Organizational Change of Walmart Incorporation - Term Paper Example

?Running head: organizational change Introduction Based on the stiff competition that is experienced in the international market, there is need for firms that aim at attaining a competitive edge to emulate various strategies in order to improve on their marketing activities. Taking into consideration the significance of employees as well as the management team in advancing the operations of the companies in the markets, there is need for ensuring a high level of motivation within an organization. It is worth to note that a company that maintains a culture of motivation among its workers is at a better position to put at bay it competitors regardless of the level of competition in the market. Apart from the increase in salaries, workers are motivated by various factors such as increased commission, training, freedom to join trade unions, training, gifts, holidays, promotion and increased responsibilities among other factors. On their part, the management team should ensure that employees are involved in the decision making process and that a proper management style is adopted. For example, employees should be provided with a chance to provide feedback on the various issues affecting their organization. In this way, they feel as part and parcel of the entity thus taking every measure to safeguard the image of the company. One of the notable global companies that have been successful in meeting the needs of its consumers at the local and international market is Walmart Stores Incorporation. Walmart Incorporation, a US based firm with over two million employees has not only maintained a strong brand but also it has created a stiff competition in the retail industry. This paper discusses the strategies that Walmart Company needs to emulate in order to bring change and bring about a transformation in the organization. Company Overview With its headquarters based in Bentonville US, Walmart Company was established in 1962 by Sam Walton. The company started to trade its shares in the New York Stock Exchange in 1972 thus making it to generate significant amount of capital that it used in its expansion strategies. Based on the effective leadership of Robson Walton and Doug McMillon, the chairman and the president respectively, the company has established more than 8,500 stores in 15 countries thus making it to effectively face off it competitors including Tesco and Target Companies. Due to its strong brand image and strong promotional and advertisement strategies, Walmart has continued to enjoy high sales and sustainable profitability. For example, in 2013, it generated total revenue of US$ 469.162 billion while its total net income stood at US$ 16.999 billion. Similarly, the company total assets in 2013 stood at US$ 203.105 billion while the operating income was US$ 27.801 billion. Walmart Stores US, the biggest division makes a significant contribution on the company sales. This is based on the establishment of wide range of products that meets high demand as the result of the US high population as well as quality brands that meets the needs of its customers. The three notable outlets that make up Walmart Stores US include Supercentres, Walmart market and Discount Stores (Lichtenstein, 2009). One of the key strategies that have made Walmart to attain a competitive position in the market is its focus of attracting large number of customers from various regions by introducing brands that matches with their cultural background. For example, in its effort to attract the Hispanic communities, the company established the Supermercado de Walmart in 2009 that offers wide range of food products among other brands that are highly demanded by the community. As a result, the company has maintained a strong positive relationship with the consumers an aspect that has made it to continue enjoying high sales and profits (Sandra and Scott, 1997). Other operating divisions for the company include Vudu, Walmart international, Sam’s Club and private label brands. Walmart major competitors include Kmart, Meijer, ShopKo and Target all of whom are based in North America. In the foreign markets, the company face stiff competition from firms such as the German based Aldi and Tesco, the largest retail outlet in UK. With its marketing slogan as low prices always, Walmart has continued to attract large number of customers most of who are motivated by the low prices as well as quality brands. Despite the recent global economic downturn, the company has continued to create significant job opportunities thus making it to increase the household incomes resulting to increased purchasing power of its consumers. Apart from the extensive promotion activities that have worked as the backbone of the firms’ success, Walmart engages in the corporate social responsibilities as a way of enhancing its image on the eyes of the public. For instance, the company has established Walmart Foundation that is aimed at undertaking charitable activities in US as well as in foreign markets. As a result of its contribution especially in improving the education level of the communities, the company has greatly improved the living standards of women and children in local and international markets. Diagnosis Despite its efforts to create a strong positive relationship with its employees and customers, Walmart has faced a number of ethical issues regarding its employees. As a result, the company has been engaged in lawsuits as the victims try to seek justice. Some of the notable issues that the company has been blamed for include poor working conditions, insufficient health care for the workers, failure to engage its employees in trade union affairs and low wages among others. For example, in 2013 the National Labor Relations Board indicated that due to the pressure that Walmart put on employees, the company did not allow the workers to engage on the Black Friday strikes and those who participated were dismissed from their duties. This indicates that the company has failed to recognize the rights of its employees an aspect that has not only increase the rate of labor turnover but also demotivation level of the workers. Even though Walmart has put significant number of flexible benefits, it continues to experience a high rate of turnover. This is based on the fact that the company workforce is unhappy making more than 70% of the employees to leave the company for greener pastures within the first year of their duties (Ingram et al, 2010). Despite being the largest employers in US, the company has been noted to have a low employment rates for the black individuals an aspect that has made it to be criticized by its rivals. Another major issue that has crested a negative image for Walmart Company in US and in foreign markets is gender discrimination. It is imperative to note that due to the current competition in the international market, firms should avoid cases of discriminating their employees on the basis of gender. Women employees have now turned to be equally productive as their male counterparts and thus companies cannot overlook their contributions. According to the Dukes versus Walmart Stores case, the company was said to have a high level of discrimination in terms of payment to the female employees. In addition, the company has large number of female workers who are paid on hourly basis but very few are involved in the management matters. As a result the rights of the female workers are not recognized thus reducing the productivity of the existing female workers while potential skilled employees are demotivated to join the company. According to Human Rights Corporate Equality Index, Walmart level of mistreating its employees increased from 14% in 2002 to 65% in 2006. This has not only created a negative image for the company but also it has acted as one of the major opportunity that the competitors are using to face off the company at the international market. Additionally, the company failure to uphold high level of ethics has resulted to emergence of critics from various groups and individuals. Notable criticisms have been raised by religious organizations, labor unions, environmental movements, community groups and customers among others. Apart from the gender discrimination and poor business practices, the company has been criticized for poor treatment of suppliers, unsustainable environmental practices, poor company security strategies and its foreign product sourcing strategies. With all these issues that may affect the position of the company in future if not timely addressed, there is need to come up with solutions will make the company retain its leadership position in the retail industry. Kotter’s 8-Step Approach In order to make a change that would transform Walmart operations, it is fundamental to employ the Kotter’s 8-Step Approach. Being a renowned change initiator, Kotter argues that regardless of the size of a firm, a small change greatly impacts on the entire performance of a company. Creating urgency Walmart management should develop a sense of urgency for the change. This implies that apart from indicating the stiff competition as a challenge to its operations, the management should be honest and come up with the strategies to address its current strategies (Kotter, 2008). This includes identifying the potential threats such as employees demotivation due to discrimination and low salaries. Thus the company should open a dialogue with its employees to discuss all the issues that affect the employees and come up with the solutions as fast as possible. As the first step, the entire management should be willing to change and adopt a new approach of dealing with the current challenges. Forming a strong coalition Despite the positive implications of a change for Walmart, it is essential that the management convince all the stakeholders to emulate the change. By initiating the change, the management team will portray to the public and the employees that it is on the track and that everyone will be involved. This entails inviting experts and other professional to give their contribution on how to improve the relationship between the company and the employees. Additionally, the company should ensure strong teams within the work place as a way of creating strong motivation among the workers. Creating a vision for change The company should create strategies that would be adopted to initiate the change. For example, the management team should undertake the evaluation of the employee’s salaries and the composition of the employees based on their gender. In addition, the company should establish a vision that would indicate a need to make a change. Vision communication It is imperative that during the day to day operations of the company, the vision of change is regularly communicated. This implies that apart from communicating in the meetings, management should frequently indicate the vision for change for example in the job advertisement in order to make the potential have a positive image of the company. Removal of obstacles Change is not always acceptable by all employees and managers. Thus it is vital for Walmart to remove the barriers that may hinder the implementation of the changes. This can be done by ensuring that the company hires renowned leaders to deliver the change. Additionally, the company should embark on rewarding the individuals who adopt the change and help the ones resisting change to see its benefits. Creation of short-term wins This means that during the process of change, the company should create short term targets. In this way, it would be possible for all the stakeholders to identify the wins that have been achieved thus becoming more motivated to progress with the whole process of change (Kotter, 1979). On its part, Walmart should for example evaluate the salaries of the female workers and make appropriate adjustment and then continue with the evaluation of the entire staff. Building on change It is fundamental to change but a firm must embark on a long-term change. This implies that an organization should make continuous improvements on its activities in order to attain the total change. Walmart Company should keep on analyzing the impact of change on each and every step in order to identify the areas that need to be improved. For example, to mitigate the poor relationship with its employees and customer, the company should establish a more effective expanded and competent customer care department. This would be followed by evaluating the way the department is working by checking the feedback from its customers and the employees. Making changes a corporate culture It is important that the company initiates the changes and makes them a culture. This implies that the change should not be limited to areas with drawbacks but also to other parts such as advertisement, research and development and social responsibility programs among others. In this way, the company will be viewed as a changed entity that is focused at improving all its activities. Conclusion Based on the above discussion, it is clear that the success of Walmart have not only been based on the company marketing strategies but also through the support of the employees. Through all its established outlets, the company has continued to offer quality brands that are not expensive. However, the company has for some time been faced with problems ranging from poor working conditions to discrimination in the workplaces. This has resulted to increased rate of turnover while at the same time the image of the company has deteriorated. The strategies that are aimed at transforming Walmart can be put in place through the use of the Kotter’s 8-step approach. References Ingram et al, (2010). Trouble in Store: Probes, Protests, and Store Openings by Wal?Mart, 1998–2007. American Journal of Sociology 116 (1): 53–92. Kotter, P. (1979). Organization - Texts, Cases, and Readings on the Management of Organizational Design and Change. New York: Irwin. Kotter, P. (2008). A Sense of Urgency. New York: Harvard Business School Publishing. Lichtenstein, N. (2009). The Retail Revolution: How Wal-Mart Created a Brave New World of Business. New York: Metropolitan Books. Sandra, S and Scott, V. (1997). Wal-Mart: A History of Sam Walton's Retail Phenomenon. New York: Twayne Publishers. Read More