. Lastly, the changes will ensure that adequate measures are implemented that fulfill respect for individuals as part of the main component of the organizational culture.
Employee motivation looks at the significance of individual to fulfill the organization obligation. When a particular change is not received correctly, implementation can be difficult to the extent of affecting the performance of the organization ( Gill, 2002) . In the company, the employees are likely to attain high levels of motivation as measures to maximize productivity were affected. These included training programs and performance evaluation measures that would help them acquire skills and abilities required to fulfill their work.
Work unit climate looks at the perception of the employees on their immediate colleagues as well as the working environment. The immediate environment plays an essential role as it determines how employees take their work and the level of fulfillment they experience. In managing the new change, the leadership of the organization ensured that the working environment was not drastically changed as it would invoke a range of emotions and political responses from the staff.
Kotter’s Process of Change
John Kotter, leadership and a change management expert came up with a change model to combat to what he believed were the main reasons behind the unsuccessful organizational change ( Appelbaum, Habashy, Malo, & Shafiq, 2012). His change model focuses on leading the process of change rather than managing it. He believes that the upper top management in the organization should be key players in leading organizational change- as the leaders are the one who makes critical decisions. The employees, on the other hand, should be involved in implementing the change, as without support from everyone in the organization the change process can be extremely difficult or slow ( Appelbaum, et al., 2012). Kotter, therefore, gave eight steps that organizational leaders can use for a successful change.
STEP 1: Establishing a sense of urgency for change.
The first step of change is explaining to the employees as to why the change is needed urgently. Moving towards a particular type of organizational management structure and cultures does not necessarily mean that the other methods of governance should be abandoned. Establishing a sense of urgency implies that leaders understand the step they are taking and its impact in the organization. The leadership in Walmart recognized there was a need to make necessary changes in the management after many complain from their employees. They examined various factors, and they are sure that the change will have a positive impact on the organization.
STEP 2: Creating the guiding coalition.
This entails assembling a dominant team that can lead the process of change in a satisfactory manner. In this case, a governing coalition was formed which comprised of the Walmart management team and was also supplemented by other two external managers. Despite the governance structure being hierarchical, the guiding coalition team was open to the changes, and everyone was involved in the decision-making process. This enabled the organization to develop the right vision and eliminate all the key obstacles that were bound to happen due to lack of inclusivity. The team has therefore tabled a report why the organization needed to change its former organization culture to a culture that ensured that the employees were well remunerated. Kotterasserts that constructing the right guiding coalition team and then combining trust with a shared goal ensures that the right changes happen despite all the forces to resist the move.
STEP 3: Developing a clear vision
A clear vision of every organization is paramount as it ensures that detailed decisions are simplified, motivates people and coordinates all towards taking the right direction. In most cases, organizations visions are deceptively mundane taking a larger part of strategies and plans of the organization. However, a short vision that holds a lot of things together in the organization makes sense to the employees when working. In implementing the change, Walmart came up with a vision statement “To be the best retailer in the hearts and minds of consumers and employees." The vision was not only feasible but also provided the real guidance in implementing the change.
STEP 4: Communicating the Vision for Buy-in.
In complex organizations such as Walmart, gaining understanding and commitment towards a new direction is not always an easy task. In most cases, under communication and wrong perception of the message is always rampant. Companies use memos and a series of meeting to communicate the vision which might not be effective. In communicating its new vision to its employees, the organization ensured that the message was simple, clear and invitational. The employees were given the opportunity to talk to the managers in case ofany misunderstanding.
STEP 5: Empowering Broad-Based Action.
In implementing organizational change, removing as many barriers as possible help are imperative. In Walmart Company, internal structures were the reasons as to why the company was not able to focus more on the plight of the employees. Removing the hierarchical approach to function based played an essential role in the organization as it was able to focus on realigning the incentives of its employees and performance appraisals. On managing information, Walmart maximized on this strategy by ensuring that the right information tools that ensure feedback are installed.
STEP 6: Generating Short -term wins
Foran organization to create long-term solutions, short term wins are often very significant Failure to create may negatively affect the organization. The Walmart Company guiding coalition identified significant improvements in its organizational culture and structure. This helped in ensuring that the overall change initiatives were successful. Short term wins included raising the employees’ wages and creating an organizational structure that would enhance members’ participation. Short term wins also play a significant role in undermining the credibility of individuals involved in resistance moves.
STEP 7: Don’t Let Up
Kotter argues that many change projects fail as the leaders do not consolidate the real gains that are likely to produce more change. He further asserts despite the necessary measures taken, and resistance can reassert itself reverting the efforts. Walmart Company, therefore, reinvigorated the process of the new change by building on projects on training and performance management of the employees to ensure efficient implementation of the vision.
STEP 8: Make Change Stick
Anchoring new approaches in the culture of the organization are essential for sustained growth. This means that any new practices that are introduced in an organization, they must be implemented with a lot of emphases for them to be planted in the culture of the organization ( Appelbaum et al., 2012). Culture refers to how individuals behave including their shared values. The culture of offering incentives to the employees was indoctrinated into the organization’s culture. This new behavior is still upheld in the organization as it ensured leadership development and succession.
Perspective of the change process
Walmart organization is one of the most complex organizations, not only because of its size but because of its nature regarding the products and services it deals. This means that that the organization requires higher levels if coordination among its employees, business units, and the general management of a successful change process. Affecting the new changes was not easy as it faced a lot of resistance from the employees who thought the management was not genuine. The implementation also required a change in the organizational behavior which sometimes takes for proper realignment hence delaying the process of change. However, the company was able to realign its policies and realities hence ensuring successful organization change. It was able to improve its competition by branding its products well, offering better customer’s services and improving the working conditions of their employees. Linking its employees to the organization change strategic management enhanced proper decision making, alignment of the change to the vision as well as synergy from everyone.
Walmart organization change was able to revolutionize on how structures are shaped regarding governance, the organization culture and most importantly the manner of working therein. This entails the transition from hierarchical to function based organization was becoming evident. The organization was able to work through teams hence obtaining a sustainable competitive. At the core, new systems also ensured that the employees’ performance also improved. The organizational leadership also ensured that the process of transition was successful by facilitating the real change, empowering and motivating the employees, taking responsibility for tasks and lastly creating a clear vision for the organization.
In conclusion, change management in an organization is often not an easy process but can be managed with effective leadership. Walmart did not make a lot of changes, but the changes were remarkable to the extent of improving its performance. The Kotter’s process of change acted as a guiding coalition in facilitating the change which undoubtedly contributed to the success so far. Good timing is always critical in implementing change and also in building the momentum.
References
Ajmal, S., Farooq, M. Z., Sajid, N., &Awan, S. (2012). The role of leadership in change management process. Abasyn University Journal of Social Sciences , 5 (2), 111-124.
Appelbaum, S. H., Habashy, S., Malo, J. L., &Shafiq, H. (2012). Back to the future: revisiting Kotter's 1996 change model. Journal of Management Development , 31 (8), 764-782.
Gill, R. (2002). Change management--or change leadership?. Journal of change management , 3 (4), 307-318.
Spangenberg, H., &Theron, C. (2013).A critical review of the Burke-Litwin model of leadership, change and performance. Management Dynamics: Journal of the Southern African Institute for Management Scientists , 22 (2), 29-48.
