Replacing Wal-Mart CEO Mike Duke with Target CEO Gregg W Steinhafel - Research Paper Example

Replacing Wal-Mart CEO Mike Duke with Target CEO Gregg W. Steinhafel The world’s largest retailer Wal-Mart is currently struggling to survive in the market even though their products are cheaply priced in the market. Even though, Wal-Mart has immense resources, they are currently struggling to counter the competition even from small retailers like Kmart. Its sales growth has come down drastically over the last few years. According to Bob Buchanan, a retail analyst with St. Louis-based A.G. Edwards, "Wal-Mart is not as crisp in their execution as they have been”( D'Innocenzio, 2005). Many people believe that Wal-Mart CEO Mike Duke has larger responsibilities for the pathetic conditions of Wal-Mart at present. So, replacing Mike Duke with another enthusiastic leader seems to be a better option for Wal-Mart to escape from the current crisis. In my opinion, Gregg W. Steinhafel, President of Target Corp seems to be a better replacement for Wal-Mart. This paper compares the personality and leadership styles of these two gentlemen and argues in favour of replacing Mike Duke with Gregg W. Steinhafel as CEO of Wal-Mart. Organizational problems of Wal-Mart Wal-Mart recently said it would pay a fine to settle federal charges that underage workers operated dangerous machinery, and it also agreed to pay $11 million to settle charges that its cleaning contractors hired illegal immigrants. Meanwhile, it faces a class action lawsuit by female employees who claim Wal-Mart discriminated against them because of their gender (D'Innocenzio, 2005) The morale of the Wal-Mart employees is not so good at present because of the different problems they forced to face in their workplace. Gender and racial discriminations are common at Wal-Mart workplaces and the organization seems to be silent over such issues. It is difficult for Wal-Mart to operate successfully with the traditional methods of business, especially in a globalized business environment. Globalization has created many changes in the business philosophies and principles and Wal-Mart seems to be keeping a blind eye towards such issues. They never tried to make any changes in their organizational setup, structure or behavior in order to fine tune their business policies. Even though, business opportunities are growing across the world, Wal-Mart failed to take advantage of it. “Recently, Wal-Mart actually pulled out of Germany and South Korea.  In other important countries, such as China, Wal-Mart is behind in market share to European competitors like Tesco and Carrefour” (Problems at Wal-Mart, 2007). Moreover, Wal-Mart so far failed to capitalize on the business opportunities provided by one of the rapidly emerging country India. Instead of trying to enter Indian markets independently, Wal-Mart trying to establish ties with the local entrepreneurs to exploit the business opportunities of India. In short, Wal-Mart failed miserably in exploiting the opportunities provided to it by globalization and liberalization and hence it drastically needs a new capable leadership. Mike Duke Vs. Gregg W. Steinhafel as CEO of Wal-Mart Wal-Mart President and CEO Mike Duke recently, laid out four strategies for building the Next Generation Wal-Mart: Become a truly global company; Understand the business challenges that retailers will face and solve them; Play an even bigger leadership role on social issues that matter to our customers; Keep our culture strong everywhere (Wal-Mart CEO Mike Duke Outlines Strategies for Building the "Next Generation Wal-Mart", 2010). On paper the above strategies seem to be good. But the fact is that Duke failed to unveil the clear policies necessary to attain the above objectives. In other words, Duke proposes so many things and disposes few. Duke’s vision and strategies are better for academic purposes, but for practical purpose, instead of verbal exercises, actions are required. Duke assured the stakeholders that the Wal-Mart company is well positioned for today’s economy and tomorrow’s changing world (Wal-Mart 2009 annual report, 2010). But the statistics are not supporting the claims of Duke. It is a fact that merger and acquisitions are some of the major business strategies implemented by the big companies to exploit the market opportunities. For example, Coke has recently acquired the Indian soft drink manufacturer, Thumps Up in order to exploit the market opportunities in India. At the same time Duke tried to establish collaboration with Bharti group in India instead of trying to acquire any major retailers from India. In other words, Duke do not have the courage to enter the Indian market independently even though, they have the largest capacity as a retailer in the world. In other words Duke never likes to take risks in business. He is playing the safe game. But such tactics are not suitable to exploit the retail market opportunities. Duke should have had inspiration taken from Microsoft to monopolize their business in the world. “Gregg W. Steinhafel has been President of Target Corp. since August 1999 and its Chief Executive Officer since May 01, 2008”( TARGET CORP, 2010). “In 2010, Fortune named Target one of the “world’s most admired companies,” and in 2009, Forbes ranked Target as one of “America’s most reputable companies” (Corporate governance, 2010). In short, Steinhafel became the CEO of Target Corporation in 2008, a year in which the recession started to strike the world. Even now many American companies are struggling to repair the damages caused by recession; however, Target Corporation remains one among the few retailers which escaped from recession. Moreover, it became one of the most admirable and reputable companies in the world at present. The above achievements were not possible, without the efficient leadership of Steinhafel. Steinhafel has been instrumental in developing and promoting Target’s unique corporate culture, in which 350,000 talented and diverse team members collaborate and innovate to make Target a fun and convenient shopping experience, providing access to highly differentiated products at affordable prices and sustaining the company’s heritage of community giving and social responsibility. Since 1946, the corporation has given 5 percent of its income to non-profit organizations that support the communities where Target does business. Today, that giving equals more than $3 million a week (Corporate governance, 2010). Unlike Duke’s achievements, Steinhafel’s achievements are not lying on papers alone, but it is reflected in the growth of Target Corporation. Steinhafel is not claiming much publicly like Mike Duke. He is not doing anything to boost his image. But he acts silently and brings much better results than Duke. During his school days, Mike Duke was more interested in mathematics and science. Basically Duke is an industrial engineering graduate whereas Steinhafel is a management graduate. Because of the above differences in academic qualifications, Duke seems to be better in engineering mathematics than business mathematics or statistics. In business, Statistical Mathematics is more important than ordinary Mathematics like Arithmetic or Calculus. Steinhafel seems to be smarter than Duke in statistics which is reflected in his achievements. Duke is 60 years old now whereas Steinhafel is 55 now. Duke is comparatively elder than Steinhafel and hence most of his business philosophies are older than that of Steinhafel. In order to put Wal-Mart back on track, new leadership and new ideas are required. Conclusions Gregg W. Steinhafel could be a better CEO for Wal-Mart than Mike Duke. Steinhafel is younger than Duke and hence he can generate fresh ideas for the growth of Wal-Mart. Duke is not taking any risk in business and he is relying heavily on the conventional business principles whereas Steinhafel is more aggressive than Duke and he can formulate better strategies for Wal-Mart in order to exploit the globalization opportunities. Most of Duke’s claims are remaining on papers only. Duke is not exploiting the opportunities adequately even though Wal-Mart has immense resources available to monopolize the retail market. On the other hand, Steinhafel was able to exploit the fewer resources available to target Corporation in a better manner which is reflected in its current performances. In short, Steinhafel could be a better CEO than Duke for Wal-Mart References 1. Corporate governance, (2010). Retrieved from http://investors.target.com/phoenix.zhtml?c=65828&p=irol-govBio&ID=69584 2. D'Innocenzio, A. (2005). WalMart struggles with deeper problems. Retrieved from http://wakeupwalmart.com/news/20050519-ap.html 3. Problems at Wal-Mart.(2007). Retrieved from http://mgmt339.wordpress.com/2007/03/28/problems-at-wal-mart/ 4. TARGET CORP, (2010). BusinessWeek. 29 November 2010. Retrieved from http://investing.businessweek.com/businessweek/research/stocks/people/person.asp?personId=174446&ticker=TGT:US 5. Walmart CEO Mike Duke Outlines Strategies for Building the "Next Generation Walmart". (2010). Retrieved from http://walmartstores.com/pressroom/news/9974.aspx 6. Walmart 2009 annual report, (2010). Retrieved from http://walmartstores.com/sites/AnnualReport/2009/letter.html Read More