ASSIGNMENT TOPIC

The objective of this case study is to enhance course participants’ understanding in the areas of management: planning, organizing, leading and controlling of an organization. You may select your choice of organization to be analyzed.

a. Introduce the background of the selected organization.

b. Select FOUR (4) theories learnt in the class and explain how these theories applied in

the selected organization.

c. Identify THREE (3) problems which relate to the management areas of the selected organization.

d. Provide THREE (3) suggestions to the problems identified for better performance in the organization.

e. Conclusion

Management

Table of Contents

Introduction. 3

Company Overview.. 4

Theories. 5

Management and Management Theory evolution. 5

Globalization and the global environments. 7

Planning and Decision-making. 9

Structure and Strategy. 10

Intensive Strategies of Walmart 11

Generic Strategies of Walmart 12

Problems identified. 12

1.     Problems related to management 12

2.     Problems related to decision making and planning. 14

3.     Problems related to strategy and structure. 15

Suggestions and recommendations. 16

1.     Global expansion can effectively address the problem of market competition. 16

2.     Strategies to increase employee satisfaction. 17

3.     Strategies to improve customer satisfaction. 18

Conclusion. 19

References. 20

Introduction

Wal-Mart is one of the leading American Multinational retail companies that operate a wide chain of hypermarkets in different parts of the world. In this particular study, management activities of the company have been discussed. Four important management areas, i.e. planning, organizing, leading as well as controlling activities of the company have given special emphasis. In order to carry on the entire study, several aspects have been described (Chuang et al., 2011). The background of the company has helped to understand the present situation and thus has been described here in details. After that, four important theories have been described from the company perspectives and these are management and evolution of management theory, globalization and the global environment, planning and decision-making and structure and strategy. The first strategy has helped the company to determine the objectives and perceive the desired results based on the objectives. The second theory has influenced the company largely, and Wal-Mart is one of those companies that is largely affected by globalization. The planning process of the company is very updated as well as modified, as the target of the company is to satisfy both the customers and the suppliers. The company aims to provide the best quality products to the customers at the least as well as most affordable prices (Griffin, 2011).

The company is facing some problems in recent days, which should be addressed. One of the major problems is in the company outlets; their products are not kept in an organized way, which is making their customers dissatisfied. The second problem is, in their company outlets, most of their products are out of stock, but in their inventory, it has been revealed that huge stock of products is present, which are not being utilized. It has been found that the employees of the company have been facing several management issues related to the organizational environment, and these are not reaching the higher level of management. Based on the identified issues, some of the effective recommendations have been drawn for further improvement of the situation in Wal-Mart. These might help the company to overcome the present turbulent situation in the global scenario (Kreitner and Cassidy, 2011).

Company Overview

Walmart is one of the leading multinational retail companies of USA. The company was founded way back in 1962 and is headquartered in Arkansas in the US. In 2014, the company became the biggest company in the world in terms of revenue. The company operates all over the world with around 11526 stores distributed in over 28 countries. As per the 2014, financial statements of the company, the company generated total revenue of $476.294 billion. The operating income of the company was $26.872 billion, and net income was $16.022 billion in 2014 (Wahba, 2015). The increasing revenue and income of the company clearly resulted from the effective understanding of the management areas like planning, organizing, leading and controlling.

The planning part of Walmart included its mission and vision and objectives and goals. The organizing part of Walmart included its social networks, workplace culture, and business design. The leading stage of Walmart focused on improving the decision making, leadership, workplace motivation, and communication, etc. The controlling stage of Walmart helped in improving the strategic human resources and processes and systems. The key areas of management helped Walmart remain the biggest retailing company in the world as on 2015. The company registered an increase in its revenue to $485.651 billion in 2015 while its operating income and net income increased to $27.147 billion and $16.363 billion respectively. The company’s success was based largely on the use of cost leadership generic strategies and market development and penetration strategies which are based on the company’s mission and vision statements (Walmart.com, 2015).

Theories

The four theories used in the study of the concept of planning, organizing, leading and controlling are as follows-

• Management and Management Theory evolution
• Globalization and the global environments
• Planning and Decision-making
• Structure and Strategy

Management and Management Theory evolution

Management concept is used in Walmart to get things done by the right person at the right time. It will help in improving effectiveness and efficiency of the company. The key principles of management that could be sued in Walmart are as follows-

• Planning- Planning is the management function that will help the management of Walmart to develop certain managerial objectives as per the vision and mission statements of the company. The main objective of the company is to maintain the top position in not just the US retail market but also in the global retail market. The strategic plan of Walmart is based on the vision statement of the company.  The vision statement of Walmart stresses on the employees and consumers of Walmart (Payne, 2005).
• Organizing- The organizing function of management will help in conducting effective decision making in the company. As per the vision statement of Walmart, the key focus is on the employees and consumers of the company. Organizing involves assigning the right job to the right person. This will help influence the opinions of the employees and the consumers about the company. As effective organizing, function will help improving workforce efficiency as well as customer satisfaction (Moore, 2011).
• Leading- The two key activities in the leading function is to inspire and motivate the performance of the workforce of the company. Inspiring and motivating the employees will help them attain the organizational objectives of the company. It is important for the management of the company to understand the emotions, attitudes, values and personalities of the company. That will help the management integrate the motivation and leadership theory successfully in Walmart (Robbins and Coulter, 2012).
• Controlling- After the completion of all the three functions, planning, organizing and leading the management needs to measure and control the performance of the company. The three key points of controlling in Walmart are to develop performance standards, compare the actual performance with the standards and take preventive actions (Strydom and Smith, 2011).

The management theory could be used in Walmart to respond to the challenges and problems the company is likely to face in coming years. The Chairman, Greg Penner and the CEO and President, Doug McMillon controls the management of Walmart. The management of the company stressed on the intensive and generic strategies of Walmart (John Jones, 2004).

Globalization and the global environments

The organization structure of Walmart is based on its mission statement that is to provide the best product at affordable prices. Consumers prefer Walmart over its other competitors because it helps in saving the money of the consumers because of the low sales prices of the products. Globalization will help the company explore the global market. Some of the countries outside the US, where Walmart operates are Canada, Mexico, UK, Asia, South America and Africa. Walmart is the biggest retail company in the world and is influenced the most by globalization. Globalization has helped the company expand its existing market as well as penetrate and develop new markets in countries. Globalization also helped the company to improve its revenue and profit structure that could be understood from the growth in revenue and net income of the company from 2014 to 2015 (Forbes.com, 2015).

Globalization helped Walmart develop its logistics, technology, communication and information systems and economic and trade liberalization. Advancements in logistics, technology and transportation will help Walmart overcome the economic barriers in other countries and move beyond the saturated home market. The management of Walmart evaluated the market potential and customers’ demand in the global markets. Accordingly, Walmart used the globalization forces and developed a proactive approach to enter the market of various countries (Taylor, 2012).

Some of the key impacts of globalization on Walmart are as follows-

• Use of information technologies will help the company link with the suppliers and manufacturers and reduce the transportation and distribution costs.
• Locate stores in those areas which hold a minimum population of 25000 and where the level of competition from the local retailers.
• Locate stores in those areas which have strong transportation facilities and better market reach (Kourdi, 2011).
• Saturate the local markets by locating the stores near to the distribution centers.
• Enter suburban and metropolitan markets that are located in low-income regions and where the real estate is cheap and readily available.
• Target the middle to low wage earners as the companies targets customer base. This will help the retail company to segment the customer market in terms of customers’ income and reduce competition (Forbes.com, 2015).

It is necessary on the part of the management of Walmart to evaluate the changing external business environment. The key characteristics of the global environment which the management of Walmart should measure are-

• Environmental complexity- The environmental complexity can be measured by measuring various external factors that might affect the business activities of Walmart.
• Environmental change- The rate at which Walmart’s business environments change in the global market is known as environmental change (Thakor, 2011).
• Uncertainty- When the environmental complexity and change is high, then the uncertainty level for the company is also high, and the organizational resources are scarce.
• Resource Scarcity- Resource scarcity is the degree to which the organizational resources are available to the Walmart from the external business environment (Ferguson, 2015).

Planning and Decision-making

The planning function is used by the management of Walmart that is needed to develop certain goals. The planning function also suggests the ways by which the goals could be achieved. Using the planning function Walmart can develop both the goals and action statements. The goals statements will include all the goals that are required to be achieved by Walmart in coming years.

Decision making is the type of process that is adopted by the management of Walmart to measure the possible alternatives and actions that could be adopted to achieve the company’s mission and vision statements. Decision making is the element of the planning function which starts with the identification of the problem that is likely to affect the business objectives of the company to remain the biggest retail company in the world (Entrepreneur, 2015).

The various ways Walmart can improve strategic planning, and decision making is as follows-

• Identifying the problems- Using the decision making process will help Walmart overcome the likely business problems in future. Firstly, the management of the company should evaluate the problems. The likely problems that Walmart faces in coming years are poor inventory control, ineffective workforce management and lack of effective supply chain management. The problems might affect the revenue position and the customer base of the company.
• Seeking information- The management of Walmart needs to seek and evaluate the information that will help understand the problems that might be faced by Walmart. This information will help in understanding the cause of the problems that Walmart might face. Walmart can also evaluate the processes and personnel involved in the problems and detect the cause of the problems (Daft, Kendrick and Vershinina, 2010).
• Choosing the correct alternative- The management of Walmart needs to weigh the benefits and limitations of the action suggested for solving the problems. From various alternatives, the correct action should be developed by the company’ management as per its efficiency and cost.
• Implementing the plan- After selecting the accurate action for solving the company’s problem it should implement.
• Evaluating the outcomes- After executing the plan in the actual market, it should be evaluated and monitored regularly. It could be done by controlling the outcomes and suggest changes, if necessary (Daft, 2012).

Structure and Strategy

The business strategy of Walmart is the type of practical plan that will help achieve the objectives and mission of the company. The company achieves its key objectives is to achieve top position in the global retail industry. The mission of the company is to strengthen its customers’ base by providing products that have good quality and affordable prices. The structure and strategy of Walmart are based on its intensive and generic strategies (corporatereport.com, 2015).

Intensive Strategies of Walmart

The intensive strategies of Walmart are focused on its intensive growth in the global market. Some of the key intensive strategies of Walmart are as follows-

• Product development- Walmart does not use product development as the intensive strategy. Instead, the company focuses on the marketing and sales of its existing products and do not focus much on the development of new products. Therefore, it could be said that product development is not included in the company’s intensive strategies and growth of the company (Cole and Kelly, 2011).
• Market development- The secondary intensive strategy of Walmart involves market development. This kind of intensive strategies could be used by the company to enter new markets and explore new customer base. For example, the company, Walmart can establish new stores for achieving market development. The company can open stores in new countries to tap the consumer markets of the new countries. It will help the company expand and improve its business activities.
• Market Penetration- This kind of strategies are the primary intensive strategy of Walmart. The market penetration will strategy will help Walmart sell more products and goods in its current business market. Walmart can use this strategy that will help in selling more products and goods to the current customer market by offering promotions, special packages, and discounts. For example, the company provides discounts on wholesale packages of different products. (B.V., 2015)

Generic Strategies of Walmart

The generic strategy of Walmart is based on the Porter’s model. As per the generic strategy of Walmart, the company aims to maintain cost leadership in the market. As per the cost leadership strategy of Walmart, the company focuses on selling its products and goods at low prices. The biggest reason for which Walmart have been able to remain the biggest retail company in the world is due to its low price products. Walmart can maintain low price products due to its cost reduction activities. The company uses information technology for maximizing its operational efficiency. The company is also able to control the employees’ wages, which help control its operational costs.  Another reason due to which the company can minimize its prices is by conducting large-scale operations and high level of sales volume (Armstrong, 2011).

Problems identified

1.     Problems related to management

Many reports have pointed out the ill-organized nature of the stores of the Walmart Company. The company products were poorly assorted and displayed. The judgment of the customers regarding any company is based on the company outlets to which they have easy access. If the company stores are not organized properly and are in disarray, it can have a negative impact on the customers and can even lead to a drop in the sales of the products of the company. Recently, customers have presented concerns over the organization of the various Walmart outlets. It has been reported that the merchandise was not segregated according to their departments, and the overall presentation of the products was extremely poor. Some reports have even pointed out the unsanitary and unappealing conditions in which the intimate apparels of women were displayed. Reports have also emphasized of the unavailability and out- of- stock status of some the products of the company (Courtemanche and Carden, 2011).

The executives of Walmart have also acknowledged that they are facing a management problem related to inventory. Reports suggest that the company suffered a loss of about $3 billion in the year 2013 due to the imbalance between the sales and inventory sections. The major problems that have resulted in the emergence of these inventories related problems are the poor procedures and insufficient payroll hours dedicated to the management of the storage back rooms. A long-term problem that can be identified in Walmart is related to the approach of the management of the company. Reports suggest that most of the managerial positions in the company are held by male employees, this can lead to the emergence of bias in the decisions related to the promotion. This highlights the problem of gender discrimination and unjust and unfair treatment of the employees. The insufficiency of the managerial approach related to the fair implementation of the promotional policies results in an increase in the gap between the various levels of organization within the company. The problems of the lower level employees are not effectively communicated to the higher level management and hence, the management is unable to take appropriate steps to address these problems (Hallinger and Lu, 2012).

2.     Problems related to decision making and planning

The major strategic approach of Walmart is the production of products that are not intensively expensive. The company is known for the maintenance of exclusive systems of distributions and comparatively low labor costs. These strategies have given the company a competitive edge over its immediate competitors. However, recently it has been seen that these strategies are also causing an increase in the problems faced by the company related to profit dealing and their position in the highly competitive retail market.  Many studies have indicated that around ninety percent of the strategies that are implemented by companies fail to live up to the expectations and generate desirable profits.  The failure of Walmart’s strategy can be traced back to the failure of the company to address the most important stages of successful strategy planning. These are problem framing, motivating the human resources and preparing the institution for success (Meeks and Chen, 2011).

The foremost problem that could be identified in the Walmart scenario was that the company failed to identify the actual problem and thus, ended up solving the wrong problem well. The company failed to engage all the important stakeholders in the identification of the problem. The most important part of the planning process is effective execution. The company’s failure to completely harness the entire required workforce at the time of execution of the plan resulted in the achievement of minimal progress. Another important requirement for the effective planning strategy is preparing a complete and descriptive framework for the organization. The failure of Walmart’s planning strategy to provide an adequate framework for the employees is another major problem. Another major problem identified in the Walmart situation was the dropping customer satisfaction index. In the haste to implement the new strategy, Walmart lost its reputability among its faithful customers. These problems have resulted in the epic failure of the planning strategy of the Walmart Company.

3.     Problems related to strategy and structure

The immediate problem that is being faced by the Walmart Company is related to the strategy of the company regarding lowering their prices. This issue is posing a threat to the sales and profit profile of the company.  This scenario is arising because the cost- cutting strategies of the company are resulting in the failure to meet the profit targets.  The decision to lower the cost of the products has resulted in the inability of the management in sustaining the company’s competitive advantage in the retail market. The main problem associated with this decision is that the competitive advantage can be compromised on the grounds of the concerns regarding the quality of the products. This can also imply that the loyalty of the customers towards the Walmart Company is mainly attributed to the low price of the products and not to the quality of its products (Lasserre, 2012).

The organizational structure of the Walmart Inc is often identified as the chief determinant of the business activities to which the company is associated. The organizational structure of the company is also responsible for imposing limitations on the process by which the company addresses its major problems. The way in which the employees of the company deal with the various challenging situations within the company is also determined, to a great extent, by the organizational structure of the company. The major identifiable reasons that result in the emergence of problems related to management arise mainly if the managers fail to follow the ethical code of conduct. These situations can arise if the managers start using the company resources for personal benefits and fail to uphold the confidentiality of the information related to the company. The problems related to unethical behaviors of the management staff of Walmart have been on a rise. Reports suggest that there is an increase in the cases of that have violated the wage law. Other incidences of worker exploitation, as well as insufficient health care facilities, have also been reported.

Suggestions and recommendations

1.     Global expansion can effectively address the problem of market competition

The strategies followed by Walmart are based on its mission and vision statement which gives the major priority to customer satisfaction. This can be achieved if the company develops strategies that are aimed at keeping the costs and prices of the company products under check. The company should also continue global expansion in order to support its generic strategy in accordance to Porter’s model. Global expansion will help the company in achievement of better economies of scale which will also help in supporting the cost leadership strategy. Global expansion will also result in better implementation of the strategies which are concerned with the development of market and also market penetration (Lasserre, 2012).

Expansion of the company in the global market is extremely important in order to fulfill its mission and vision statement. The company can effectively address the problems associated with strong global competition if it takes up strategies that result in aggressive growth and expansion of the company. Thus, it is evident that on of the possible solution to the crisis currently faced by Walmart can be effectively countered if the company invests more in international expansion and growth. The company should invest in the countries where they lack an established market. Their marketing strategies should be focused on the market scenarios present in the targeted country.

2.     Strategies to increase employee satisfaction

The problems that are present within the organizational structure of the company can be effectively managed if the company takes up measures that are result in the implementation of a better promotion and motivation approach. In order to achieve this, the company should try and develop ways that aimed at ensuring that the existing company policies which are related to promotion of the company personnel, are followed religiously by the managers of the company. The responsibility regarding the recruitment of new employees should be given to the managers, and they should be made responsible for the posting of all the job related details. It should be made the duty of the managers to convey the details about new job openings to all the employees of the company (Meeks and Chen, 2011).

The employees should also be made completely aware about the determinants and criteria related to promotion and the transparency of the process should also be increased. This can be done by giving a clear report to the employees about their strengths and weaknesses and the reasons why they were not chosen for the post. The company should try to implement ways in which the overall workforce and especially the human resource of the company can be developed and improved. This can be achieved by conducting seminars and training sessions that will help the employees to improve their skills and thus, increasing their chances to get promotions. Another important method that can help in increasing the overall satisfaction of the employees is the recruitment of an official whose sole responsibility will be to assess and address the grievances of the employees and maintaining effective communication links between the all the strata in the organizational structure (Persky and Merriman, 2012).

3.     Strategies to improve customer satisfaction

A major problem which is faced by Walmart is a decline in the overall customer satisfaction related to its products. The major cause for these problems is related to the unappealing nature of the displayed products at its outlets and the unavailability of some of the popular products. There is an urgent need to address these problems, and the company needs to develop strategies that aim to increase the customer satisfaction. The company can employ a number of strategies that ensure customer satisfaction. Firstly, the company can develop ways that ensure quicker delivery of products from the backrooms of the company warehouse to the selves of the company outlets. This can be done by increasing the payroll hours dedicated to the management of the warehouse storage back rooms. The company should also increase the workforce involved in the entire process of the management of the inventories (Norton, 2011).

The company can ensure that the quality of the products is never compromised by increasing the discount rates on the fresh food products that are nearing the dates of expiration. This will ensure that the company does not face loses related to the unsold expired products. The company should also try to assess the most appropriate product that will help in increasing the sales of the company. The company should take advantage of market data and invest in the product that can ensure an increase in the sales and high profit.

Conclusion

The assignment is focused on the application of management functions in the business activities of the company, Walmart. Firstly, the four important management areas, i.e. planning, organizing, leading as well as controlling activities of the company are discussed. In this report firstly, a brief overview of the company, Walmart is made.  Walmart is one of the leading multinational retail companies of USA. The company was founded way back in 1962 and is headquartered in Arkansas in US. The business activities of the company is understood by evaluating the four management theories which are management and evolution of management theory, globalization and the global environment, planning and decision-making and structure and strategy. The first area includes the concept of the management function which are planning, organizing, leading and controlling function.  The second area includes the concept of globalization, which has helped Walmart develop its logistics, technology, communication and information systems and economic and trade liberalization. On the other hand, the organization structure of Walmart is based on its mission statement which is to provide the best product at affordable prices. In the third area, the planning function is used by the management of Walmart that is needed to develop certain goals. The decision making process is adopted by the management of Walmart to measure the possible alternatives and actions to achieve its objectives. In the fourth area, structure and strategy of Walmart its two key strategies, intensive and generic strategy are evaluated.

References

Armstrong, G. (2011). Principles of marketing. Frenchs Forest, N.S.W.: Pearson Australia.

B.V., (2015). Fayol’s 14 Principles of Management – Knowledge Center. [online] 12manage.com. Available at: http://www.12manage.com/methods_fayol_14_principles_of_management.html [Accessed 2 Dec. 2015].

Chuang, M., Donegan, J., Ganon, M. and Wei, K. (2011). Walmart and Carrefour experiences in China: resolving the structural paradox. Cross Cultural Management, 18(4), pp.443-463.

Cole, G. and Kelly, P. (2011). Management theory and practice. Australia: South-Western Cengage Learning.

corporatereport.com, (2015). [online] Available at: http://www.corporatereport.com/walmart/2015/ar/_downloads/walmart_2015_ar.pdf [Accessed 2 Dec. 2015].

Courtemanche, C. and Carden, A. (2011). Supersizing supercenters? The impact of Walmart Supercenters on body mass index and obesity. Journal of Urban Economics, 69(2), pp.165-181.

Daft, R. (2012). Management. Australia: South-Western.

Daft, R., Kendrick, M. and Vershinina, N. (2010). Management. Andover: South-Western/Cengage Learning.

Entrepreneur, (2015). Management. [online] Available at: http://www.entrepreneur.com/topic/management [Accessed 2 Dec. 2015].

Ferguson, E. (2015). Walmart’s Vision, Mission, Generic & Intensive Strategies – Panmore Institute. [online] Panmore Institute. Available at: http://panmore.com/walmart-vision-mission-statement-intensive-generic-strategies [Accessed 2 Dec. 2015].

Forbes.com, (2015). Forbes Welcome. [online] Available at: http://www.forbes.com/sites/paularosenblum/2014/05/22/walmart-could-solve-its-inventory-problem-and-improve-earnings/ [Accessed 2 Dec. 2015].

Forbes.com, (2015). Forbes Welcome. [online] Available at: http://www.forbes.com/management [Accessed 2 Dec. 2015].

Griffin, R. (2011). Management. Mason, OH: South-Western Cengage Learning.

Hallinger, P. and Lu, J. (2012). Overcoming the Walmart Syndrome: Adapting Problem-based Management Education in East Asia. Interdisciplinary Journal of Problem-Based Learning, 6(1).

John Jones, a. (2004). 10 Principles of Change Management. [online] strategy+business. Available at: http://www.strategy-business.com/article/rr00006?gko=643d0 [Accessed 2 Dec. 2015].

Kourdi, J. (2011). Effective decision making. London: Marshall Cavendish Business.

Kreitner, R. and Cassidy, C. (2011). Management. Mason, OH: South-Western Cengage.

Lasserre, P. (2012). Global strategic management. Basingstoke, Hampshire: Palgrave Macmillan.

Liedtka, J. and Ogilvie, T. (2011). Designing for growth. New York: Columbia Business School Pub.

Meeks, M. and Chen, R. (2011). Can Walmart Integrate Values with Value?: From Sustainability to Sustainable Business. JSD, 4(5).

Moore, D. (2011). Managerial decision making. Cheltenham: Edward Elgar.

Norton, D. (2011). Producing customer happiness: the job to do for brand innovation. Strategic Direction, 27(4).

Payne, V. (2005). Planning and managing change. [New York]: American Management Association.

Persky, J. and Merriman, D. (2012). Focus Issue: WalMart. Economic Development Quarterly, 26(4), pp.283-284.

References

Robbins, S. (2011). Management. Frenchs Forest, N.S.W.: Pearson Australia.

Robbins, S. and Coulter, M. (2012). Management. Boston: Prentice Hall.

Saxena, R. and Sharma, A. (2011). Everyday low price â a blessing in disguise for Walmart during recession. IJBG, 7(4), p.409.

Schermerhorn, J. (2011). Management. Milton, Qld.: John Wiley.

Strydom, J. and Smith, M. (2011). Principles of business management. Cape Town: Oxford University Press.

Taylor, F. (2012). The Principles of Scientific Management. Auckland: The Floating Press.

Thakor, A. (2011). The four colors of business growth. San Diego CA: Academic Press.

Thakor, A. (2011). The four colors of business growth. San Diego CA: Academic Press.

Vestal, K. (2012). Which Matters: Employee Satisfaction or Employee Engagement?. Nurse Leader, 10(6), pp.10-11.

Wahba, P. (2015). Walmart U.S. CEO: fresher food, fill empty shelves and lower prices. [online] Fortune. Available at: http://fortune.com/2015/04/02/walmart-improvements-ceo/ [Accessed 2 Dec. 2015].

Walmart.com, (2015). Walmart. [online] Available at: http://www.walmart.com [Accessed 2 Dec. 2015].

Zieger, R. (2011). Walmart and the broken narrative of US labor history. Labor History, 52(4), pp.563-569.