Wal-Mart Market Strategies - Case Study Example

This together with the ‘open door policy’ states that management needed to consider the “associates” views in the decision-making process. Walton was against worker unionization and he argues that it would lead to the establishment of restrictive work regulations and dramatic pay hikes. Furthermore, he came up with the “sundown rule” which encouraged workers to complete their tasks on time (Hill and Jones, 2009). His policies were based on getting workers to perform to their level best while paying insufficient salaries. However, they would be rewarded with stock ownership plans and profit-sharing schemes. This strategy has worked for years nonetheless; it has been facing issues in recent times.

This strategy has led the company to great heights and sustained its exemplary financial performance over the years. Over the recent past, there have been various issues emerging from the application of this strategy (Anthony, Kacmar, and Perrewe, 2002). Wal-Mart is the private entity with the highest number of “associates” the world over. This has created numerous problems in human resource management. In the past, the company has been relying on the strategy of encouraging the employees to work hard with the promise of getting a promotion or incentives through stock ownership and profit sharing. This strategy has been regarded as being highly unfair as workers are exploited to work for long hours and they are not duly compensated for their contribution. Furthermore, it has been observed that the company rarely fulfills its promise of sharing its employees through profit sharing.

The company has been faced with several lawsuits over pressuring their employees to work for long hours without paying them overtime wages. Moreover, the company has been under attack for paying its employees peanuts and pressuring them to work too hard (Heskett, 2011). This has resulted in increasing dissatisfaction among the workforce and can be attributed to the decline in the company’s performance in the recent past. This policy is aimed at increasing the company’s productivity while ignoring the “associates” plight and contribution towards the company’s success. In most competitive firms, worker remuneration is based on output and this should be the case for the giant retailer. Labor unions have attempted to intervene but to no avail. The company’s “associates” are continually oppressed as its reputation and financial glory go down the drain.

Labor unions have made concerted efforts to unionize the employees over the years but they have fallen on deaf ears. Wal-Mart has been noted to be one of the few companies that have strongly opposed against unionization of the “associates”. The company management argues that labor unions champion increased salaries and impose strict working regulations (Heskett, 2011). This move is regarded to be highly capitalistic and aims at maximizing the company’s profits at the workers’ expense. This has created negative publicity concerning the company and if no immediate action is taken, it could have further detrimental effects on its profitability. In addition, the company has been on the receiving end of lawsuits over employee discrimination. On the other hand, the company attributes this negative publicity to faulty information, this may be the case but in fact, the company has grown immensely over time to be using Walton’s policies.

Firstly, the company should go easy on its anti-unionization policy and allow the employees to form and join labor unions. The company has been attacked on numerous occasions for its unfair labor laws. The company has been sued by the National Labor Board is this could end up costing the company a large sum of money. Over and above litigation costs, the company loses its reputation and credibility. Wal-Mart should stay away from legal fights with employees and labor unions as it generates negative attention. This will have detrimental effects on the company’s performance and complicate its strategy to venture into foreign labor markets that are unionized. The company should review its compensation system and institute one that is based on fair remuneration grounds. The company should be strict on its employee discrimination policies to ensure fairness and transparency in the recruitment and promotion of workers. The company should consider these matters to retain its outstanding performance.