Walmart's Organizational Design, Development, and Performance

Organization Summary 

Walmart Incorporated is an American retail company that started as a single discount store and has grown over the last fifty years into one of the world's largest retailers. Founded in 1962 and headquartered in Bentonville, Arkansas, Walmart operates a chain of hypermarkets, grocery stores, and discount stores. The multinational company operates in different countries in the world under different names, with more than eleven thousand stores in over twenty countries. It operates as Walmart in the United States, as Asda in England, as Walmart de México y Centroamérica in Mexico, as Best Price in India, and as Seiyu Group in Japan. Additionally, the organization operates in other counties such as South Africa, Chile, Canada, and Argentina. It employs over two million associates from different parts of the world. 

Walmart Incorporated sells a variety of products, which include clothing, jewelry, cell phones, books, electronics, household essentials, sports, and office equipment. Additionally, the company offers services such as product promotions, product personalization, express money services, healthcare services through Walmart Health as well as home services such as tech setup and installations. Walmart offers its products and services based on customer lifestyle, demographics, life stage, as well as their geographical locations. The products and services they offer in the countries they have establishments factor in ethnicity. Customers can shop either online, through mobile applications, or physically at their numerous stores. 

Walmart encounters stiff competition in the United States as well as in the international markets. Some of the main competitors of Walmart are some global organizations such as Amazon, eBay, Costco, Alibaba, IKEA, Home Depot, and Lowe's. They offer similar products and services that will target the same markets as Walmart. 

Organizational Structures 

Organizational structure outlines the design and the means of the administration of a given company. It dictates how to divide labor, helps in achieving goals, how activities are carried out, and how decisions are made (Santos, 2014). Different organizations use different structures that depend on given factors. Two of the most common structures among organizations include the functional structure and the divisional structure. 

Functional Structure 

The functional structure, also known as the Professional Bureaucracy, emphasizes the professional skills of the employees. The primary mechanism of coordination involves the standardization of skills, and the placement of high value on autonomy (Steiger, 2013 p.59). There exist minimal centralization, and only the individuals in the operating core take part in the decision-making processes. In a functional structure, an organization is usually divided into smaller groups, in which each group has specific tasks and roles assigned to it. The activities and the employees are organized separately into units with particular functions such as research and development unit, sales unit, operations unit, finance unit, or areas of expertise (Lee, Kozlenkova, & Palmatier, 2015 p.75). Each unit has a managerial position or a director who oversees its overall tasks and then answers to the executive who is a level above them and oversees more than several departments. For instance, a director of the marketing unit supervises the financial unit and then answers to the vice president who manages the marketing, Information Technology, and finance units. 

Advantages of the Functional Structure 

The functional structure facilitates efficiency, distinctive abilities, autonomy, specialization, skillset, and functions group employees, so they focus on carrying out their mandate as a department (Lee, Kozlenkova, & Palmatier, 2015 p.75). The distinctive abilities and specialization result from the experience that employees gain from repeatedly working in their area of specialization. High levels of autonomy allow workers to be independent but closer to the clients and customers, thereby facilitating the effectiveness of the firm. Additionally, the high levels of independence enable the employees to think freely and be able to take risks, which leads to new ideas and innovations that improve the general operations of the company. 

Limitations of the Functional Structure 

It is characterized by a lack of sufficient communication among the departments, which may lead to a longer time being taken to achieve the objectives of the organization. Additionally, most issues and discussions take place at the managerial levels without including those at the lower levels who deal directly either with clients or in the manufacturing process. It may also create conflicts across the functions. Furthermore, pairing groups by job function may cause employees to develop tunnel vision, in which they would see the organization strictly through their job function. The autonomy enjoyed under the functional structure may, to some extent, lead to misuse of discretion. Steiger (2013 p.60) further states that the functional structure can lead to a political environment, thus leading to internal conflicts among individuals. The structure may also excessively restrict individuals to their skillset and specialization, which may lead to inflexibility by both the employees and the particular organization. 

The Divisional Structure 

In the divisional structure, firms are subdivided into smaller and separate units, and each one of them performs several functions (Lee, Kozlenkova, & Palmatier, 2015 p.75). Each division has its independence. The structure is common in organizations that operate across many horizontal goals or objectives. Steiger (2013 p. 58) states that the prime coordination mechanism of a divisional structure is the standardization of its outputs, in which the middle line is identified as the crucial part of the organization. The functional structure demonstrates high levels of standardization and formalization. However, autonomy and indoctrination are low (Steiger, 2013, p. 58). 

Additionally, the structure puts more emphasis on divisionalization as opposed to decentralization. Control within the organization Each division works primarily as its own company, which controls its resources, finance, and its expenditure on specific projects and aspects. The divisions may be market-based or based on the geographical location of the organization. Some of the market-based divisions may be health unit, grocery unit, jewelry unit, electronics division, among others. Divisions based on location may include the names given to the established branches in other countries. Walmart, for example, operates as Walmart in the United States, as Asda in England, as Walmart de México y Centroamérica in Mexico, as Best Price in India and as Seiyu Group in Japan. 

Advantage of the Divisional Structure 

One of the benefits that organizations that apply divisional structures have is that the divisions stand alone. Therefore, they tend to be more responsive and more adaptive to changes in the market quickly as compared to those with the functional structures (Lee, Kozlenkova, & Palmatier, 2015, p.75). Divisional structure enjoys the strategic invulnerability advantage (Steiger, 2013, p. 58). It helps in reducing risk at the global level. Additionally, it protects the whole organization from unique hazards that individual units may encounter. They also enable efficient allocation of financial resources. 

Limitations of the Divisional Structure 

A few barriers exist in the divisional structure. First, it may lead to duplication of the administrative and staff roles and higher costs. Secondly, fragmentation of knowledge management practices may occur (Steiger 2013 p. 59). 

In conclusion, the divisional structure is most suitable for Walmart Incorporated because it is a multinational company and offers a variety of products and services, some of which are not related. The structure works best for market diversity and in multiple locations. 

How Factors in the External Environment Affect Walmart Incorporated 

Like every other organization, Walmart is affected by some external factors. The factors can either be in the immediate environment of the organization (micro) or macro-environment, which either create opportunities or pose threats to businesses, such as Walmart. Microenvironmental factors include competitors, customers, suppliers, and marketing intermediaries. Macro environmental elements include sociocultural factors, political factors, economic factors, technological factors, ecological factors, and legal issues. 

Micro Environmental Factors 

Suppliers 

Suppliers affect how businesses operate. Reliable suppliers of products that Walmart sells, such as groceries, clothing, and jewelry, contribute to the smooth operations of the grocery stores and other goods that the company sells online. Walmart can be compelled to maintain high inventories leading to cost increased when there exists uncertainty in the supply of goods. 

Competitors 

Competitors include those firms that operate the same businesses and Walmart as well as those that compete for the customer's discretionary income. Competitors such as Amazon and Alibaba compete for the attention of the customers who are also targeted by Walmart. Theoretically, customers are wooed by good public relations, quality goods, and services as well as after-sales services (International Business, p 14). Therefore, if a competitor provides such services in a better and cheaper way, then Walmart loses its customers. 

Marketing Intermediaries 

Marketing intermediaries include firms through which the company promotes, sells, and distribute their goods to the final buyer. They include agents and merchants, marketing service agencies such as marketing research firms, advertising agencies, and consulting firms. In case Walmart faces a disturbance of the link or chooses the wrong intermediaries, it would be costly. Poor intermediary services mean the customers fail to get appropriate product information. Transportation of groceries may also be delayed, and should consulting firms give uninformed advice, it would devastate Walmart. 

Macro Environment 

Economic Environment 

The economic environment includes the economic conditions, policies, and systems that affect the operations of businesses. During the decision-making process on expansion to new areas, Walmart factors in the type of the economy. The stage of the development of the economy, the available resources, the level, and the distribution of income must also be considered. The factors must be factored in since low incomes may lead to low demands for particular products, for instance, jewelry sold by Walmart. An increase in revenue increases the sale of a product whose demand is income-elastic. Therefore. the company may be forced to reduce the prices of particular goods to increase their sales. Walmart would not be able to increase the purchasing power of the customers to generate a high demand for the commodity (International Business, p. 17). Such decisions may be costly but the better alternative, especially for perishable products to avoid complete losses. Therefore, Walmart can relocate due to unfavorable economic conditions or fail to expand because of the same. 

The economic policies put by governments may also affect businesses. For instance, a restrictive import policy or that which seeks to protect home industries can affect Walmart. It becomes worse when the goods they sell are supplied from abroad, or want to send surplus goods to other locations like India. Furthermore, the economic systems of the countries where Walmart has its divisions play an essential role in the progress of the branches. Most countries where Walmart operates have market economies that favor its operations. The theoretical assumptions of the market economies, according to International Business (p. 19), including privately owned factors of production. Members have freedom of choice of goods to consume and are non-government regulated. They favor business, which explains why Walmart operates mostly in the market economy. Fast-growing economies have increasing demands of retailers like Wal-Mart hence provide opportunities. 

Political Environment and Legal Issues 

Walmart considers political factors, especially the ones regarding government policies. Theoretically, high political stability and support for globalization provide opportunities for business. On the other hand, political pressure for high wages a threat. Knorr, Andreas, and Andreas (2003. p. 17) state that Germany had some restrictions on retailers' pricing, which contributed to the failure of Walmart in the country. For example, in Germany, retailers are forbidden to sell goods below cost permanently. Still in Germany, Wal-Mart was accused of breaching several laws and was fined. 

Sociocultural Factors 

Sociocultural factors influence the preferences and perceptions of customers. Ignoring the preferences, customs, taboos, and tastes can be costly during the formulation of strategies. Healthy lifestyle trends, cultural diversity trends, as well as migrations to urban areas, create more opportunities. Only a business that is appropriate in the socioeconomic environment can prosper. Although people from different cultures may consume the same goods, the mode of consumption, perception of the product, and the purpose of use may differ (Arbidane and Volkova 2012, p. 10). 

Technological Factors 

Technologies affect Wal-Mart's competitive landscape. For example, increased mobile usage among customers pushes the company to improve its online presence since online marketing and selling earn more income. Technological developments increase the demands of particular existing electronic gadgets. 

Ecological Factors 

Ecological factors mainly deal with environmental conservation, which has become a famous principle in every enterprise. Wal-Mart has to be selling environmentally friendly products. Furthermore, differences in the geographical conditions between markets may necessitate changes in the marketing mix. Topological factors often affect the patterns of demand. Seasonal diseases, for instance, require medical care in certain regions during specific periods. Therefore, the health division of Wal-Mart finds such places conducive only during particular seasons. 

The Benefits of Applying a Humanistic Approach to Organizational Development in Wal-Mart Incorporated 

Humanistic approaches stress on understanding human behavior, their needs, and attitude at workplaces to foster the dignity of the employees. The understanding is then applied in developing the enterprise to improve its efficiency and quick achievement of objectives. A multinational business firm such as Wal-Mart would enjoy several benefits when it uses the humanistic approaches. The advantages include enhanced productivity, secure, and faster achievement of goals and objectives. Additionally, it increases there retention of employees, helps the management in understanding the dynamism of human nature and needs, and also boosts the relationship of the business and the surrounding community through corporate social responsibility. 

Enhancing Productivity 

The humanistic approach identifies the needs of the employees and solves them so that the employees can be relaxed and work comfortably at their pace. According to Maslow's theory of needs, an employee would achieve his or her full potential when all his needs are satisfied. When they reach their potential, employees become productive the most, which reflects in the overall productivity of the organization. For example, the provision of basic needs such as good food and water and a conducive working environment in terms of better set up and good machines improve the productivity of employees. It brings more autonomy at work, which enables employees to exercise their liberty (Arnaud and Wasieleski, 2014, p. 324). Additionally, humanistic approaches lead to high involvement, coordination, and commitment among staff, which enhances productivity. 

Easy and faster Achievement of Organizational Goals 

Improved productivity of staff increases the overall rate by which the set goals of the organization are achieved. Arnaud and Wasieleski (2014, p. 326) denote that the application of the humanistic approach has several outcomes. They include self-determination, high levels of intrinsic motivation, improved work performance, trust, and loyalty to the organization. Moreover, self-regulated motivation enhances creativity, flexibility, and task involvement. 

Consequently, the business goals of Wal-Mart would be realized faster under the humanistic approach. Workers put in all their effort as they know it would be recognized and because they are motivated. Additionally, collaborations and high commitments among staff generally improve the efficiency of every organization. 

Retention of Employees 

The application of humanistic approaches in organizational development gives employees the feeling of being valued by their employers. The humanistic conception promotes the well-being and accomplishment of employees in the process of realizing the objectives of the company (Arnaud and Wasieleski, 2014, p. 325). Consequently, when employees are involved in decision making, their opinions listened to and their well-being catered for, they opt not to look for better opportunities. Therefore, hard-working and productive employees will remain committed to serving the organization. Retaining experienced, hard-working, and productive employees would help Wal-Mart to compete with other competitors in the retail industry effectively. 

Improving the relationship of the enterprise to the surrounding community and authorities 

Organizational development would pose facilitated by a conducive environment brought about by proper performance in terms of corporate social responsibility. Melo (2012 p. 35) states that 

"A firm that displays a humanistic approach to culture transmits to its members and society, the notion that its mission is aligned with the individual mission of its workforce. It performs following the values and beliefs of its members." 

Consequently, the external environment will be improved, which then leads to the development of the organization. Wal-Mart, being a multinational company, would benefit from humanistic approaches since they would be complying with the regulations as required while treating the labor-force, members of the host countries with dignity. Consequently, they would be operating with minimal negative external forces and would benefit their businesses. 

Quality decisions 

Humanistic approaches provide an opportunity for employees to air their views, which are incorporated in making decisions. Putting more heads together creates more viewpoints on a particular aspect that would be affecting the retailer. Since employees interact closer to customers than the managers, they may provide better alternatives in approaching cases such as complaints from customers and how to deal with them. Furthermore, employees may have a better understanding of the preferences of customers primarily in the divisions of Wal-mart that operate overseas, such as in India and Japan. Most of the employees are from the communities around and may have a better understanding of the preference of customers. Therefore, Wal-mart benefits from humanistic approaches when employees participate in decision making. 

High competitiveness in the Marketing 

Humanistic approaches lead to retainment of quality employees and quality decision making. Consequently, the services Wal-mart would be offering would be of high quality and up to standard and can result in an increase in demand. The more effective Walmart would become, the more it would become competitive. 

How Walmart can Measure the Success of a Change Initiative 

The success of a change initiative can be measured through the whole process, from designing the solution to the point the desired change is realized. A change initiative is bound to fail if the initial diagnosis stage occurs inappropriately. Indicators of success at the diagnosis and solution design stage include ensuring the organization has the capacity and readiness for change and that there is goal clarity of the change initiative. In a case where there a change initiative gets rolling, yet there are limited resources to see it through within the company, then it would most definitely be a failure. Therefore, Walmart can evaluate the resources it has against the potential amount required to run the change, and a balance shall have provided the initial indication of the success of the initiative. The step also incorporates having a deep insight into the design choices concerning their suitability of the organization. How well the design is aligned to the business strategy determines how well it fits the culture of Wal-Mart. 

The next step in a change initiative involves measuring implementation, which requires planning and resourcing. Assessing how well a change strategy has occurred is facilitated by tracking the metrics that measure implementation success. During this stage, success would be indicated by the levels of commitment and oversight of the sponsors of the change, quality of the plan in terms of completeness, comprehensiveness and achieve-ability, clear accountability, and resource staffing as per the initiative's requirements. An incomplete and less comprehensive change initiative would fail even if there are enough resources to support it. 

Additionally, during the execution of the initiative, success can be determined through various indicators. Firstly, a plan that falls within its scope has a higher chance of success. Secondly, a project that runs within the stipulated time, and falls within the budget would most definitely succeed. The awareness, support, and understanding that the process receives from the employees can also measure success. If the plan goes overboard, it most definitely will consume more time and resources. A situation in which Walmart lacks resources to spare and add into the process but instead struggle to achieve the change using the overstretched resources initially allocated, then upon its completion, the initiative may not work as had been planned. 

At the end of the initiative, Wal-mart can determine the success or failure through the analysis of the behavioral aspects of employees and stakeholders. Theoretically, a successful change initiative results in changes in the thinking and behavior of the staff. Evidence of success can be seen when the number of new proposals generated increases and increased employee engagement. To measure the success of the change initiative they implemented, the management at Wal-mart out to look at the speed of adoption of the initiative. The rate of adoption of the change is a determinant of its success. Every employee easily adopts a successful change since they would not be straining under the new changes. 

Additionally, Wal-mart can measure the success of its change initiative through the analysis of how the change affects the actual outcome of the business. Such changes include improvement in sales, productivity, improved process quality for Wal-Mart's divisions that offer services such as health. Additionally, reduced cost, efficiency, and improved sales and customer satisfaction would indicate success. 

Improved sales indicate the success of change initiatives such as in advertising, and those done to improve quality services. If the resulting number of transactions in a particular period after the adoption of the change initiative becomes more than before, it indicates success. Reduction in cost can be evident if changes are implemented in sectors such as transportation. If the cost of transport of products from the manufacturers to the retail shops decrease, then it would be a sign that the change initiative was a success. 

The utilization and proficiency of the change can also measure its success. The number of people in the retail industry who utilize the change determines its success. How well Wal-mart's workers use the change can also measure its success. Therefore, it would be upon the management to communicate with the supervisors to see how effective the change gets implemented by the employees. 

In conclusion, a change strategy becomes successful only if the intended changes are evident at the end when everyone smoothly adopts it and uses it proficiently. Depending on the given sector where the difference was supposed to occur, positive results would mean that the plan was a success. If the status quo remains, then obviously, the plan shall have failed. 

The Communication Methods Applicable in Communicating a Change Process to Various Stakeholder Groups at Wal-Mart Incorporated 

There exist a significant link between communication and organizational change. Therefore, if Wal-Mart needs to communicate a change process, there are needs for effective communication with various stakeholders and, most importantly, its employees. Improper communication with employees about a change process often results in increased resistance to change and low morale (Portillo, 2012, p. 3). Therefore, it is crucial that Wal-Mart effectively communicates the change process to all stakeholders to get their feedback after knowing how the change will affect them. 

During the process of communicating a change process, the message goes to different stakeholders, some of whom may be senior leadership groups, senior executives, managers, supervisors, employees, divisions, clients, suppliers, community partners, and regulatory bodies. Furthermore, people absorb information differently, and so it is better to use more than one method to over-communicate and maximize impact. Different ways of communication exist, such as face-to-face meetings, written means or print, and electronic media. In the case of Wal-Mart, the methods that would convey the change initiative exhaustively are print media, face-to-face communication, electronic media, and telephone calls. All the methods can be used together or at least combining two to achieve effective communication. 

Portillo (2012, p. 32) states that communicating a change initiative should apply every possible method or channel of communication. He says that a single memo or email is not enough but should be done repeatedly anywhere and everywhere through numerous emails, during meetings, as well as through media. Wal-Mart operates in multiple places, which would make face-to-face communication impossible. Face-to-face is one of the most effective methods of communicating a change initiative as it provides immediate feedback in terms of how the initiative is received. Therefore, to deal with the place barrier, Wal-Mart can improvise and use video conferencing if the change intends to affect the divisions overseas. The benefits that Wal-Mart could enjoy from using the face to face method include obtaining immediate feedback on the reception of the initiative by all the stakeholders. At the same time, employees become inspired and their learning enhanced (Portillo, 2012 p. 32) 

According to Kotter’s theoretical model of communicating vision, he recommends every single channel possible (Portillo, 2012 p. 32). Therefore, a single method, such as memos, would be insufficient. In Wal-Mart's case, incorporating print media, for example, along with face-to-face communication, can be useful. Printed communication can be distributed quickly to the employees in several locations and provides the mechanisms for future references and evidence that communication did take place. Additionally, electronic media is fast and timely and can be enhanced through the addition of visuals (Beatty, 2015, p. 13). The idea is that Wal-Mart, being a multinational company, may not communicate change initiatives effectively through one or two methods but rather incorporating several of such practices. 

Transformational change theory proposes an effective method of communication that Wal-Mart can apply when it tends to communicate initiatives of change sufficiently. The method involves the use of authentic narratives, where managers interact with employees and other stakeholders, ask open-ended questions, communicate horizontally, and accommodate suggestions. The method would be effective in a particular unit of Wal-Mart in the United States, which intends to bring about a change that would not necessarily have to be adopted by every division. The expected achievement by the method is to ensure two-way communication. Two-Way communication gives much-needed feedback from relevant stakeholders such as suppliers, customers, and the workers of Wal-mart. Therefore, should there be signs of the initiative not being embraced, necessary amendments would have to be done before resources are committed. 

Portillo (2012, p. 37) mentions the tailored live theoretical model of communication applicable at Wal-Mart. In tailored love communication, Wal-Mart's senior managers communicate the change initiative using broad communication to the organization entirely. The middle management personnel further receive communication through interactions with senior management. The middle management then communicates with the supervisors to ensure concerns are looked into and the initiative understood. The supervisors then transmit the information the non-management employees face to face to provide complete understanding. 

Conclusively, the most appropriate method through which Wal-mart can effectively communicate its change strategies would involve a combination of the mentioned methods. One particular approach would have limitations that can be sorted out by another. However, in any combination, face-to-face methods should be incorporated in any way possible since it often is the most effective. 

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