Wal-Mart Stores Inc. in 2008: Management's Initiatives to Transform the Company and Curtail Wal-Mart Bashing - Case Study Example

?Case 22: "Wal-Mart Stores Inc. in 2008: Management's Initiatives to Transform the Company and Curtail Wal-Mart Bashing," by Arthur A. Thompson, C367–C400 Table of Contents Case 22: "Wal-Mart Stores Inc. in 2008: Management's Initiatives to Transform the Company and Curtail Wal-Mart Bashing," by Arthur A. Thompson, C367–C400 1 Table of Contents 2 Introduction 3 Challenges 3 Strategic Actions 5 Conclusion 8 References 10 Introduction Wal-Mart is considered to be one of the largest retailers of the world with a formidable brand image. The company was established in the year 1962 in USA. Since then the organization has rapidly expanded over the years to emerge as one of the most formidable brands of the world. The company is presently listed on the bourses of the New York Stock Exchange where its stocks are actively traded. The success story of Wal-Mart has been traced to its strategy of providing everyday low prices to its customers. The company has been able to sustain this strategy on the virtue of its efficient supply chain management that has been powered by an effective use of ERP. The company has also expanded international over the years and has operations spread out of numerous diverse regions of the world and has successfully replicated its strategy of everyday low prices in every location across the globe. The company has been constantly rated as one of the most formidable brands of the world with the organization regularly featuring in the list of the top global brands in the Fortune’s list of most formidable brands (Wal-Mart, n.d.). Challenges The success story of the organization has also been associated with numerous challenges. These challenges have emerged as some of the biggest threats to the organization over the years. The company’s challenges included facing lawsuits and other media bashing over issues of gender bias at the workplace apart from other labour management issues such as non payment of wages to the workers etc. In addition to this the company also faced issues with regards to other aspects that included its controversial sales of guns that emerged when the company violated the ten day waiting norm for sale of guns. In addition to this the company also faced criticisms and lawsuits with regards to the sale of toy gun bullets. In this case the company violated the federal norms by selling toy gun bullets that essentially resembled real bullets that was largely forbidden by the laws in New York. The company faced lawsuits in this regard and faced penalties amounting to 1000 US dollars for each gun sold that numbered almost 42000 in 1997. Wal-Mart also faced legal proceedings and media criticisms following the employment of illegal immigrants as cleaners in its stores. The company was accused of employing illegal immigrants as cleaning staff even when the top managers of the stores were fully aware of the fact that illegal immigrants were being employed by the organization. The company faced extensive criticisms from every quarter of the society. The company was also put under the scanner by the federal authorities for not complying with the rules of employment and violations of norms of employment of labour. The company amidst all these controversies and criticisms found itself again in the midst of a severe crisis situation when it was alleged that Wal-Mart did not pay adequate wages to its workers and that its compensation policy for the workers was not in tune with the offerings of similar super market chains in the nation. The United Food and Commercial Workers started exerting pressures on the organization to force it to adopt a compensation policy that would seek to match the compensation offering of other competitors of the category. This led to strikes at some of its stores hat hampered operations and led to losses for the organization (Thompson, Strickland, Gamble & Jain, 2006, p.67). The company faced considerable criticisms in the media following these incidents. These incidents also dented the image and positioning of the organization among the members of the society. This prompted the organization to adopt strategies that would seek to redress these issues and improve its positioning in the market. Strategic Actions Wal-Mart was placed in a very crucial phase as the controversies had embroiled into a set of major challenges for the organization that was largely affecting its positioning in the market. The company took many steps such as press releases to ease out the matter. According to a report by the American Enterprise Institute for Public Policy Research the Wal-Mart was the only organization in new Maryland USA that did not meet the regulatory standards that made it compulsory for business firms employing over 10000 workers to spend about 8 percent of their sales towards the healthcare aspects of the employees (Vedder, 2006). In response to the criticisms from the media the company launched a public relations strategy that involved a campaign that tends to showcase the advantages and the social initiatives of the company. This was meant to showcase the best aspects of the organizations in an attempt to regain its positioning in the society. The company also publicly stated that it would fully cooperate with the regulatory issues including adherence to laws on toy bullets and the sale of guns. In fact the company virtually stopped selling guns from some of its stores as a counter measure to help regain its positioning among the members of the society as well as the employees of the organization. In response to the criticisms Wal-Mart used the online communication channel to rebuild its positioning. The company opened up a large number blog sites and put up blogs that increasingly highlighted the company’s strategies and its contributions and strengths. The company used an employer named Brian Pickrell as the author for the blogs but the writings essentially reflected the thinking’s and strategies of Wal-Mart. The strategy of using blog sites as a public relation channel helped in gaining benefits to the organization. The company also set up a website specifically dedicated towards the aspect of image rebuilding amongst the customers as well as the employees (Lawrence & Weber, 2010, p.431). In addition to the use of blogs as a channel for public relations, the company also undertook a market survey that involved use of surveys and interviews that would help analyse the root of the problems and would also provide a better understanding of the extent of damage caused by the media bashing to the consumers. The survey also included finding out the perception of the target market audience with regards to the aspects of its stores including store cleanliness, staff behaviour etc. It tried to gauge the satisfaction levels of the customers so as to introduce better practices at the organizations. The survey also involved analysing the views of the individuals with regards to the dissatisfaction of the employees of the organization. The survey tried to analyse the employee’s feedback about the work culture prevailing in the organization. After collecting the responses the company went about on a massive promotional campaign covering all channels of communication to propagate the advantages of its stores. The campaigns also involved an attempt by the organization to showcase itself as an employee friendly organization. The promotional campaigns also highlighted the aspect of legislative compliance as well as strict quality control measures being adopted by the organization (Pride & Ferrell, 2006, p.518). These campaigns were meant to showcase the organization as a good brand for consumers as well as a proper and congenial workplace towards the prospective employees of the organization. The company also paid up the legal penalties without any protests. Wal-Mart reportedly paid legal damages worth 11 million US dollars to the regulatory authorities to settle out disputes regarding violations of the labour hiring and compensation norms. The company also agreed to ensure that it would not employ illegal immigrants as workers and also that it would take considerable measures to ensure adherence to labour laws by promoting a safe and congenial environment at the workplace. The company agreed to take up healthcare and good job practices as matters of urgent importance. These attempts were largely undertaken to help regain the confidence of customers as well as the internal resources including its employees from the lower levels (Mooney, Knox & Schacht, 2010, p.322). Wal-Mart has realised the importance of human resources as a cornerstone for success. However with large number of criticisms pouring in from many quarters the company has formulated a new HR strategy that seeks to improve the aspects of remuneration and incentives being offered to the employees. The company has also undertaken a major drive to showcase its commitments to its employees by investing in healthcare aspects of the employees of the organization. Wal-Mart has also adopted a strategy that seeks to provide greater autonomy and freedom to the employees. A flat hierarchy has been proposed where everyone would be an ‘associate’. This would help ensure job satisfaction which the most important ingredient for ensuring motivation among the employees. This in turn would lead to better organizational excellence that would help in ensuring long term growth for the organization (LI, 2011, p.96). In addition to the strategies employed Wal-Mart can also implement other tactics that would help in a long term advantage at the organization. The strategies would include better compensation policies, as well as serious efforts to ensure employee motivation. The company should have a compensation structure that would match the best in the industry. In addition strategies must also be taken for ensuring equal opportunities for every employee of the organization. An effective incentive policy should also be created that would motivate the employees of the organization. The incentive policy must largely be based upon the performance of the employees. In addition there must be a clear line of communication between the employees and the top management. Employees should be able to share their grievances about the organization freely. Efforts should be made to ensure no gender basis or racial discrimination at the organization. This would help them take up their activities as responsibilities and not routine tasks. In addition to strategies for human resources the organization must also implement strict quality control measures so that issues like non adherence to the standards of product sold could be avoided. A quality control department must be established that would look up issues and compliance of the norms. Regular audits and structured visits must be carried out to ensure compliance with the norms. Finally the organization must try to implement policies that seek to provide greater value to the customers. The customer service cell must be improved so as to provide better mechanisms for grievance management. In addition to this employees must be given adequate training so as to ensure compliance with norms as well as ensuring the satisfaction of the customers by providing prompt and speedy service to the customers. Last but not the least a monitoring and feedback mechanism must be used so that timely action can be initiated for issues within the organization. Adopting a Balanced Scorecard Approach would help in evaluating the effectiveness of the financial as well as non financial strategies. This would help the firm to take up issues that need urgent attention and formulate strategies to ensure timely action that would prevent further damage to the organization (Balanced Scorecard Institute, 2011). Conclusion Wal-Mart is one of the most leading brands of the world. However in order to maintain its dominance and continue sustainability the organization must try to strengthen its position in the market so as to generate competitive advantage. The analysis of the case shows that the organization has a certain number of loopholes that arise in the areas of compliance as well as human resource practices being adopted at the organization. In order to emerge successful a holistic approach is needed from the top management of the organization. This approach should be based on creating a congenial atmosphere at the organization that would help motivate the employees. This assumes significance considering the fact that human resources are the most valuable assets of the organization and the success of an organization largely depends upon the efficiency of the employees of the organization. The company must also ensure strict adherence to norms of the regulatory authorities as it would ensure better positioning of the brand in the minds of the customers. Implementation of these strategies would not only help the firm avert the crisis situation but would also entail sustainable competitive advantage in the long run. References Balanced Scorecard Institute. (2011). Balanced Scorecard Basics. Retrieved June 27, 2011 from http://www.balancedscorecard.org/BSCResources/AbouttheBalancedScorecard/tabid/55/Default.aspx. Lawrence, A.T. & Weber, J. (2010). Business and Society: Stakeholders, Ethics, Public Policy. Tata McGraw-Hill Education. LI, Y. (2011). Walmart Business Model Study. Retrieved June 27, 2011 from http://www.ijaebm.iserp.org/archieves/1-D16-31-10/Vol-No.1-Issue-No.2/5-IJAEBM-Volume-No-1-Issue-No-2-Walmart-Business-Model-Study-093-097.pdf. International Journal of Advanced Economics and Business Management. Volume No. 1, Issue No. 2, 093-097. Mooney, L.A., Knox, D. & Schacht, C. (2010). Understanding Social Problems. Cengage Learning. Pride, W.M. & Ferrell, O.C. (2006). Marketing: concepts and strategies. Cengage Learning. Thompson, A.A., Strickland, A.J., Gamble, J.E. & Jain, A.K. (2006). Crafting and Executing Strategy 14E. Tata McGraw-Hill Education. Vedder, R. (2006). Bashing Wal-Mart. Retrieved June 27, 2011 from http://www.aei.org/article/23709. Wal-Mart. (No date). About Us. Retrieved June 27, 2011 from http://walmartstores.com/AboutUs/. Read More