Organizational Behavior Concepts in Wal-Mart - Essay Example

Topic: Successful or/and unsuccessful application of organizational behavior concepts in Wal-Mart Introduction Organizational behavior is defined as a study and deployment of knowledge about how people, individuals, and groups such trade unions act in organizations. Thus organizational behavior is connected with particular behavioral tendencies of members of an organization. People within the organization belong to a system of culture and therefore they all act in accordance with a set of rules and regulations with a view to achieving organizational goals - e.g. profits, higher sales, stakeholder satisfaction, shareholders' value, increase in share price, increase in the market value of the firm and so on. Concepts that are inevitably connected with organizational behavior are those which have a direct impact on the above corporate objectives of the organization. The most common among these concepts are the organizational culture, effectiveness, diversity, learning, efficiency and communication. Wal-Mart has been well known for its unique Human Resource Management (HRM) practices, extremely democratic organizational structure/culture and highly successful employee motivation strategies. Organizational culture consists of both the individual and collective characteristics of the employees within the organization. "Organizational culture is a pattern of knowledge, belief, and behaviorit is the form, beliefs, norms, social patterns, the way things are done, the symbols and rituals" (Burton, Lauridsen, & Obel, 2004). Analysis Organizational behavior and its associated concepts of Wal-Mart have to be examined against its HRM practices, organizational structure and employee motivation strategies which in turn depend on other variables such as the impact of globalization on the business, government rules and regulations, market demand for and supply of factors of production such as labor and the level of competition. The geographical and occupational mobility of labor also matters. Wal-Mart with a workforce of roughly 2.1 million is the biggest public company in the world by revenue, i.e. US $400 billion (approximately) in 2008. These staggering figures apart the giant grocery retailer has been looked upon as the model American business organization by many analysts and industry experts. Theoretical underpinnings about organizational behavior and the related concepts have been evolving over the years from Taylor's scientific management theory, through human relations theories and theory X and theory Y people to the modern day behavioral theories. This historical delineation signifies a number of aspects about the conceptualization of organizational behavior in the modern business context. Thus a particularly important aspect of leadership research in the sphere of organizational behavior is focused on Social Identity Model of Organizational Leadership (SIMOL). SIMOL is currently in vogue for the sole reason that it serves not only as a behavioral approach to organizational culture but also as a contingency model to study leadership (Kramer and Staw, Editors, 2003, p.283). Its relevance to this analysis lies in the correlation between the organizational behavior concepts such as organizational communication and diversity and corporate objectives such as profits and market share. Next theoretical postulate which has a significant bearing on organizational behavior concepts is the leadership style and the latter with a considerable amount of complexity applies to a variety of business contexts. For instance leadership style in Wal-Mart is characterized by a degree of democratic delegation of freedom to the staff to take decisions at the operational level. This aspect of the organization is subject to critical analysis for it obviously presumes that organizational behavior engenders a series of culture-centric responses to the external strategic environment including that of competitors' behavior. Corporate strategy in this particular context plays a vital role in determining organizational behavior and causal correlations among its various related concepts. This paper will analyze these particular causal correlations and/or regressions with specific reference to organizational behavior of Wal-Mart. Organizational culture is probably the most directly correlated concept with organizational behavior. According to Schein it's "A pattern of shared basic assumptions that the group learned as it solved its problems of external adaptation and internal integration that has worked well enough to be considered valid and, therefore, to be taught to new members as the correct way you perceive, think, and feel in relation to those problems"( Schein, 2004, p.17). Wal-Mart has adopted an employee-friendly organizational culture whose corner stone is "a system of rewards for the trusted associates". Its style of management is based on this philosophy, though there have been wide-spread allegations about unfair treatment of its employees too. Next concept is related to its organizational efficiency or effectiveness. Wal-Mart has put in place a number of strategically deterministic metrics to gauge its success in organizational efficiency. In the first place it introduced Radio a Frequency Identification (RFID) initiative in German and North Korean markets to tag products with radio frequency chips and antennae though the effort did not succeed as expected. Yet again Wal-Mart has had some success in its international operations elsewhere - e.g. China - because it was able to adapt its unique organizational culture and retailing concepts to suit local needs. Organizational efficiency and effectiveness played a major role here by transforming its American success story into an international one. Its organizational efficiency has also manifested in effective supply chain and value chain management. Individual suppliers are held responsible for hitches in supply chain process. Similarly its value chain process is subject to effective quality and production control measures. Thus an essential element of organizational behavior is associated with efficiency. Individuals in an organization act in a manner to create value. Thus each individual member is responsible to act in the most efficient manner to create value in the process. Such actions on the part of individual members of the organization have to be coordinated at different levels such as HRM and motivation. The HRM function of Wal-Mart is not an ordinary task. With the number of employees estimated approximately at 2.1 million in its world-wide operations, Wal-Mart has a very significant amount of HRM functions to perform. The recruitment, in-house training and retention activities of the organization play a very crucial role in this respect. HRM practices at Wal-Mart have been both acclaimed by some and severely criticized by others. The recent class-action law suits against its non-payment of overtime pay to employees have been cited as a case in point. Though these law suits have generated a lot of interest in its activities, the organization has not been affected by their negative fallout. Its employees or associates have been trained in a tradition of work ethics that reward perseverance and duty-consciousness. Both motivation and organizational culture also play a bigger role in aiding and abetting organizational efficiency as a concept of importance. Employee motivation at Wal-Mart is determined by its organizational priorities along with command and control structures. Though the leadership style plays a vital role in determining the level of employee motivation, command and control structures within the organization influence the extent of motivation very much (Baldoni, 2005, p.117). Despite the partially success story of Wal-Mart in employee motivation, critics point out that the company has grown too much to retain staff indefinitely. Organizational structure coupled with motivation has a big impact on efficiency. Wal-Mart, as of recently, announced its desire to further delayer its vertical management structures so that its chain of command would be curtailed to accommodate ambitious subordinates' plans for upward mobility. The organizational behavior concept of diversity can be studied with reference to HRM practices, organizational culture and motivation at Wal-Mart. Diversity is defined in a variety of ways by researchers depending on the purpose to which it is put. Diversity within an organization is relevant to its culture concepts as much as it's relevant to a study of its HRM and motivation strategies. Its multicultural workforce is perhaps the best testimony to its commitment to equal opportunities-for-all concept. The US Equal Employment Opportunity Commission (EEOC) expects all employers to carry out a survey of their respective workforces to determine and record the gender and ethnicities of them. Wal-Mart has acted in conformity with this requirement and has demonstrated its commitment to employ as racially diverse a workforce as possible, though ethnic minorities are less represented in some departments than others. Diversity is also noticeable in its supplier network. Wal-Mart engages various suppliers to provide it with all requirements and in the process it adopts a very stringent vetting plan. Suppliers, who meet its highly demanding procedural and quality-based rules, are given priority while most of the relatively less known suppliers are out of its register. However there is a particularly disturbing trend at the higher levels of the management hierarchy of Wal-Mart. For instance, most of the senior managers tend to belong to majority communities. This tendency has been questioned by critics who point out that Wal-Mart has been practicing less diversity at the expense of goodwill that it successfully generated in the past. Next organizational learning is a very important organizational behavior concept that requires extensive analysis in the context of Wal-Mart's customer-centric associate-friendly management philosophy. This concept has assumed such great importance in management literature for the sole reason that it focuses on the primacy and immediacy of leadership control and structure in the organizational behavior of the company (Wenger, Snyder and Pfeffer, 2001, p.104). The learning process is inevitably connected with the training and development process. Training, Learning & Development (TL&D) is a rejuvenating concept of any organization. It facilitates a transition from exclusively restricted environments to broader participatory structures at all levels. Wal-Mart has achieved higher worker productivity rates due to this process. HRM practices often underlie such organizational learning processes thus effectively transforming employee attitudes and behavior. Despite vertically organized management structures having negative influences over employee participation and productivity, any effort at promoting organizational learning is sure to generate a degree of positive response by employees to changes both within the organization and without. Wal-Mart has experienced a spurt of worker productivity growth and profits due to the advent of organizational learning against the backdrop of diminishing confidence in management practices. Labor management practices at Wal-Mart have not always been good; neither have senior managers felt the delegation of authority and responsibility to be desirable beyond some limits. Competitors of Wal-Mart have at times been able to do better than the latter simply because they have successfully adopted organizational learning processes to the satisfaction of all employees. Organizational learning and culture have many things in common. In the first place they are intertwined in the correlation between the necessity to promote positive paradigm shifts within the organization and the long term corporate objectives of promoting customer loyalty and worker productivity. This correlation has been highlighted by modern management gurus like Peter Drucker to illustrate the significance of incorporating the organizational learning process into culture. Employee motivation presupposes a causal relationship with organizational learning. The former's logical basis is determined partially by the extent of freedom made available to employees to participate in the organizational learning process. Inter-departmental transfers and on-the-job training would facilitate job enrichment and job enlargement. Wal-Mart's floor level employees, as of late, have little if any to be satisfied by the kind of organizational learning process. What was once one of the greatest assets of the company has now become a liability. There is less and less emphasis on this age old practice at Wal-Mart nowadays. Finally communication is the most critical organizational behavior concept in the modern management literature. In fact organizational behavior heavily leans on communication at every imaginable level of management and decision making (Borkowski, 2005, p.100). The author particularly identifies the holistic approach to effects of communication on organizational behavior and vice versa. The particularly strategic functional relationship between the two has been reemphasized in the modern management context in which HRM practices seek to exert pressure on organizational behavior to adjust so that communication can be more effective. However the relative significance of internal communication strategies must not be overemphasized against the external ones. Wal-Mart's success story depends on both internal and external communication unconventionalities. Communication function is similarly influenced by organizational culture. Modern communication strategies are necessarily those which have an IT bias. Therefore organizational culture tends to impact on them in a number of ways including the determination of the communication structure and choices within the organization. Wal-Mart has experienced this as never before. Employee motivation methods such as monetary and non-monetary methods are influenced by communication. Conclusion Organizational behavior concepts such as organizational diversity, motivation, communication and efficiency have received the critical attention of many authors and researchers over the years. Their successful application in an organizational context such as that of Wal-Mart has to be studied with reference to some of the organizational practices such as HRM practices, culture and employee motivation. Overall Wal-Mart has both degree of success as well as a degree of failure in the application of these concepts, though its success has been more strategically determined than its failure in some instances. Still the company is managed well and its organizational behavior has been remarkably positive and productive in bringing about profits and productivity. It's very rare for any organization to be positive in every respect. Wal-Mart is not an exception to this rule. Its management culture along with HRM practices and motivation strategies has influenced the organizational behavior concepts more positively enough to enable it to be the number one company in the world. REFERENCES 1. Baldoni, J. (2005). Great Motivation Secrets of Great Leaders. New York: McGraw-Hill. 2. Burton, R.M., Lauridsen, J. and Obel, B. (2004). The impact of Organizational Climate and Strategic Fit on Firm Performance. Wiley Periodicals, Inc. Vol.43 Issue (1) p.p.67-82. 3. Borkowski, N. (2005). Organizational Behavior in Health Care. Massachusetts: Jones and Bartlett Publishers, Inc. 4. Kramer, R.M. and Staw, B. Editors, (2003). Research in Organizational Behavior, Volume 25(Research in Organizational Behavior). Oxford: Elsevier Ltd. 5. Schein, E.H., ( 2004). Organizational Culture and Leadership (The Josser- Bass Business & Management Series). California: John Wiley & Sons, Inc. 6. Wenger, E.C., Snyder, W. and Pfeffer, J. (2001). Harvard Business Review on Organizational Learning. Massachusetts: Harvard Business School Press. Read More