Operations Management in Action in Wal-Mart - Term Paper Example

In addition, Wal-Mart is one of the most financially successful organizations worldwide, as well as topping the list of the biggest private employer companies, having more than two million workers. The Walton family controls up to 48% of Wal-Mart as its founding member was from the said family. Wal-Mart, whose headquarters is in Arkansas, has its shares publicly traded in the New York Stock Exchange since 1972 under the code NYSE: WMT. The company’s main revenue earner is its grocery retailing business, which generates up to 51% of the company’s entire sales.

In 2009, for instance, Wal-Mart’s grocery business generated impressive sales of up to $258 billion. In addition to running the Wal-Mart stores, Wal-Mart also operates the Sam’s Club retail warehousing units in the US (Frank, p. 14). Wal-Mart’s Operations Wal-Mart’s operations are based on the divisional structure, which encompasses three distinct divisions that are Sam’s Club, Wal-Mart Stores US and Wal-Mart International. These divisions are then split into different simplistic retail formats that include, among others, food and drugs, apparel stores; supercenters discount stores and general merchandise.

While for the most part, Wal-Mart has had successful operations in the UK, South and North America, and China, its operations have been largely unsuccessful in nations such as South Korea and Germany. Wal-Mart has over the last years engaged in massive campaigns aimed at boosting its operations and efficacy by buying off companies such as Vudu, an entertainment company, in 2010. In addition, up to 40% of product range available in Wal-Mart stores comes from private label brands, although Wal-Mart also produces its own goods through contracts with other manufacturers such as Cott Beverages.

Wal-Mart’s divisional operation structure entails separate and semi-autonomous divisions within the single corporation. As earlier cited, these include Sam’s Club, Wal-Mart Stores US and Wal-Mart International, Wal-Mart Realty and Superstores. All these divisions have individual goals and missions which are aligned to the overall mission of the entire group. The divisional operation structure of Wal-Mart entails an overall CEO who is also the chairman (Mike Duke) of the board of directors and under him there are directors and managers who oversee operations in individual company divisions.

All organizational functions of the company are grouped into divisions, and each division contains all necessary resources it requires. Wal-Mart’s divisional operation design is based on both geographical and product basis where stores in different nations are grouped in a single division and stores dealing in certain products or services are grouped in another division (Stevenson, p. 154). In Wal-Mart’s operations, all divisional managers are tasked with overseeing the daily control and decision-making regarding individual stores.

In addition, divisional managers are held accountable for divisions’ success or failures. All divisions have their own sales, marketing, engineering and accounting departments. This operational system is marred by a number of problems that will be highlighted in the subsequent section of this paper. Operations Management Problems Wal-Mart faces a number of critical issues as a result of its divisional opera