Strategic HRM - Wal-Mart Company - Essay Example

? Strategic Human Resource Management Outline I. Introduction II. Thesis ment: A business strategy is the lifeline of a business organization that drives both the short- term and the long-term projection and determines the success of the business in an ever-changing business environment and stringent competition. III. Overview of Wal-Mart Company IV. Review of Wal-Mart Business Strategy V. Proposed Wal-Mart Business and Human Resource Strategy VI. Implementation Plan VII. Issues Pertaining Implementation of New Strategies VIII. Conclusion IX. Reference Introduction For the purpose of the analogy, the game in the business can be likened to that in sports. The only difference is that in the game of business, teams compete against one another for customers, innovations, employees, and ultimately the profit margin they are able to accrue at the end of the day. The other difference is the time frame, whereas in sports the game is over a defined period of time, in the business, the time frame is unlimited as long as the business exists. Just like in the sports, the business empires that win indicate consistency in their preparation, planning, and skills in their execution plans. These business organizations do understand best their positions, where they are aiming at, and how they want to achieve their aim. It is also important to note that these winning business firms have constant touch with the customers needs and how to comply, the technological advancement that are relevant to the business as well as the market trends and innovations that will enable them be ahead of the park compared to their competitors in the market (Wal-Mart, 2011). Business organization then have to keep pondering on how best the cardinal factors in the business can be best satisfied to make then take the lead in either service delivery or product delivery to the customers. In this regard, all business owes allegiance to a strategy either planned or unplanned, strategy in this case is the language that implies a game plan. A business strategy is the lifeline of a business organization that drives both the short- term and the long-term projection and determines the success of the business in an ever-changing business environment and stringent competition. Overview of Wal-Mart Company Wal-Mart boost of being one of the largest family owned multinational retail cooperation. It is an American company having been founded in 1962 by Sam Walton. Walton family is arguably the leading shareholders in the cooperation, as they own about 48% of the total share of the business empire. The incorporation of the business took place in the year 1969 and by 1972 its shares were floated in the New York Stock Exchange for public trading (Wal-Mart, 2011). The corporation was branded Wal-Mart in 2008 having relinquished its former name of Wal-Mart Stores, Inc. in pursuit of the Forbes Global 2000, Wal-Mart was ranked 18th in the perking order of the largest public corporations in the world and the leading in the US. The cooperation also employs about two million employees which makes it one of the world largest private employers. The headquarters of the business is at Bentonville, Arkansas. In the United States, it is considered one of the leading grocery retailers having in the year 2009 collected 51% of the total sales it realized in the year i.e. US$ 258 billions. This percentage sale was realized on the grocery sale alone. Wal-Mart scope of operation in the global is equally expansive, it has a total of 8,500 functioning store in 15 countries operating under different references. In the United States for instance, the company operates under the name Wal-Mart including the 50 states of the US. In India the company is called Best Price, Mexico, its called Walmex, in UK it’s referred to as Asda while in Japan, it is referred to as Seiyu. Wal-Mart has expansive and extensive operation in Canada, Brazil, and Argentina (Wal-Mart, 2011). While in the North America, the business has registered performance of varied results having successfully made prosperity in the UK, South America, and in China while in South Korea and Germany, the business performance has been dearly dismal. Review of Wal-Mart Business Strategy With the enormous size and complexity of the business cooperation in managing the global business, Wal-Mart has endeavored to consider a number of strategies to keep them in the business to avoid being pushed to the periphery by the fierce business competitors like Metro AG, Tesco PLC, Staples, Inc., and CVS Caremark Corporation. Like it has been said in the introduction, the business has to keep changing tact of carving a niche in terms of customer’s satisfaction, responsiveness, and the ability to reach even the most far ended customer in an effort to increase the customer base. Wal-Mart in this case has lived to the development of the unique strategies that can be attributed to its good performance that make it be on of the most expansive private business corporation in the world. In the Wal-Mart business strategies, a wide scope of the factors is integrated in the wholesome agenda of the strategy. The business strategies pursued by Wal-Mart is a culmination of the well diagnose SWOT analysis in which the business has faithfully and in a committed way analyzed their strengths, weaknesses, opportunity, and threats. Usually it is after this analysis that the business is able to device a strategy that conforms to its needs as far as meeting the demands of its esteem customers. The strengths of the business can be enumerated as; Wal-Mart has rigorously embraced the use of information technology in managing its expansive global logistics as it’s appreciated it operate in many countries with numerous branches. The business also enjoys the widespread reputation that has been tailored to the convenience it has given to the customers. The business have a variety of their products in one store and is known for giving the commensurate value to the cost of the products it retails. The company has also tremendously expanded in the recent years and has also heavily relied in harnessing the human resource. The company has also reckoned with the weaknesses it has in that it the business is very expansive and there are possibilities that other areas of the management will be ignored and this might be very detrimental to the business as the competitors might take advantage of the situation (Wal-Mart, 2011). Even thought he company is said to be in the global domain, its operations is limited to very few countries and this does not reflects the its true position as a global business corporation. In addition to this, the company’s involvement in several products may results into not much focus in some products promotion and competitors will have undue advantage with regard to this. In the same breadth, there are several opportunities for the business to experience rapid growth in the wider global market upon exploitation of the virgin market in the globe. Wal-Mart Marketing Strategies Marketing strategies as deemed by Wal-Mart is categorized into two broad levels, the customer according to the business is perceived as the most significant factor in the business, and they endeavor to have the interests of the customers satisfied first by provisions of what they want, at the right time when they want it at a specific value. The second factor is the spirit of association in which every one is seen as being important to the business and is believed to uniquely and positively contribute to the business growth and sustainability. Wal-Mart has also employed the strategy of tailoring their merchandise provisions to suit the specific needs of the people. This is aimed at widening the customer’s base by being flexible to the customers’ needs (Eberstein, 2010). The company has also strived to reach as many customers globally as possible by opening several stores. For instance, the company has created well above 125,000 jobs coupled with the 3,000 stores internationally and elevating their operations in almost 70 countries. Wal-Mart Business Strategy Any business irrespective of the size must develop a strategy that acts as a benchmark and provides direction to its operations and decisions. A business without a good strategy is bound to fail, as it will lack the strategic direction that is obligatory in the highly competitive environment where any slight positive difference counts substantively for the consumers. Wal-Mart in its retail business has the vision of remaining a giant in the industry by making sales at the lowest possible cost in the market through its low cost leadership strategy (Wal-Mart, 2011). Wal-Mart intends to remain in the retail business and continue to sell consumers goods. However, the company intends to expand its activities and the number of products it offers to the consumers as a way of maximizing their revenues and ensuring good performance. Currently Wal-Mart has started selling food products in its concentric strategy. The business has realized that food is a necessity and has wide market demand. Therefore, it is an important segment can earn a lot of revenue and attract many customers to Wal-Mart retailers. Moreover, the company has a multiple strategy in which it encourages the selling of multiple goods and products as a way of ensuring diversification and increasing of the product lines (Wal-Mart, 2011). In addition, Wal-Mart business strategy of pursuing a conglomerate strategy through selling of used cars, which is a completely different business (Wal-Mart, 2011). This strategy has been propelled by the need to diversify their operations and reduce potential risks that might arise to the company. Venturing in this product line has been viewed be experts as unnecessary and costly since the business will incur new costs by acquiring experts who may be expensive to higher and sustain. Halting operations from this line is fundamental for ensuring long-term growth and success. Wal-Mart also had the business strategy of extending their operations in new jurisdictions and countries. In internationalizing, a business must be careful to scan the environment using the environmental scanning techniques like PESTLE, SWOT and BCG matrix as a means if determining the challenges and upheavals that might hamper the business from achieving organizational objectives (Hill, 2009). Wal-Mart in pursuing this internationalization strategy will ensure that they increase her operations in the international market and increase the revenues from sales (Wal-Mart, 2011). However, the management must have the knowledge to determine that not all the regions have the same learning curve as that of US. Expansions in countries like Canada and England should be well monitored in order that this proposal is realized (Parnell & Lester, n.d.). Human Resource Strategy Human resource strategy forms an important province of the overall organizations strategy. The firm’s employees and workers are responsible for the execution of the organizations day-to-day operation hence making them the most important asset of any business. Wal-Mart in its strategy of improving performance and remaining dominant in the retail business therefore have to develop a human resources strategy that coincides to the achievement of its organizational goals (Boxall & Purcell, 2003). Employees whose welfare is not championed for or whose interest is neglected will become demotivated and may deter organizations success thus causing the general failure (Schuler, 2002). Wal-Mart human resource strategy has accounted for the firm’s global expansion and leading performance in the industry. By developing a good human resource strategy, the company has attracted qualified staff that joins and utilizes their expertise to further the achievement of the organization objectives (Richar & Johnson, 2001). In Wal-Mart, the proposal to align the human resource function with the organizations objectives is key in the business success journey. The human resource function should not only concentrate on the administration function of doing the routine employee function rather it must be formulated in a manner that it guarantees the long term success of the organization through enhancing the achievement of the overall organizations goals(Boxall & Purcell, 2003). All the HR function of Wal-Mart should therefore remain geared towards growth, profitability, and market leadership objectives of the firms. Additionally, Wal-Mart proposed strategy has taken into account their employees’ welfare hence preventing them from forming unions that would champion for their interests (Wei, 2006). By taking completely and adequately taking care of the demands of their employees, the company has barred the workers from forming trade unions that would bargain on their behalf and protect them from unfair treatment by the management. Workers whose interests are better looked into by the management will remain loyal and committed to the business thereby promoting the execution of the firm’s strategic success. By ensuring that their workforce does not unionize, Wal-Mart eliminated the possibility of employee riots and demonstrations that would hinder sales and smooth operations. In as much as trade unions are necessary in promoting the welfare of their members, there are cases in which it has overstepped its mandate and hindered the effectiveness of the workers. Many businesses have thus incurred huge losses by experiencing production stoppages and constant slow down. This has not been the case in Wal-Mart. Besides, Wal-Mart reward strategy of employee advancement has significantly contributed to the company’s success. Employee advancement will ensure that the organizations employees are promoted to higher positions, ranks, and positions. In the case of Wal-Mart, almost 65% of the company’s management was former cashiers whose remunerations were on hourly basis (Wal-Mart, 2011). The employees advanced to occupy any vacancies that arose from departure of top-level managers. This made Wal-Mart be voted as one of the best companies in the fortunes magazine. Promotion of employees also made the company retain its committed workforce and ensure that the organizations culture is adhered to. Employee promotion encourages maintenance of the business culture and consistency in customer service. The acquisition and retention human resource strategy also elementary in the success of a business. Any company that aims at realizing growth and becoming strategically positioned must have an inventory of high-qualified individuals with the desired attitude. To achieve this Wal-Mart, recruited from colleges and universities in order to attract expertise and dedicated workers. Beyond, this form of recruitment ensures that employees’ from diverse ethical, racial, geographical backgrounds become part of the company. Through this, Wal-Mart gets to understand the varied nature of their customers’ demands and tastes. The college students are also offered management training with a bid to make them prepared and developed immediately after graduation. This reduces the duration needed in making them match their technical skills with the work requirements a factor that has made Wal-Mart employees become effective and efficient in conducting their business (Wal-Mart, 2011). Besides, training and development has also become one of the cardinal objectives of the human resource strategy. Training ensures that the employees are granted the opportunity to learn and acquire new or fresh knowledge and skills needed in improving the quality of services or grasping completely new skills. Development on the other hand ensures that the employees’ skills and knowledge are sharpened to make them become pertinent for the organizations success. The strategy gears at augmenting employees’ confidence and enthusiasm. Apart from the human resource strategies that Wal-Mart has maintained, other human resource strategies that would be consistent with the company’s long-term objectives and goals. First, the company should introduce employee mentorship program in which the junior level employees would get to be mentioned with those at the higher-level management. This will ensure that the employees work as a team hence improving the relationships amongst the employees. Employees who are in teams also get to share their problems and counsel one another hence increasing the level of productivity. Wal-Mart reward strategy will also be pegged on performance. To make their employees remain dedicated towards the realization of the business growth and profitability, employee rewards will be based on performance whereby, employees who achieve their targets or who supersedes their set targets gets to earn bonus and other rewards. Similarly, employees’ promotion and upward mobility will be pivoted on the realization of employee’s success. This will make the employees committed and devoted in working for the business. The employee selection criteria should also be made competitive and open. This will ensure that Wal-Mart gets the most qualified and skilled workforce. By getting their employees through external sources, the business will have a large pool of skilled work force to choose from. It will also boost the image and reputation of the business, which could attract more customers and enable the business have the goodwill of the society. Another human resources strategy that is proposed by Wal-Mart is to make their employees have a share in the company profits. Modern and current organizations have moved towards the strategy of having their employees increase their revenues and profits, as this is the only feasible way for the company to increase its profitability. Through profit sharing scheme, employees will have direct interest in the performance of the business and hence make Wal-Mart retain its lead in the market. The impact of the human resource strategy on the success of Wal-Mart has been tremendous and remarkable. A casual observation of both financial performance and operational efficiency justifies the management human resource strategy. To begin with, the Wal-Mart has managed to retain their employees. Employee retention makes Wal-Mart maintain confidentiality of their strategies and makes the company enjoy lead in the retail business (Davis, 2001). The human resource strategy has also ensured that Wal-Mart remains ahead of the pack as they have remained enthusiastic and determined towards making Wal-Mart remain the market leader in the retail market. Implementation Plan Proposing a business and human resource strategy without actual implementation dies not add any value to the company’s achievements. The management of Wal-Mart therefore has the obligation of making an implementation plan that ensures the formulated plans are achieved within the period and that it yields the desired benefits. First, responsibility for every stage must be assigned to particular departments and positions (Heracleous, 2000). For instance, if the business strategy is to increase the market share, then the role of ensuring promotion of the company’s and marketing in new locations must be assigned to the marketing department or any relevant positions. The human resource strategy of ensuring motivation and rewarding of employees should be assigned to some organizations departments (Forgang, 2004). The role is to be assigned to this relevant department to ensure that there is no confusion on the roles required in making the change strategy work. Through assigning of this role the management can further make them accountable for their actions and will act as a benchmark of evaluating performance. This ensures that a particular individual or person is charged with specific mandate. After assigning responsibility to the various departments and positions, Wal-Mart has to allocate the required resources to the various departments as a way of ensuring they are empowered to execute their mandate. All the relevant departments that have been charged with the obligation of executing roles are given enough resources to make them do their activities and coordinate their necessary events that will bring change. Having the necessary resources will make the relevant departments exhibit the necessary autonomy in the execution of mandate. Allocation of resources will ensure that inefficiencies and delays are eradicated and that change takes place within the required deadline. It would also make the organization account for the way the resources have been used in realizing the business goals and objectives. Next, the management must communicate the strategies through consultation, training, and involvement of individuals and stakeholders. Training is meant for the workers of the business who are obligated to see the change process succeed. This stage ensures that the employee resistance and support is attained when pursuing the business strategies since there will be a common understanding of the organizational objectives (Greenwald & Kahn, 2005). Employees who comprehend the business strategy will be willing to sacrifice their efforts to ensure achievement of the goal. At the same time, training will ensure that the employees are acquainted with the relevant skills and knowledge required in the realization of the objectives. It will work as it will motivate the employees and at the same time make management win the support of the workforce. Finally, project management and arrangement in which the initiated projects and strategies are managed to ensure that plans are achieved immediately. The plan will be important in making sure that the formulated strategies are actually put into practice and that the deviations that might arise are corrected appropriately. This implementation plan should be flexible to allow for environmental and changes in the circumstances. Managing the process, will further make Wal-Mart Company identify challenges in time and take required measures to maintain track. If well implemented, Wal-Mart will achieve its strategic objectives and manage to maintain a lead in the retailing business. The strategy implementation stage is crucial in the realization of the business goals. The strategic objectives must be done within the set time frame by individuals with the essential qualification and commensurate level of commitment. Issues pertaining implementation of new strategies There are various issues that are crucial and important in the implementation of new strategies. Leadership Leadership is the act of influencing the subordinates so that they can work towards achieving organizational goals. In introducing new strategies, the act of inspiring the employees to embrace the changes in the strategies and to support the organization in the realization of the new strategic proposals is mandatory. A leader who has good communication ability and one who can boost the confidence of the employees in the realization of business objectives is important (Forgang, 2004). Moreover, good leadership will ensure that proper direction is given to the employees to avoid unnecessary confusion and diverted attention. Employees will look at their leader as a mirror, which they can use to copy and refer to at times of making decisions i.e. a leader must inspire the followers in ensuring that they act within the expectation of the organization. The leader must be supportive and ensure that employees are encouraged even when faced with enormous challengers and problems (Schuler, 2002). Wal-Mart leaders should therefore posses these good leadership traits to ensure that they achieve organizational success. Effective change management is indispensable for current organizations. Change is continuous and constant. An organization only has to embrace change within the shortest period in order to avoid becoming toppled by competitors. For businesses to survive and thrive in the in the rapidly changing and tumultuous environment, they require an agile workforce which can respond, adapt and perform effectively in the changing conditions. An agile workforce is one that can easily embrace the changing business environment and conform quickly to the new changes without hindering to the organizations performance (Sweet, 2002). An organization, just like Wal-Mart, must therefore develop affective change management behaviors amongst its employees. The process should incorporate leaders support, effective and timely communication, and success measures. If these steps are adhered to, the organization workforce will get the necessary agility for meeting the high standards of initiating change in order to make the company remain competitive and realize its strategic goals and objectives. To obtain agile employees, Wal-Mart must remain committed to employing highly talented individuals with the positive attitude of changing the manner of doing things. Agile workforce is able to alter the thinking in a rapid environment and develop better strategies that will survive the stringent competition. Agile workforces also have the ability of quickly grasping new concepts and ideas when training needs are required. In an industry where competition and change forms part of the business, organizations must develop strategies that will ensure it remains competitive and gains a market share in the operations (Parnell & Lester, n.d.). An agile workforce is thus not a luxury for Wal-Mart. Conclusion To remain a market leader in the retail business, Wal-Mart company must remain committed to the formulation of policies that would enable her thrive in the intensified competitive environment. The strategic business strategy of growth and expansion in the new markets requires an assiduous scanning of the environment to determine the risks involved and courses of action to pursue to overcome the innumerable challenges. Wal-Mart strategy is laudable since it has identified human resource as an important component towards the realization of the overall organization goals. In addition, developing an implementation plan that is measurable will assist the company in accessing performance within a good period and taking corrective measures. Change is a driving wheel in business and must only be embraced in order to succeed. References Boxall, PF & Purcell, J 2003, Strategy and human resource management, Houndmills, Basingstoke, Palgrave Macmillan, Hampshire. 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