Control Mechanisms of Wal-Mart - Case Study Example

The internal audit of the Wal-mart involves asset protection. The auditors concentrate on making inventory process efficient in and over the USA. The loss due to shrink, theft, and any types of losses or damages are calculated and communicated to the store management to minimize the problems. There are 11 locations of internal audits in the USA. (http://walmart.feedroom.com/fr_story=FEEDROOM119269&rf=rss)The external audit of Wal-mart is responsible for consolidated annual financial statements and so the external auditor.

This financial reporting will be according to legally accepted accounting standards. The observation process involves the closed-door meetings of the management with external auditors. The external auditors have reasonable independence in preparing the financial statements to make the company's transactions transparent. The financial statements prepared by external auditors will be presented to shareholders. (Hector M, 2002)The market control mechanisms of Wal-mart involve the cost cuts and a global supply chain.

It controls the market by opening large scale supermarkets that sell at low cost and by partnering with local retailers. It establishes its presence in the large retail markets by opening stores that sell the products less than the prevailing prices. It concentrates on increasing profit and sales by decreasing the purchasing costs and profit percentage. In every location, the gigantic stores of Wal-mart are a success. (http://i.walmart.com/maint/)The financial control of Wal-mart involves reducing organizational debt and in course of time making the organization debt-free.

This is possible by maintaining enough cash flows for short term debts and partnering with local partners to establish new stores in new locations that minimize the credit taken from financial organizations. (http://i.walmart.com/maint/)Part CThe above-mentioned execution of control mechanisms shows an effect on planning, organizing, controlling, and leading of Wal-mart in its activities. These activities are concentrated on enhancing the exploration of supply chain management by using information systems.

This resulted in the application of information systems to support supply chain management in order to strengthen the control mechanisms. In the course of implementation, only the information systems are being re-engineered but not the business processes. This means the business processes dictate the information systems to be used. The business processes are planned to keep in view the satisfaction of the end-user and the relationship of retailers with suppliers.