The Benefit of Organizational Structure within Corporations - Case Study Example

The Benefit of Organizational Structure within Corporations Table of Contents Introduction 3 Background of the Problem 4 Previously Used Strategies5 Recommendations 7 Conclusion 9 Future Research 10 10 Works Cited 11 Introduction Organizational behavior is a subject related with the activities of the management. It is principally concerned with comprehending, envisaging as well as influencing the behavior of the individual in the context of an organizational setting. The main features of organizational behavior are that it offers valuable insights into the growth and the development of the workforce towards effective performance. The main objective of organizational behavior is to clarify and to comprehend the behavior of the individual as well as groups in an organization. It is the relationship in between the human factors and formal organisation components that have led to the formation of the organizational behavior. Furthermore, organizational behavior is revealed by means of group cohesiveness, conflicts, group dynamics, and changes in the organizational context as well as adoptions to the occurring changes. It can be identified as a scientific method so that the behavior of the people can be controlled and forecasted (McShane, S. L. & Et. Al, “Organizational Behavior”). The key intention of the paper is to identify organizational behavior related issue faced by an organization. The company that has been chosen for the study is Wal-Mart. Therefore, in the paper it will be endeavored to select issues related to organizational behavior faced by Wal-Mart in the recent times. Subsequently, the previously employed strategies used by the company in order to resolve the issues will be observed. However, the primary focus of paper will be to provide adequate recommendations to the CEO of Wal-Mart, Mike Duke, so that the company can improve its operations and therefore enhance the efficiency and the effectiveness to a great extent. It is a well known fact that the problems within an organization tend to hamper the productivity to a considerable extent. Therefore, the companies must try to overcome the issues as soon as possible. Background of the Problem At present, Wal-Mart can be recognized as a giant retail organization throughout the world. It is known as one of the biggest employers among several other retailing enterprises. But the company has faced several organizational behavior related problems and one of the most important of them has been employee job dissatisfaction. With millions of employees internationally, Wal-Mart had confronted with several criticisms and lawsuits for ineffective management of the workforce. The major problem with respect to employee job dissatisfaction in Wal-Mart has been the low wages. It has been observed that the wages of Wal-Mart’s sales personnel, clerks, team leaders, overnight workers were low compared to national average. Besides, it has also been observed that women in certain particular positions had less earning compared to similar position of men. The living wage of Wal-Mart was almost 26%–37% less than other retail organizations in the same field. It has resulted in low job satisfaction of employees (Mesa Community College, “Is Wal-Mart Ethical?”). The other organizational behavioral issue in Wal-Mart has been violation of “Fair Labor Standards Act”. Wal-Mart had severely violated the wage and the hour regulations enacted by the Federal government. In many cases, Wal-Mart has failed to remunerate extra wages to the overtime employees. Employees of Wal-Mart were bound to work beyond the regular hours, miss the launch periods and breaks due to tremendous work pressure, while the management regulated the time and the wage registers to reduce the labor cost. It has been alleged that the company has concealed the proofs of dishonest organizational practices to evade the liability (IQ Unions, “Corporate Watch: Walmart”). Generally, organizations that have over 5000 employees are bound to receive the health benefits, but majority of employees in Wal-Mart were unable to afford them due to low wages. From the year 2000 to 2005, the price of health premium for the Wal-Mart’s employees had been increased by 169% on behalf of individual coverage and by 117% for complete family coverage. Therefore, it was difficult for workers to take the advantages of insurance benefits. Besides, Wal-Mart had inspired employees to find out governmental health benefits schemes (Ludensky, “Wal-Mart’s Labor Problem”). These unethical organizational behavior practices had resulted in higher employee dissatisfaction in the Wal-Mart stores. The evidence of employees’ unhappiness in the job can be observed by high turnover rate. Almost 70% employees left the job after one year due to absence of appreciation and unsatisfactory pay. The employee dissatisfaction factor has harmed the company reputation quite seriously and is needed to be considered carefully by the CEO (Public Broadcasting Service, “Working for Wal-Mart”). Previously Used Strategies Wal-Mart has employed business strategies that are generally based on offering products with lower cost. It provides more importance on the sales volume in order to place the company in a strong position among other competitors. Though the company’s rules prevented overtime works, it has been observed that the employees worked almost 5 to 15 hours extra in a week. Wal-Mart had appropriate strategy for “off-the-clock” work, break for lunch and recreation, overtime wages, termination wages, minimum wage requirements and wages for juveniles. In order to prevent the employees’ leaving the workplace before the scheduled time, Wal-Mart used to shut the door which had created dissatisfaction among the employees and generated a bad reputation for the company. Wal-Mart has unique strategies to reduce the labor expenses and keep the product cost down. Wal-Mart used the “Time card” strategy in the employment to ensure that the employees only work for 40 hours in a week and it removed the records of extra work hours and regulated the expenses on wages (IBS Center for Management Research, “The Darker Side of Wal-Mart’s Culture”). The previously used strategies of Wal-Mart also include the policies on insurance benefits. The company used blend of insurance for several threats which comprised of general obligation, vehicle responsibility, and assurance for health care advantages (Wal-Mart, “Self-Insurance”). Wal-Mart did not support labor union in the work place. The reason for keeping union away from the workplace is to control the costs because generally labor unions attempt to preserve the benefits of employees which can have an impact on the expenses. According to the management of Wal-Mart, keeping labor unions away from the place of work can help the company to manage human resources appropriately towards the objectives as well as employees’ benefits and as a consequence employees will be happy and satisfied (Greenhouse, “Labor Opens a Drive to Organize Wal-Mart”). The strategic objectives of Wal-Mart have been to increase its business in the USA as well as in other international destinations. The approaches of the company had been developed in such a way so that it can gain a positive brand image in the retail industry and good impression in the market by providing inexpensive products. The strategies of Wal-Mart have helped the company to achieve competitive advantage in the market but as a consequence it had also raised several organizational behavior issues such as low employee satisfaction (Hayden & Et. Al., “Wal-Mart Company Strategy”). Recommendations The managers of the recent times are confronted with numerous problems because of global competition, diversity, and knowledge and information explosion among other related matters. In the above sections, it is noted that Wal-Mart faced the issues related to unacceptable health insurance coverage and the company was also found to be violating the wage-and-hour laws. This leads to higher job dissatisfaction among the employees of the company. Implementation of the effective human resource strategies in order to enhance the performance and the accountability of the organization are the significant tasks of the CEO of the company. It is often observed that higher the job satisfaction, the better is the job performance of the employees. The organizational policies must be such that the output of the organization is enhanced and therefore the rate of absenteeism as well as turnover because of employee’s dissatisfaction with the job can be reduced (Kim, “Participative Management and Job Satisfaction: Lessons for Management Leadership”). The employees of Wal-Mart are not capable of paying their healthcare coverage premiums because of low wages and rise in the cost of the premiums by 169 percent. The CEO of the company, Mike Duke needs to maintain minimum monetary wage as well as fringe benefits that need to be paid to the employees according to the prevailing rates of the industry. He needs to ensure that the company is complying with minimum wage rates that have been set out in the ILO Minimum Wage Fixing Convention 1970. It is quite significant that the employees are paid competitively according to the local markets else the rate of turnover may be high in the company (Pember & Dupre, “Statistical Aspects of Minimum Wage Determination”). The CEO, Mike Duke needs to ensure that the company is providing its wage-earners with required social protection in terms of least permissible rates of wages. It can be argued that if the company pays due attention towards the minimum wage laws, then it will be capable of working more efficiently because such laws will help the company to satisfy the employees to a great extent. This law will assist the company to maintain the standard level of wages to be paid to the employees. Furthermore, the company needs to reduce the cost of premiums so that the employees are capable of paying the premiums without any hindrances. Mike Duke needs to ensure that the managers do not force the employees to opt for such health insurance programs until and unless the workers have agreed to them. The organizational culture has a role to play in ensuring job satisfaction for the employees. It is poor organizational culture that gives rise to numerous problems in the organization. Mike Duke needs to make certain that the company is not engaged in improper labor practices in order to reduce the labor costs. Such actions not only invite lawsuits but also reduce the morale of the employees and the reputation of the company is hampered to a greater extent. In addition to these, it is quite significant for the CEO of the company to instill internal feedback system in an organization. The employee must be surveyed on a continuous basis to identify if they are satisfied with the job or not. Such surveys encourage the employees to express their suppressed feelings and desires and therefore the company will be capable of acting upon the matter accordingly and thus boost the morale of the employees. Conclusion Creation of a satisfactory working condition by providing the workers with the required benefits in terms of pay, perks and recognition are the pre-requisites of a healthy organization. However, along with the necessary benefits to be paid to the employee, it is also significant for the companies to have an ambience of cooperation and mutual understanding. It is the top level management that has a role to play in fostering healthy working environment. The work environment is a critical component in determining the satisfaction of the employees. Job dissatisfaction often leads to innumerable organizational related problems that ultimately ensure cost to the organization in terms of low performance as well as reduced output. By understanding the job-related attitude of the employees, the top level managers will be capable of cultivating a positive work environment. Wal-Mart needs to create a work environment in which the employees believe that they can perform their jobs to the best of their abilities. The problems that the employees face have been related to compensation which is considered as one of the most significant job satisfaction aspects for the employees. Effective communication in an organization is considered to be a significant factor in resolving most of the issues faced within the organization (Saari & Judge, “Employee Attitude and Job Satisfaction”). Future Research Understanding individual behavior is considered as one of the most difficult tasks in any organization. Different people possess distinct behaviors and thus it is the complex behavior that may give rise to the organizational behavior related issues. When conducting similar studies in the near future, it will be significant to identify if the strategies that have been suggested in the sections above were implemented effectively by the company. Furthermore, the impact of the strategies recommended also needs to be gauged since it will assist the researcher in identifying the effectiveness of the strategy. It will also assist the researcher in coming up with more improved suggestion to the problems encountered by the company. The study took into consideration the impact of the issues on job satisfaction of the employees. In order to widen the scope of the study it is quite significant to have a thorough study on impact of the employee attitudes as well as job satisfaction upon the customers’ satisfaction and their finance. By gaining deeper insights onto the relationship between the employee attitude as well as the business performance, it will help the CEOs of companies because they endeavor to ensure contented workforce in a highly competitive environment. Works Cited Greenhouse, Steven. “Labor Opens a Drive to Organize Wal-Mart”. December 17, 2011. The New York Times Company, 2002. Hayden, Patrick. & Et. Al. “Wal-Mart Company Strategy”. December 17, 2011. Wal-Mart: Staying on Top of the Fortune 500, 2002. IQ Unions. “Corporate Watch: Walmart”. December 17, 2011. The Heartbit of America, No Date. IBS Center for Management Research. “The Darker Side of Wal-Mart’s Culture”. December 17, 2011. The Good and Bad of Wal-Marts Culture, 2003. Kim, Soonhee. “Participative Management and Job Satisfaction: Lessons for Management Leadership”. Public Administration Review 62.2 (2002): 231-241. Ludensky, Aaron. “Wal-Mart’s Labor Problem”. December 17, 2011. Campus Progress, 2008. Mesa Community College. “Is Wal-Mart Ethical?”. December 17, 2011. ABC’s Good Morning America, 2009. McShane, Steven, L. & Et. Al. Organisational Behavior. Tata McGraw-Hill, 2008. Public Broadcasting Service. “Working for Wal-Mart”. December 17, 2011. Business Practices, No Date. Pember, Robert J. & Dupre, Marie-Therese. “Statistical Aspects of Minimum Wage Determination”. December 17, 2011. Summary, 1996. Saari, Lisa M. & Judge, Timothy A. “Employee Attitudes and Job Satisfaction”. Human Resource Management 43.4 (2004): 395-407. Wal-Mart. “Self-Insurance”. December 17, 2011. Annual Report, 2009. Read More