Improper Organizational and Managerial Policies at Wal-Mart - Case Study Example

Running Head: Improper Policies at Wal-Mart Improper Organizational and Managerial Policies at Wal-Mart Leading to Negative Media Attacks and Disgruntled Employees By YOU YOUR ACADEMIC ORGANIZATION HERE YOUR INSTRUCTOR HERE December 16, 2007 Improper Organizational and Managerial Policies at Wal-Mart Introduction In recent years, the retail giant Wal-Mart has been inundated with negative media attacks and a barrage of commentaries from disgruntled associates who allege the firm to maintain policies which do not protect the interests of its employees. Despite the company’s ongoing, publicized statements which indicate its strong initiatives for boosting employee motivation and its alleged commitment to positive managerial activities, the firm appears to remain unable to create a positive internal culture. Within the modern organization, building optimistic policies to boost staff motivation is a primary element to increased profitability and positive public image. Despite this fact, Wal-Mart requires a new approach to motivation, managing organizational change, and the development of a strong organizational culture in which employees can thrive and be satisfied. Motivational Activities The contemporary definition of motivation is described as a series of environmental and organizational conditions responsible for intense, persistent focus on quality designed to promote desirable employee behavior (Landy & Conte, 2006). Wal-Mart continuously touts its progressive policies designed to boost employee motivation and morale, including its alleged commitment to satisfying issues of employee diversity, building a more streamlined health care system, and the promise of a fair and flexible system of subordinate employee scheduling. For instance, in 2005 the company’s Executive Vice President of Benefits attempted to publicize its new health care system which included an associate health savings account so as to offset the costs of rising health care (walmartwatch.com, 2005). Heralded as a new system partially designed to increase the motivation of potential candidates interested in considering Wal-Mart as a viable employment option, this system has met with considerable employee resistance, forcing some existing employees to leave the firm in favor of different employment. The reason: In a rather secretive memo submitted to the Board of Directors, Ms. Chambers suggested that the health care savings account was primarily a move to decrease corporate health care contributions and would provide the firm with a healthier associate staff to as to “dissuade unhealthy people from coming to work at Wal-Mart” (Chambers, 2005). When this memorandum was released to the staff of Wal-Mart, it clearly indicated that the firm recognized its profit margin over that of the motivational well-being of its employee population. Referring back to the notion that modern theories of motivation consist of company attempts to promote desirable employee behavior, Wal-Mart seriously missed the mark on its new health care savings program which appears to have angered and frustrated the firm’s associates to the point of considering a more viable and honest employer. In addition, in relation to the company’s failure to motivate, Wal-Mart makes considerable mention of employee diversity in its annual reports, and has been cited by researchers as being a leader in using diversity policies as a means to motivate staff members to achieve higher levels of productivity and performance (Boone & Kurtz, 2006). The company further suggests that diversity is a key element in attempting to satisfy the needs of its employees (Wal-Mart Annual Report, 2007). Some of its more unique policies include its recent corporate policy changes to include same-sex benefits and rewarding charity volunteerism (Boone & Kurtz). Despite the aforementioned corporate changes related to diversity, which appear to have been initially applauded by many of its North American employees, the company has exhibited a lack of flexibility in using charity involvement as a means to motivate employees to continue to herald their association with the firm. For instance, in 2004, many U.S. Wal-Mart stores forbade the Salvation Army from establishing a presence outside of their retail facilities, with many managers informing the staff to notify leadership if the charity bell-ringers returned so that they could be removed. The rationale for this move: Customers complained that the ringing was uncomfortable to listen to, thus Wal-Mart sent the message to its employees that profits come before charity, despite their policies to the contrary (Clarkson, 2005). Though it is unclear whether these policies have been changed to allow future charitable organizations to solicit Wal-Mart facilities, the damage to employee morale in relation to volunteerism is quite obviously negative. Managing Organizational Change Wal-Mart, like any other retail giant, experiences routine changes in its senior-level leadership as well as that of in-store middle management. In fact, in the company’s 2007 Annual Report, Wal-Mart illustrates a series of executive managers who actually started as associates or other subordinate staff members in order to highlight the enormous growth opportunities within the firm. However, is the company’s publicized example of promoting from within a true and realistic picture of what occurs as part of their leadership change initiatives? Nickels, McHugh & McHugh (2005) offer an interesting definition of adapting to internal changes in management by suggesting that managers might say they have 20 years of experience, when in reality they’ve had only one year’s experience 20 times over. This bold statement tends to illustrate that large companies, such as Wal-Mart, remain fixated on performing internal operations using the same methodology, thus their managers are ill-equipped to handle contemporary changes in the business, such as recognizing employee values or adapting to difficult staffing problems. Wal-Mart appears to be a prime example of where this is occurring. In 2001, a class-action lawsuit was brought up against the firm by a variety of women who worked for the self-proclaimed progressive organization, however these plaintiffs allege that they were denied opportunities for advancement on multiple occasions (Wal-Mart Annual Report, 2007). A portion of managing change, especially when internal leadership decisions are made, must take into account the levels of experience and competency of the candidates, completely dismissing issues such as gender. Failure to adapt to modern beliefs regarding the value of women as leaders in the organization not only created a lack of internal staff cohesion, but cost the company considerable revenue when the judgment fell in favor of the women who had brought up the lawsuit. Thus, this is one example where failure to adapt to positive (and fair) organizational change further damaged the reputation of the company as a leader in progressive promotional decisions. In addition, organizational change also includes making a series of decisions within the organization and then ensuring that staff members are not resistant to the new methods of performing business activities. It would appear that some members of Wal-Mart middle management have been unable to do so, thus creating rifts between associate-level staff members and the management team responsible for their well-being. As many large companies are likely unwilling to discuss such failures in corporate documents, there is little research available highlighting these failures. However, one particular instance points toward Wal-Mart managers’ failing to communicate the company’s new initiatives for protecting the environment, thus angering consumers and a particular employee reprimanded for unknowingly violating environmental policies (due to communication errors on behalf of management). The situation involved a customer who, in attempts to save the environment, refused to allow his purchased goods to be placed in a plastic bag. The clerk, apparently unaware that this was an acceptable request, refused the request citing that she “had to put them [the merchandise] in the bag so that the greeter knew [the customer] paid” (icwt.us, 2007). A rather heated debate with the cashier ensued, leading to management’s improper decision to contact the local police, who showed up at the store in response to allegations of customer-initiated abuse. The aforementioned may seem to be a rather outrageous example of failing to adapt to change management, in relation to communicating and enforcing new policies, however what might be deemed as being a rather ridiculous middle-management failure tends to indicate that many of the firm’s in-store managers are oblivious toward the proper methodology for dealing with change policies. Part of management responsibility is to ensure that all staff members are aware of Wal-Mart’s environmental policies, thus through this failure they have likely retained a very angry and frustrated customer who was asked never to return to the store again (icwt.us). An Unsatisfactory Organizational Culture Culture is described as a “system in which individuals share meanings and common ways of viewing events” (Landy & Conte, 2006: 590). This definition tends to suggest that within the organization, creating positive momentum relies on finding some sort of common belief or purpose through which all employees can relate and embrace. Wal-Mart has repeatedly experienced a barrage of lawsuits which indicate that the management within U.S.-based stores is ill-equipped to provide subordinate associates with a positive organizational culture. One specific lawsuit, despite the illegal aspects of this act, alleged Wal-Mart stores of repeatedly denying employees their legally-mandated, 30-minute lunch break due to management failure to schedule employees appropriately to match peak customer times (Wal-Mart Annual Report, 2007). Further adding insult to this alleged injury, many of these managers not only denied the break-times, but also forced employees to work off-the-clock, thus denying them compensation for their continued work. Despite the fact that Wal-Mart continuously promotes its ongoing commitment to satisfying the needs of its associates as a primary element to corporate success, failure to tangibly recognize the basic requirements of the firm’s workers lays the foundation of an organizational culture that is built around satisfying the profitability needs of the firm above and beyond offering subordinates respect and what is likely much-needed rest from strenuous work environments. Thus, there is the indication that Wal-Mart’s management teams share their own values and cultures (whether directed by senior-level management or self-determined), while associates maintain an ongoing battle to merely secure their legal rights as employees. Integrity in business requires a supportive organizational culture (Longenecker, Moore, Petty & Palich, 2006: 40). With this statement in mind, situations such as the aforementioned tend to support the media and employee-elicited negativity regarding Wal-Mart that many of its leaders lack this personal sense of honor, thus reducing the firm’s public image and creating a culture where employees perceive that it is themselves against leadership in sustained battles to secure that subordinates are treated with dignity and courtesy. In fact, Wal-Mart’s 2005 formal Code of Ethics states, in relation to its associates, “Wal-Mart Associates should treat each other with dignity and respect” (Walton, 2005: 13). There is not, however, any mention of management interaction with its associates in similar context. Perhaps, though a rather subjective assessment, this failure to recognize associate-manager relationships lays the foundation for its failures to create a positive and worthwhile culture. Conclusion Though it might be considered somewhat unfair or unjust to allege that Wal-Mart maintains no positive aspects in relation to establishing proper motivational, change management, or cultural characteristics, substantial evidence exists which highlights that many of its stores and leaders require additional training on how to best satisfy both its subordinate staff members and to maintain a positive public image. Clearly, the evidence points toward an organization in which what is said, in relation to the distribution of corporate documents and policies, is far different than what is actually performed internally. In addition, with the somewhat commonly-understand perception, from a human resources perspective, that employees are integral components to success in any retail industry, it is somewhat baffling as to why Wal-Mart appears to value its corporate bottom-line for profitability over the sustained well-being of its employee population. Wal-Mart developed several policies to motivate workers, such as the implementation of same-sex benefits and innovative health care policies, however the firm’s policies do not appear to create any visible morale stemming from its workers. Further, poor managerial adaptation to policy changes such as failure to communicate these alterations, not only frustrate the employee but also serve to jeopardize future relationships with the customer. It is quite clear, in similar respect, that Wal-Mart must adjust its current operating policies as they relate to the associate population if they hope to establish a future organizational culture in which all members involved in this particular retail business can be satisfied and ready to assist in Wal-Mart productivity and profitability. References Boone, L. & Kurtz, D. (2006). Contemporary Marketing. 13th ed. Thomson South-Western, United States. Chambers, Susan. (2005). ‘Reviewing and Revising Wal-Mart’s Benefits Strategy’. Memorandum to the Board of Directors. Retrieved December 14, 2007 from http://walmartwatch.com/img/sitestream/docs/Susan_Chambers_Memo_to_Wal-Mart_Board.pdf Clarkson, A.C. (2005). 101 Mistakes in the Retail Industry: And How to Avoid Them. Harper Collins: 102-103. icwt.us. (2007). ‘Wal-Mart Hates the Environment…and Now Me, Too”. ICWT – In Corruption We Trust. Retrieved December 13, 2007 from http://www.icwt.us/index.php/category/companies-and-brands/wal-mart/ Landy, F. & Conte, J. (2006). Work in the 21st Century: An Introduction to Industrial and Organizational Psychology. 2nd ed. Blackwell Publishing: 590. Longenecker, J., Moore, C., Petty, J.W. & Palich, L. (2006). Small Business Management: An Entrepreneurial Emphasis. Thomson South-Western: 40. Nickels, W., McHugh, J. & McHugh, S. (2005). Understanding Business. 7th ed. McGraw-Hill Irwin, New York: 257. Wal-Mart Annual Report. (2007). Lee Scott – President & CEO. Retrieved December 13, 2007 from http://www.walmartstores.com/Files/2007_annual_report.pdf Walmartwatch.com. (2005). ‘Wal-Mart’s New Health Care Changes’. Retrieved December 14, 2007 from http://walmartwatch.com/blog/archives/wal_marts_new_health_care_changes/ Walton, S. Robson. (2005). ‘Wal-Mart Statement of Ethics’. Retrieved December 13, 2007 from http://media.corporateir.net/media_files/IROL/11/112761/corpgov/Ethics%20_Current.pdf Read More