Analyzing the Learning and Development Strategies of an Existing Organization Wal-Mart - Case Study Example

? Analyzing the learning and development strategies of an existing organization – Wal-Mart The challenges that firms have to face in the context of the global market are many. The use of effective strategic tools can help firms to increase their competitiveness towards their rivals and secure their financial performance. However, the success of these tools is not guaranteed; adverse market conditions, lack of adequate communication and high resistance to the attempted changes, can lead the plans of organizations to a failure. Still, there are certain strategic tools, which have been proved quite effective in enhancing financial performance. Reference is made specifically to learning and development (L&D), a tool used by managers in most organizations for increasing employee performance. In practice, it seems that firms choose different approaches for promoting L&D. The various aspects of learning and development are analyzed and evaluated in this paper. The case of Wal-Mart is used as an example to show the level at which L&D can promote organizational success. Table of contents 1. Introduction 4 2. Learning and Development strategies in Wal-Mart 4 2.1 Overview of Learning and Development strategies in Wal-Mart 4 2.2 Is L&D in Wal-Mart strategic? 6 2.2.1 Characteristics of L&D in modern organizations 6 2.2.2 When L&D is strategic? 7 2.2.3 At what level L&D in Wal-Mart is strategic? 8 2.3 How is learning and development delivered in Wal-Mart? 9 2.3.1 Common methods for the delivery of L&D in modern organizations 9 2.3.2 L&D delivery in Wal-Mart 10 2.3.3 Problems in regard to the delivery of L&D in Wal-Mart 11 2.4 Is L&D in Wal-Mart effective? 12 2.4.1 Which are the common criteria of effectiveness of a L&D scheme? 12 2.4.2 Is L&D in Wal-Mart effective? 12 2.5 Evaluation of existing L&D strategies in Wal-Mart. 13 3. Conclusion 15 4. Recommendations 17 References 18 Appendix 21 1. Introduction The incorporation of effective learning and development (L&D) strategies in modern organizations can ensure that their activities will be effectively supported in regard to all their phases (Armstrong 2008, p.175). According to Armstrong (2008), L&D, as developed in companies with different characteristics, focuses on the development of a learning culture and the promotion of organizational learning’ (Armstrong 2008, p.175). Organizations that emphasize on L&D become ‘learning organizations’ (Pedler, Burgoyne and Boydell 1991, cited in Fee 2011, p. 44), a term used for describing those organizations that ‘facilitates the learning of all its members’ (Fee 2011, p. 44). The characteristics and the role of L&D are presented in this study. Reference is made to a particular organization, Wal-Mart. Wal-Mart, a US-based firm, has particular emphasized on L&D, as a tool for securing its position in the global market. The review of the firm’s L&D strategies has led to the following assumption: the organization’s current efforts for promoting L&D can be characterized as satisfactory. However, it is clear that more initiatives would be taken, especially since the organization is interested in further improving its position in the global market, as explained in the sections that follow. 2. Learning and Development strategies in Wal-Mart 2.1 Overview of Learning and Development strategies in Wal-Mart In order to evaluate the effectiveness of L&D strategies of Wal-Mart it is necessary to review the key aspects of L&D, as developed in the particular organization. Then, the particular aspects of the firm’s L&D schemes, such as the methods of delivery, the problems involved and the level of effectiveness can be discussed and appropriately analyzed. According to the organization’s website, in Wal-Mart L&D is a continuous process, and not just a tool for periodically supporting the organizational performance (Wal-Mart, Careers 2012). In the context of the hiring process, a profile is developed for every employee entering the organization (Wal-Mart, Careers 2012). This profile is then used for judging the employee’s needs in terms of L&D but also his capabilities in regard to the organization’s operations. It is at this point that the ability of employee to perform excellent in certain positions is defined. At the next level, employees in Wal-Mart have access to the following schemes, as related to L&D: a) the Lifelong Learning Program, a scheme developed in cooperation with the American Public University (Wal-Mart, Careers 2012), b) a series of appropriately customized Training and Development programs (Wal-Mart, Careers 2012); the participation of each employee in these programs is decided based on the needs of the tasks assigned to the particular employee; one of these programs, ‘the Business Leadership Series (BLS)’ Wal-Mart stores, Diversity 2012) helps employees in Wal-Mart to increase their leadership abilities; c) the Manager Training programs are programs designed especially for the firm’s managers (Wal-Mart, Careers 2012); d) The Global Talent management scheme promoted in the firm’s units worldwide ensures the effective management of ‘diverse leadership talent in Wal-Mart’ (Wal-Mart stores, Diversity 2012); e) the Wal-Mart Leadership University supports the training needs of employees in Wal-Mart’s Corporate Office (Wal-Mart stores, Diversity 2012); f) ‘Computer based learning classes’ (Wal-Mart stores Diversity 2012) have been also developed for supporting the needs of the firm’s employees in terms of professional development. The characteristics and the effectiveness of these programs are discussed in the sections that follow. In 2011 Wal-Mart announced a $3 million training program (PRNewswire 2011). The program aims to help residents in Washington to improve their professional skills (PRNewswire 2011); the program that addresses 2,000 residents in Washington, is part of the firm’s efforts to support community (PRNewswire 2011). The above program also reflects the importance of learning and development in Wal-Mart. 2.2 Is L&D in Wal-Mart strategic? 2.2.1 Characteristics of L&D in modern organizations Theorists and researchers have employed different approaches for explaining the characteristics and the role of L&D. An overall description of the learning process is presented in Figure 1 (Appendix). Cartwright (1993) explains that L&D is often related to a firm’s investment decisions; in fact, it seems that L&D is often considered as ‘the investment of a firm on its human capital’ (Cartwright 1993, p.2). The above researcher notes that two are the key characteristics of L&D: a) it can be quite costly, depending on the number of employees and the targets set and b) it cannot be effective unless it is supported by employees (Cartwright 1993, p.2). Moreover, Woods and West (2010) claim that L&D schemes can be of no value if the knowledge acquired through the relevant seminars is not used shortly after the end of these seminars. In other words, keeping knowledge acquired through a L&D scheme inactive could result of the elimination of the scheme’s benefits. However, it seems that the benefits of L&D schemes are not always visible in the short term, which is another characteristic of these schemes (Heijden 2002). For this reason, the evaluation of L&D schemes should be based on the observation of these schemes’ performance through a long period of time (Heijden 2002). If such evaluation takes place shortly after the end of a L&D scheme, then its results would be disappointed. It should be noted that managers involved in the development of L&D programs are likely to face a series of challenges (Figure 2, Appendix). In any case, the parts of a L&D scheme are depended on the needs of each organization and the conditions of the organizational environment; an indicative Skills Development Strategy is presented in Figure 3 (Appendix). 2.2.2 When L&D is strategic? The terms for characterizing a L&D scheme as strategic seem to be differentiated. For example, Rahim (2010, p.61) notes that L&D is strategic when it is used for controlling and eliminating, if possible, strategic conflict within organizations. In this way, organizational performance can be significantly enhanced (Rahim 2010). From another point of view, Chawla and Renesch (1995) claim that R&D can be characterized as strategic when it helps managers to develop strategic decisions, i.e. decisions that are of critical importance for the organization involved. Fee (2011) refers to another aspect of the relationship between L&D and strategy: he explains that every learning organization tends to have five key characteristics, among which strategy and learning opportunities are included (Fee 2011, p.44). From a similar point of view, Sims (1999) explains that a learning scheme can be strategic since it needs to be aligned with the organization’s strategy. Reference is made to the case of training schemes that are widely used for learning purposes in organizations internationally. These schemes are developed taking into consideration the strategy, the needs and the resources of the firm involved (Sims 1999, p.14). This, unavoidable, relationship between the learning process and strategy, makes L&D strategic. Baron and Armstrong (2007) give another explanation of the strategic nature of L&D. The above researchers note that L&D is established within organizations after being approved by the organization’s strategic planners (Baron and Armstrong 2007, p.16). Indeed, it is at the level of strategic planning that the introduction of L&D schemes in a particular organization is decided (Baron and Armstrong 2007, p.16). This is another fact supporting the view that L&D is strategic. 2.2.3 At what level L&D in Wal-Mart is strategic? According to the issues discussed above, in order to check whether L&D in Wal-Mart is strategic there are certain conditions that have to be met. The review of the firm’s L&D strategy proves that this term seem to be met, at least at a first instance. As discussed above, in order for a firm’s L&D scheme to be characterized as strategic it is necessary to meet specific criteria, the most important of which are the following two: a) the particular strategic scheme is aligned with the organization’s strategy (for example, Figure 4, Appendix), b) the specific scheme is part of the organization’s strategic planning process, i.e. it is not just a temporary measure for increasing organizational performance, see also section 2.2.2 above. L&D in Wal-Mart seems to meet the first criterion, meaning that in the particular organization L&D is aligned with the organization’s strategy; indeed, according to a firm’s report, where the Sustainability progress of the organization for the years 2007/2008 is presented, each department of the organization offers to its employees a series of L&D schemes ‘aligned with the organization’s strategic directions’ (Wal-Mart, Sustainability Progress Report 2007). The second criterion for characterizing L&D in Wal-Mart in strategic is also met. More specifically, L&D in Wal-Mart is a key element of the organization’s strategic planning: L&D schemes have been related to all phases of employment, not only in the hiring process. More specifically, according to the organization’s website, after the completion of the hiring process, training is provided to the candidate chosen ensuring that ‘performance expectations will be met’ (Wal-Mart, Sustainability Progress Report 2007). At the next level, a Personal Development Plan is offered to each employee based on the needs of its his position within the organization but also on his existing skills and competencies (Wal-Mart, Sustainability Progress Report 2007). At the same time, a Lifelong Development Program is available to the employees of Wal-Mart who are interested in receiving ‘a college credit for their work in Wal-Mart’ (Wal-Mart, Careers 2012). Appropriately customized training programs are also available to the firm’s managers, so that they become successful leaders (Wal-Mart, Careers 2012). Under these terms, it could be noted that L&D in Wal-Mart is a key part of the firm’s strategic process and not one of the tools for improving the performance of certain organizational activities. The firm’s existing plans for supporting training and development are analytically presented in section 2.1 above. The range and the elements of these plans verify the view that learning and development in Wal-Mart is an indispensable part of the firm’s strategic planning, a view that leads to the assumption that L&D in Wal-Mart is strategic, especially since the other term for characterizing L&D in Wal-Mart as strategic is met, as explained above. 2.3 How is learning and development delivered in Wal-Mart? 2.3.1 Common methods for the delivery of L&D in modern organizations Most commonly, L&D schemes are delivered to employees in the form of seminars/ lectures developed either within the organization or in institutions that are specialized in the particular field (Bratton and Gold 2001). Van Velsor et al. (2010) note that organizations that aim to promote L&D tend to customize their systems accordingly, meaning that all systems of these organizations are aligned with the principles of L&D. It is implied that such strategy is required in order for risks related to L&D to be minimized. It should be noted that L&D is a rather recent concept; according to Wilson (2005) the first forms of L&D in organizations can be traced in 1960s. In its current form, L&D is highly related to 1990s, where most of the elements of current L&D schemes were first established (Wilson 2005). In modern firms, the delivery of L&D could be explained by using the holistic strategy, which is based on ‘sharing of knowledge and experiences’ (Hanna and Knight 2011, p.16). E-development programs have also become popular, helping employees to become familiar with IT systems, as involved in various organizational activities (Hanna and Knight 2011). In any case, coaching and mentoring seem to be key tools for promoting L&D; in a survey conducted by CIPD (UK) in 2004, it was revealed that about ‘78% of the participants/ employers use coaching as a training and development method’ (Parsloe et al. 2009, p.7). The research developed by Cummings and Worley (2008) has revealed that three are the key methods used by firms in order to support the personal development of their employees: ‘a) coaching and mentoring, b) career planning and c) management and leadership’ (Cummings and Worley 2008, p.160). In Deloitte, a Global Learning platform has been introduced for promoting L&D (Hatum 2010, p.91); this platform highly supports talent management, a fact that positively affects the firm’s name in the market as a popular employer (Hatum 2010). In the National Bank of Pakistan, the L&D plan adopted for supporting the personal development of employees incorporates a wide range of strategies (see Figure 5, Appendix). 2.3.2 L&D delivery in Wal-Mart In Wal-Mart L&D, as already analyzed earlier, is based on the following rule: training and development programs are available to employees since their entrance in the organization and as long as the employees are members of the organization (Wal-Mart, Careers 2012). As of their form, these programs can be characterized as common, not having elements that distinguish them from the similar programs of competitors. The range of these programs cannot verify their uniqueness. As noted in the organization’s website, employees can choose the training and development program that most suits to his needs (Wal-Mart, Careers 2012); still, the needs of the organization, in regard to the tasks that have to be developed by each employee, cannot be ignored. At the same time, it is not made clear whether the organization has incorporated an online solution for covering the training and development needs of its employees; since no reference is made to such a scheme it is implied that the firm uses the traditional forms of L&D schemes, i.e. the seminars, the support from employees who are already experienced in specific tasks and the allocation of supervisors, especially to the firm’s new employees. 2.3.3 Problems in regard to the delivery of L&D in Wal-Mart As noted in the study of Bratton and Gold (2001) the development of L&D, as part of an organization’s strategy, is highly depended on the support provided by employees at all levels of the organizational hierarchy. If such support exists, then innovative schemes, included schemes referring to L&D, can be promoted across the organization. The methods used currently for the delivery of L&D in Wal-Mart can be characterized as appropriate and effective with just one exception: IT systems are not particularly involved in this process. Reference is made specifically to the lack of a central IT system for controlling training and development across the organization. Online training has been incorporated in the firm’s L&D plans, as analyzed in section 2.1; still, there is no a central IT system through which training and development of all the firm’s employees, i.e. employees in the firm’s units worldwide, is organized and monitored. In this way, the firm’s HR managers cannot introduce a L&D scheme applied simultaneously in all the firm’s units around the world (Miguel-Angel 2007). Also, in this way, it is difficult for the firm’s HR managers to have a clear view on the performance of employees in regard to the L&D schemes that the organization currently uses (Sleezer et al. 2002). 2.4 Is L&D in Wal-Mart effective? 2.4.1 Which are the common criteria of effectiveness of a L&D scheme? Since its introduction in a particular organization, a L&D scheme can ensure the improvement of employee performance, either in the short or the long term (Anderson 2000). Moreover, L&D can have more effects on organizational performance. As noted in the study of Towers (2004) L&D schemes can help organizations to manage more effectively the effects of ‘increased flexibility in the labor markets’ (Towers 2004, p.409). For example, in Boeing, the development of an integrate L&D scheme has helped the organization to control ‘defects and training costs’ (Anderson 2000, p.177). On the other hand, Cheese, Thomas and Craig (2007) note that a L&D scheme can be characterized as effective when it is ‘both learning and teaching’ (Cheese, Thomas and Craig 2007, p.242). Of course, the use of other criteria for evaluating the effectiveness of a L&D scheme, such as the financial performance of the organization involved, cannot be rejected. 2.4.2 Is L&D in Wal-Mart effective? In the context of the issues highlighted above, the L&D schemes of Wal-Mart can be characterized as effective. However, it is clear that these schemes should be appropriately updated, incorporating features that increase the effectiveness of these projects; for example, the establishment of a central L&D plan, common for the firm’s employees worldwide, would increase the potentials of the firm in terms of L&D. The specific system would also improve the firm’s image in the market since the terms of employment, as related to the firm’s various positions, would become clearer. Also, such system could help towards the increase of the firm’s pool of candidates, meaning that every time an emergent needs appear the firm would be able to hire with no delay an appropriately skilled individual. The effectiveness of L&D in Wal-Mart would be decided by referring primarily to the firm’s financial performance, focusing on the level of training and development costs. Of course, the ability of the firm to manage an extensive workforce worldwide denotes its effectiveness in terms of employee performance management, including the L&D sector. According to Bergdahl (2010) the L&D scheme of Wal-Mart should be characterized as quite effective; the firm has managed ‘to employ approximately 2 million people worldwide’ (Bergdahl 2010). It is noted that the key reason of the firm’s success is the following fact: in Wal-Mart employees are used as ‘a bridge for tying organizational tactics together so that organizational goals are achieved’ (Bergdahl 2010). Other criteria in order to decide the effectiveness of L&D in Wal-Mart would be the following: a) the level at which the firm’s L&D schemes are embedded in the organization and b) the willingness of employees to support these schemes. These criteria are used in section 2.5 below when evaluating the effectiveness of L&D in Wal-Mart. 2.5 Evaluation of existing L&D strategies in Wal-Mart. According to the issues discussed above, Wal-Mart’s existing L&D strategies could be evaluated using specific criteria. At a first level, the firm’s financial performance, as developed through the decades should be reviewed for deciding on the effectiveness of L&D schemes in Wal-Mart. As proved through the firm’s financial results (Figure 6, Appendix), the organization has achieved a continuous growth from 2008 up to 2012. This fact indicates the lack of severe failures in regard to the organization’s plans but also the high employee turnover. At the same time, reference should be made to the important development of the organization since its establishment, in 1962. Indeed, the firm has managed to increase its profitability from $250,000 in 1962 at about $443.9 billion in 2012, which is a significant increase, taking into consideration the severe market pressures (Figure 7, Appendix). Moreover, it seems that the firm has managed to handle the recent financial crisis; between 2002 and 2012 the firm increased its net sales from $201.2 billion to $443.9 billion (Figure 7, Appendix), a fact indicating the effectiveness of the firm’s resources, as used for supporting the firm’s daily activities. It is implied that employee performance in Wal-Mart is high, a fact highly related to the appropriateness of L&D schemes developed across the organization. Moreover, the organization’s L&D scheme is strategic, being aligned with the organization’s strategy and being involved in all organizational processes. More specifically, L&D in Wal-Mart is promoted through a range of policies, as presented in section 2.1 above. These policies are carefully designed addressing different needs of employees in terms of L&D; for example the Wal-Mart Leadership University aims to support the training needs of employees in the Corporate Office, i.e. at the higher levels of the organizational hierarchy (Wal-Mart stores 2012 Diversity 2012). For employees in other organizational departments, appropriately customized L&D schemes are available. For example: ‘the Global Talent Management or the Computer-Based Learning scheme’ (Wal-Mart stores 2012 Diversity 2012). This means that the needs of the firm’s employees in terms of L&D are fully addressed ensuring equality in the workplace. Therefore, in Wal-Mart L&D is well embedded in the organization, being customized so that training needs of employees are covered, a fact that further leads to the achievement of organizational goals. The effectiveness of L&D in Wal-Mart would be decided using another criterion: the quality of the relevant schemes, as of their structure and elements. Each part of the firm’s L&D seems to be appropriately developed so that specific needs of employees, in terms of professional development, are addressed. The review certain of these schemes verifies the fact that L&D in Wal-Mart could be further improved. For example, through the Lifelong Learning Program, the firm’s employees can continue their college studies, while working in Wal-Mart, and take a degree (Wal-Mart Life Long Learning Program 2012). Also, through the Global Talent Management scheme of Wal-Mart the talent capabilities of the firm’s employees are identified early (Wal-Mart Life Long Learning Program 2012), so that their position in the organization is improved appropriately, a fact that increases the effectiveness of the relevant units. Moreover, in Wal-Mart different options are given to employees for supporting their leadership skills: through ‘the talent management, through the leadership development, through the business action plan development and through the actual involvement in firm’s daily operations’ (Wal-Mart stores Diversity 2012). The issues highlighted above further verify the fact that L&D in Wal-Mart is appropriately embedded in the organization, increasing employee motivation and securing the firm’s position in the global market. Under these terms, L&D in Wal-Mart should be characterized as effective. The introduction of certain changes in regard to the firm’s existing L&D scheme, as suggested in section 4 below, would lead to the further improvement of the firm’s L&D strategy, a fact that would also highly benefit the organization’s performance. 3. Conclusion The effectiveness of L&D strategies is based on a series of criteria. As proved in the case of Wal-Mart, L&D can highly support the organizational performance but only under specific terms: it is required that L&D is strategic, i.e. that it is aligned with the organization’s strategy. It is also required that L&D supports the firm’s profitability, another target that has been achieved. Moreover, it has been made clear that in Wal-Mart L&D is well embedded in the organization, being delivered through different practices, each one of which is related to different needs of employees in terms of learning and development. Because of the above reasons, L&D in Wal-Mart has been proved to be effective. On the other hand, it should be noted that the implications of L&D can be many; the cost of these schemes is a key issue that needs to be carefully checked in advance, so that the profitability of the organization is not set in risk. In 2009, the funds invested by US firms on L&D schemes have been estimated to ‘$125.9 billion’ (Werner and DeSimone 2011, p.4). Still, the importance of L&D for organizational development cannot be ignored. In 2005 Wal-Mart attempted the transformation of its L&D policy (ASTD 2007); instead of using a traditional training scheme for covering the training needs of its employees, the organization introduced a series of initiatives so that learning and development was embedded in all organizational processes (ASTD 2007). These initiatives have been unavoidable since the firm’s existing training department could not support the increased needs of employees in terms of training, as resulted because of the radical changes on the firm’s processes (ASTD 2007). In other words, in Wal-Mart the transformation of the organization to a learning organization has resulted under the pressures of the market and the need of the organization to secure its position in the global market. The review of the firm’s current L&D scheme, as analyzed above, leads to the assumption that the above initiatives have been quite successful. 4. Recommendations The performance of L&D in Wal-Mart can be characterized as quite satisfactory. Still, problems and failures have not been avoided, as analyzed above. These failures do not allow the organization to be significantly benefited by its L&D schemes. As noted in the study of Briscoe, Schuler and Claus (2008) L&D can become a sustainable advantage for a particular organization under the following terms: that L&D is involved in all organizational processes, a fact that would allow the organization ‘to learn faster than its competitors’ (Briscoe, Schuler and Claus 2008, p.200). The specific practice would be also incorporated in Wal-Mart. Of course, in Wal-Mart L&D is well embedded in the organization; however, efforts could be made for the further promotion of this strategy. For example, the performance of employees in L&D could be set as a prerequisite for their promotion. Also, L&D would be set as a criterion for evaluating the performance of the firm’s units worldwide; business units with high performance in terms of L&D should be appropriately monitored and treated. At the next level, Wal-Mart could introduce a central IT system for managing the firm’s L&D globally. In this way, the firm’s L&D strategy would be common for its employees worldwide, a fact that would allow the increase of communication and collaboration across the organization. Indeed, the firm’s employees worldwide would develop similar perceptions in regard to various organizational processes; in case of unexpected problems, employees would exchange views so that an appropriately solution is retrieved with no delay. At the next level, the centralization of the firm’s L&D scheme would allow the strengthening of organizational culture, a fact that would also support the achievement of organizational goals; also, such system could help to decrease the cost and the time required for the completion of each L&D project (Hanna and Knight 2011). However, this system should be combined with ‘user-driven innovation and multiple feedback mechanisms’ (Hanna and Knight 2011, p.16), otherwise its performance would be rather low. Another important requirement for the improvement of the firm’s L&D scheme would be the following one: the firm’s L&D policies should be appropriately categorized, so that their availability for employees in different units to be clearer. As explained earlier, in section 2.1, the firm has introduced a wide range of L&D projects, which seem, however to be highly dispersed, a fact that possibly decreases their value. 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Belmont: Cengage Learning Appendix Figure 1 – The learning process (Source: Buckler 1996, p.32) Figure 2 – Developmental challenge that a firm’s managers are likely to face in regard to L&D (Source: DeRue and Wellman 2009, p.861) Figure 3 – Skills Development Strategy, at national level (Source: ILO 2008, p.11) Figure 4 – Leadership strategy for managing new cultural capabilities (Source: McGuire et al 2009, p.9) Figure 5 – Management Development Practices in National Bank of Pakistan (Source: Qayyum et al. 2012, p.11) Figure 6 – Financial Performance of Wal-Mart (Source: Annual Report 2012, p.17) Figure 7 – Net Sales of Wal-Mart between 1962 and 2012 (Source: Annual Report 2012, p.2) Read More