Walmart’s organizational structure plays a significant role in its business success in both the retail industry and the e-commerce market. The same structure imposes limits in the manner the company addresses its problems. Over the years, Walmart’s organizational structure has been central to its implementing its strategic goals and reason behind its success. Due to the massive size of the company, the organizational structure is hierarchical in nature. With over 2 million employees globally, Walmart has different corporate strategies to ensure success. As such, this paper examines the current Walmart’s organizational structure and comparing it with that of competitors’.
Walmart is an American retail giant that operates different chains that include discount stores, grocery stores, and even hypermarkets. It is characterized by a hierarchical structure in filling its hourly, managerial and other executive positions. The hourly workers are the lowest segment that includes cashiers and sales associates. Looking at the corporate culture, its influence has a significant impact on the mindset of the employees. In fact, this has made it easy for the company to adapt the challenges in the international market. Walmart’s organizational structure has been central to maintaining a competitive advantage over companies such as Target and Amazon. Directives coming from the CEO are implemented by the middle-level managers to the low-level employees.
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The main advantage at Walmart is the current organizational structure is the ability of the middle managers to influence change in the entire company (Casadesus-Masanell, Van den Steen, & Elterman, 2018) . When new policies are introduced, they can easily pass down from the headquarters to the store managers in different continents. Through this, it becomes easy to achieve effective monitoring and control. On the other hand, Walmart's organizational structure also has its shortcomings. First, it has minimal support for flexibility in the workplace, which is essential in the company. It becomes difficult for the low-level employees to adjust to new business practices without getting approval from the headquarters.
While Walmart’s organizational structure is hierarchical in nature with limits for flexibility, competitors like Amazon has a highly flexible structure. Amazon has continued to make more profits compared to Walmart and Target because of its corporate structure and culture. It has caused disruption in the online business, which is one of the reasons for being top in the industry. Amazon’s organizational structure has been dynamic over the last few years because of the ever-changing business environment (Warrick, 2017) . Also, they implement a diversified business strategy that requires them to have a flexible organizational structure. While Walmart depends on the CEO to make changes, Amazon has various operational managers that are allowed to make major company decision.
The major advantage of the evolving organizational structure at Amazon is that it allows the company to diversify its business and add more products. In fact, it becomes consistent with the technological foundation of the company. As such, it has been able to withstand the pressure from competitors such as Apple and Walmart. Another advantage of Amazon's organizational structure is managerial control. It becomes easier for different low-level managers to implement new changes in terms of operations or new products.
Walmart's current organizational structure is a reflection of the corporate culture. Just like Amazon, Walmart has tied being consistent strategically with the current culture (Sims, 2018) . With its hierarchical structure, the company believes all their associates have a role to play in driving the business. As such, they have developed a strong structure that aligns with the current business environment. Walmart has built a positive culture that would create a competitive advantage with companies such as Amazon and Target. Also, the company has integrated its culture in the business processes. The senior managers extensively engage in planning to ensure the business goals meet the demand of the industry. Secondly, communicating their culture globally is key for the company’s long-term ambitions. Any business changes are communicated directly to the store managers in various parts of the world. As a result, it makes them adjust to any changes in the market. Thirdly, Walmart conducts its business with a strong emphasis on the daily culture. By integrating culture in the aspects of its business, employees tend to live by them each passing day. As a result, it creates a winning culture whereby the employees strive to achieve the best.
The infrastructure component that can create a culture of innovation at Walmart include geographic divisions, global function-based groups, and improved global management structure. Having global divisions will allow creating business goals that align with the business conditions of the areas ( Goran, LaBerge, & Srinivasan, 2017) . As a result, it also gives the managers in each area to address the concerns at each geographical location. This strategy has been a success in Amazon whereby the economic conditions are taken into consideration when creating goals. This strategy will enable the company to develop a culture of innovation in the different geographic locations.
The second strategy is developing global function-based groups whereby each group is given a function to perform alongside a manager. The primary objective is streamlining operations that align with the structure and culture of the organization. With the current global expansion, this strategy will be useful in promoting innovation. Lastly, the creation of global vertical lines of command in various geographical lines is important. Relying on the headquarters for decisions makes it difficult to come up with decisions that are consistent with the economic conditions of some areas. This will enable low-level managers to encourage innovations that would create a competitive edge in various parts.
The changes I recommend can use the relationship with stakeholders to enhance individual performance, competitive advantage, and operational effectiveness. First, global divisions are important becomes it creates a close relationship between top managers and the low-level employees at the Walmart stores. The direct relationship enables the managers to give incentives and bonuses directly to the employees to boost their morale (Isac & Remes, 2018) . As a result, it increases their performance, which directly affects the business standings of the company. On the same note, global division with top managers on the ground enables the CEO and other executives to get direct feedback on the business environment. It enhances communication that, in turn, makes it easier to make adjustment with changes in the business environment. By creating this flexibility, it boosts the performance of the company.
Secondly, the global function-based based groups create a close relationship with the customers. As such, it makes it easier to get direct feedback from the customers in terms of service and pricing. This allows the company to make changes that would increase sales and even create a competitive advantage over the competitors. The groups can report to the headquarters on the happening in the stores. In a way, it makes it easier to monitor and control, which is crucial for any business.
References
Casadesus-Masanell, R., Van den Steen, E., & Elterman, K. (2018). The Rise and Rise (?) of Walmart (A): Battling Kmart
Goran, J., LaBerge, L., & Srinivasan, R. (2017). Culture for a digital age. McKinsey Quarterly (10) , 1-10.
Isac, F. L., & Remes, E. F. (2018). The Relationship between Culture and Strategy–A Managerial Perspective Approach. Studia Universitatis „Vasile Goldis” Arad–Economics Series , 28 (3), 76-85.
Sims, S. (2018). Acquisitions: Walmart vs Amazon.
Warrick, D. D. (2017). What leaders need to know about organizational culture. Business Horizons , 60 (3), 395-404.
