WALMART Organizational Behavior.docx R

EXECUTIVE SUMMARY This report focused on theoretical & conceptual analysis about the relevant Organizational Behaviour concepts of Wal-Mart Stores Inc. Wal-Mart Stores Inc. is one of the most successful corporations worldwide. It is the largest company in world and has been ranked number one on the Fortune 500 Index by Fortune Magazine. In this report we will focus on the organizational behaviour inside Wal-Mart. The scope of this report includes the current practices as well as relevant suggestions to improve the current scenario based on key organizational behaviour theories covered in our ME 6000 course. In order to do so we have analysed the current organizational structure, business process, organizational culture, motivational approaches, job design process, evaluation, reward and feedback process, groups and team dynamics, conflict, negotiation and power management and finally decision making and communication process of Wal-Mart. Since Wal-Mart has been shaping up the retail sector and setting standards in most cases as far as retail management is concerned, our analysis reveals how on-going challenges can be better met by applying system theory, conflict resolution theories, and motivation theories in various context of organizational behaviour within Wal-Mart. This report shall define what organizational behaviour’s main designs are and how Wal-Mart exert them. The paper shall concentrate on Wal-Mart organizational practiced concepts.

Introduction: An understanding of organizational behavior is necessary to decipher the needs of the individuals and groups within the organization, and in order to exercise more effective communication, decision-making processes, and leadership. Robbins and Judge (2008) stated that organizations with strong cultures influence employee behavior, reducing turnover and maintaining a high level of job satisfaction in the workplace. Wal-Mart, founded by Sam Walton in 1962, is one of the world largest companies by market capitalization and number of people employed and touching millions of customers every day. There are more than 7,800 Wal-Mart stores and Sam’s Club locations in 16 markets worldwide and there are more than 2 million associates serving more than 100 million customers per year (About Us, n.d.) It is the largest grocery retailer in the United States with an estimated market share of around 20% of the retail grocery and consumables business. To be able to efficiently operate such a complex operation at such a large and do it consistently

would only be possible by the huge effort by Wal-Mart’s ‘associates’ as its employees are called. This papers looks at the human resources practices of Wal-Mart with a special focus on group and team behavior, leadership, conflict and negotiation, human resource practices and organizational culture and diversity within the company to understand them and also provide some recommendations to make them better in the future.

, the long history of Walmart in succeeding and continually growing internationally shows that the firm’s organizational structure and organizational culture have been helpful in bringing competitive advantage and success. Such organizational structure interacts with the organizational culture to maintain the significant competitive advantage of Walmart. The report contains a detail analysis of organizational behaviour discussing organizations on leadership behaviour, organizational effectiveness, organizational structures and human resource management. The report further analysed the structure and culture of Wal-Mart Stores Inc. with emphasis on issues relating to risks and uncertainties in the company’s decision making. Recommendations are laid based on the study to address the company’s issues and align decision-making with the company’s

Diversity According to Luthans Diversity is much more than Ehnicity , gender , sexual . It includes range of ages Today, Walmart is one of the most diverse employers in the U.S. over the past ten years. the percent of women in Walmart increased from 19 % to 31 %. Our three strategic pillars are workforce, workplace and marketplace. • Workforce: Building a diverse global workforce to meet the rising expectations of Walmart’s Next Generation customer. • Workplace: Nurturing an inclusive and collaborative culture to retain our talent and maximize their potential. • Marketplace: Empowering our associates to make a difference in the lives of our customers and in the communities we serve

Walmart is a great place for women to work. Walmart is a large employer of women in this country; 815,000 of Walmart’s associates – or 57% of its US workforce, are female. 2

Walmart’s Organizational Culture Walmart’s organizational culture has four main components. These components guide employees’ behaviors. The components are also identified as Walmart’s beliefs: 1. Service to customers 2. Respect for the individual 3. Strive for excellence 4. Action with integrity In terms of service to customers, the company prioritizes customers in its operations. Walmart also recognizes the contributions of each employee to the success of the business. In addition, the firm strives for excellence in the performance of individuals, teams, and the entire organization. In terms of maintaining integrity, Walmart promotes the virtues of honesty, fairness, and impartiality in decision-making

Recommendations on Walmart’s Organizational Culture and Structure Walmart’s organizational structure is ideal for the company’s type of business and global scope of operations. However, Walmart can improve in applying its beliefs in the context of its organizational culture. These beliefs are ideal. Still, the company is frequently criticized about its failure to address employees’ concerns regarding low wages. Such criticisms pointed to the difference between the belief of respect for individuals in

the organization’s culture, and the actual treatment of the employees. Thus, a suitable recommendation for Walmart is to implement more effective measures for fulfilling therespect for the individual component of the organizational culture.

Group and team behavior – There has been a focus on achieving things together

as a team right from the days of Sam Walton. Sam Walton firmly believed that all the people working in Wal-Mart are ordinary people and as a team they are able to do extraordinary things, growing together and accomplishing much more than each of them could individually (Teamwork, n.d.). This same spirit is ingrained even today into the day to day operations of Wal-Mart all over the world, where they leverage team work to overcome obstacles as they all work together to serve their customers the best. The manner in which they work as a team and the single mindedness in which they serve their customer is given to them in the guidelines that the employees follow to extract the maximum value out of working together. Leadership – To manage the complex operation of the huge number of super stores

across the world, there are store managers who are given complete ownership of store operations and given a lot of data that in other companies would not be shared with the middle management. This trust that management has in it increases their ownership in the business and they are motivated to put in better performances and also motivate their team to achieve their targets while ensuring complete customer satisfaction. The focus on the customer is seen here also with the philosophy of ‘Servant Leadership’. As per this philosophy, it is their strong belief that effective leaders don’t lead from behind a desk and that it is important to develop leaders who are servants to the customers, can work with partners and who are able to motivate the team to perform well. Across stores all over the world, the managers at Wal-Mart can be seen right on the floor working along with other associates (Servant Leadership, n.d.). This enables leaders in Wal-Mart to lead by example which is very motivating for the associates as well to put in their best effort. Walmart’s leadership position in the retail industry and its potential longterm success are linked to the beneficial combination of the company’s organizational structure and organizational culture.

Conflict Resolution - Wal-Mart also realizes the importance of free flowing

communication to being responsive to customer needs and actively encourages two way communications across the organization both top down and bottom up. To encourage associate to come up and speak with the management, Wal-Mart actively promoted the open door policy where associates can walk up to many manager or leader and share suggestions, ideas or raise any concerns that they might have (Open Door, n.d.). It is expected of the leaders that they treat all discussions fairly without bias and with an open mind and in confidence if required and work with the associate to resolve the issue or problems that they might have. This again is a very good policy that helps Wal-Mart to fix problems or resolve conflicts and issues quickly and focus on its purpose which is to serve its customers in the best possible manner. Human resource practices – As described earlier, one of the most important

functions in Wal-Mart would be the human resources who have to come up with processes and policies to manage the huge two million associates that are employed by the business. The employees are treated as an integral part of the business and are called as ‘associates’ which makes them feel a part of the company and hence motivates them to give their best. Wal-Mart also recognizes that it would not be able to achieve its mission without the support of its associates and has got a variety of programs for the benefit of the employees. All associates and their families are provided with health coverage and this program is being implemented currently (Health & Wellness, n.d.). It also uses a lot of technology in its operations such as cash registers being shut off automatically so that associates can take their break and relax and also to account for accurately the amount of time that they had worked. There is also a very open culture where people are encouraged to come up and resolve issues. Though there have been a lot of criticism in the past of Wal-Mart being a bad employer, not giving enough chances for women to get promoted, exploiting workers with very low wages, (Miller, G. 2004) it seems that they appreciate these issues and are working on them to find a solution.

Organizational culture –Sam Walton had started the company based on strong

beliefs and values on how the business should be run and these rules and customs are strongly instilled even today into the culture of Wal-Mart. In the company this is known as the three basic beliefs and values and each and every associate is expected to adhere to at every moment in Wal-Mart. The first of the three basic beliefs and values of Wal-Mart is respect for the individual, for the customer, associates, and suppliers with a focus for building relationships and most importantly treating each other with dignity, which helps Wal-Mart to better serve its customers and the community it operates in (Culture, n.d.). The second important belief is of service to Wal-Mart customers, as they believe that customers are the reason why Wal-Mart exists and hence they should be given the best customer service possible. Associates at Wal-Mart are encourages to look for every opportunity where they can exceed customers expectations and put every effort in that direction. The third important belief that guides employees at Wal-Mart is that they should never be satisfied with what they have already accomplished but they should always extend their boundaries and strive to achieve excellence. This passion for continuous improvement o serve their customers best while saving them money (3 Basic Beliefs & Values, n.d.) hat, customer service is deeply ingrained in the culture of the company, as can be seen from one of the many rules of Sam Walton that they follow even today, called as the ’10 Foot Rule’. As per this rule, associates have to pledge that whenever they come within 10 feet of a customer, they would look at them in the eye, greet them and ask them if they require any assistance. Many similar rules of customer service that are followed in the company help to form a culture that is built around customer which helps the business achieve its long term strategy (1o Foot Rule, n.d.) Organizational Diversity – Of late Wal-Mart has been taking a lot of steps to

encourage and increase employee diversity in the organization with its pro diversity practices. As an organization it says that it values diversity and fosters a working environment that enriches the personal and professional experiences of our associates, promotes excellence, and cultivates the intellectual and personal growth of the entire associate population. WalMart plans for diversity as they feel a global business like them needs to have employees from various backgrounds and cultures to understand the customer better and operate a successful global operation. Therefore from the management level, associates and also the suppliers, Wal-Mart tries to create a diverse work environment and a culture of inclusion that

promotes diversity (Diversity, n.d.). To encourage and promote diversity in the organization, Wal-Mart has established a Employment Practices Advisory Panel which will work with WalMart's senior management to develop and implement progressive enhancements to equal employment opportunity and diversity initiatives for the company (Communities, 2006). In addition to that all supervisors in Wal-Mart receive training on diversity issues which will make them appreciate the diverse work environment and help them deal with people from different cultures and backgrounds. Of late Wal-Mart has also started women in leadership and mentoring programs to help female employees further their careers and more into management roles (Retail Merchandiser, 2005). The above discussion shows that Wal-Mart recognizes the need for a diverse and multi-cultural workforce and has taken many steps to promote the same. Recommendations – Though Wal-Mart has taken many steps towards ensuring a highly

charged up, motivated and diverse work environment as can be seen from the analysis above, there are still some areas where a lot of improvement is needed to make Wal-Mart a better place to work for the associates and in the eyes of the customers. Over the years, Wal-Mart has been in the news for many wrong reasons and a lot of negatives with regard to its operations have been greatly highlighted in the press. It has been criticized by women’s rights groups and other community organizations and there are many high profile court cases against it due to alleged discrimination against women employees in terms to lower wages than their male counterparts and also with regard to promotions and management opportunities (Drogin, 2003). This kind of bad press reflects very badly and there may be truth in that as it has been endorsed by thousands of current and former Wal-Mart female employees. In this regard Wal-Mart should take affirmative action and ensure that the amount of managerial women employees reflects the actual percentage of women that are working in Wal-Mart and also ensure that needs of women working are addressed. Another criticism that has been alleged against Wal-Mart is that it pays relatively

lower wages for the amount of work that is done by its associates, and the associates have to suffer due to its mission of constantly lowering its prices for its customers (Miller, G. 2004). Wal-Mart is currently taking some steps in this regard like offering healthcare and wellness benefits for its associates and having overtime pay, and also using advanced IT systems to ensure that employees are paid accurately and in time for the amount of work that they are doing. However Wal-Mart should understand that the associates, who work so hard to ensure

the high standards that have been set should be treated fairly and should try to rationalize their wages or offer other benefits that would ensure that they are able to maintain a good standard of living. To manage an issue and prompt a very quick resolution, Wal-Mart has a open door policy where an associate can walk up to an discuss with the store manager or supervisors any of the problems that they are having. In addition to this, Wal-Mart should have outer outlets for employees to address their concerns as some of the employees may not want to go through this channel due to various reasons such as for the fear of being reprimanded or not having confidence in the store management that they would resolve the issue. This can be one reason why so many issues has escalated into the major problems that have gone outside Wal-Mart and it receiving very bad publicity for it. Also as Wal-Mart is strictly opposed to unions, there are no other outlets for employees to raise concerns or openly negotiate with the management. Therefore it is recommended that in addition to the open door policy and the direct communication channel, there must be a host of other communication channels both at the store level and at the corporate that specifically looks at these issues and addresses them, and this reduce employee grievances as soon as possible. In addition to that, being a company the size of Wal-Mart it is very difficult to manage the operations unless very well process have been designed for each and every organizational activity and also control mechanisms to ensure that these processes are being adhered to. Wal-Mart makes very heavy use of information technology and communication systems in other parts of its business such as supply chain management and operation with a very good deal of success. For the human relations functions as well, Wal-Mart should leverage technology for many of its daily operations to track the effectiveness of its current processes so that they can take remedial actions if necessary and achieve their goals faster. Conclusion – Wal-Mart without a doubt can be said to be one of the companies of the

century and a symbol of how one man’s vision can make a great difference to the entire world. It has got very well defined processes backed by technology that has enabled it to scale up its business to become the world’s largest private enterprise. Even through it is not the best paymaster, by creating a culture of customer service and high performance, and by making them owners in the core business processes through trust, it is able to motivate its employees to achieve greater things and strive for excellence. However, there are some areas

that Wal-Mart needs to concentrate on to achieve its goal of making Wal-Mart a great place to work for its associates and provide them with a professional experience that will make them better.

Motivation Motivated employee are often the engine drive in moving an organisation forward, the Wal-Mart Company often organise its employee into teams in carrying out there operations. This makes the employee feel valuable within the team by contributing different ideas on proposed operations at the same time by being innovative. The company by this strategy create a friendly and innovative culture, which made it possible for the company to depend on its workforce in maintaining it brand reputation globally. Furthermore, trust is being established as part of its culture. This is very important in every relationship, as regards to the Walmart Company. Customers put their trust on the company to provide good quality product and high level of attention to customer’s needs, bottling subordinates trust the company to operate in the best interests of Walmart System and so also the employee’s trust their voice will be heard and their various contributions are being valued. An open free communication is belief to be a means to sustain culture, based on that the Wal-Mart Company provide a good number of communication channels thus; monthly leadership team meetings and workers team brief sessions, departmental team meetings holding on weekly basis, each region have a consultative group with one European council representative and lastly, frequent surveys are being sent out to monitor employees complains or suggestions.

References About Us. (n.d.) Retrieved February 8, 2009, from Wal-Mart Stores, Inc. Web site: http://walmartstores.com/AboutUs/

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Culture When new employees join your company, the way they behave is influenced by the organizational culture. People are social beings and strive to fit in to the environment around them. If your company culture encourages employees to speak up without fear of reprisal, new employees will gain confidence in expressing their ideas, whereas if the culture is to shoot the messenger, new employees will soon learn to keep their opinions to themselves. You can influence company culture by being clear about your vision and values and putting them into practice on a daily basis.

Motivation While the need to earn a salary ensures people will show up for work, organizational behavior suggests that employees need to be motivated to perform to the best of their ability. Employees are most likely to be motivated when they see a clear link between the effort they put in and the reward that they receive. Rewards must be seen as fair and equitable in order to inspire employees to work hard. Managers can motivate employees by setting realistic, achievable goals and measuring attainment. Achievement of these goals should be rewarded, either through recognition from the manager or financially. Related Reading: Management & Organizational Behavior Topics

Decision Making Whether at the organizational or individual level, decisions are made by human beings. Organizational behavior influences the decisions that people make. Companies with robust, effective communication mechanisms enable managers and employees to make informed decisions, because they understand the business context. The organization's approach to risk will determine the extent to which managers and employees feel comfortable taking risks in their decision making. Innovation and creativity are more likely to be stimulated in organizations that encourage informed risk-taking.

Change Management

All companies must respond to changing markets, technical advances and customer demands if they are to survive. However, employees often prefer the familiar ways of doing business, making it difficult for them to change and adapt. Companies can manage change effectively by understanding organizational behavior. The need for change should be openly discussed, with the opportunity for employees to ask questions. Managers must be seen to buy in to the change. Key employees who may be resistant to change should be sought out and persuaded of the benefits of change.

The Coca-Cola Company is the world largest multinational beverage company at the same time the world number one producers and marketers of soft beverages drinks and the company with the most valuable and recognised brand globally. This success of the company rotates around five key factors, which includes recognised brand, quality, marketing, availability and innovation. The company is structured on a global level with flexible adjustment features so as to comply with its regional markets sensitivity. The structure is not only based on its internal factors but it also includes external factors that include their bottling subordinates. The company produces syrups and concentrates which are being sold to the authorised bottling companies that have the mandate to produce, market and distribute products to the final consumers, this process is known and COCA-COLA SYSTEM. The external relationship with its bottling subordinates is one of the company’s key strength, the Coca-Cola company work hand in hand with the bottling companies to ensure compliance with product requirements, quality and services. Organisations may be structured on its function, product or process. The function reflect on its distinct specialism be it in production, marketing, finance or distribution while the product reflect directly on it product and the process could be in its manufacturing, packing, storing or delivering. However, organisational structure is usually design in order to meets its aims. In this regards a structure should be design to accommodate different ideas sharing within the organisation and flexible decisionmaking and a proper management control.

A multinational global organisation like the Coca-Cola Company has a flexible structure that not only focused on product, marketing, distribution of finance but also profoundly encourages team work in each of their innovations. In every product development example Coca-Cola Zero, the company assemble an employee team of different specialities to analyse all the possibilities. In such teams, marketing specialists is expected to shed light on the result of his/her market research in regards to the new product, food technologies to clarify the changes and how feasible the new product is while the financial expert is to give report on the financial implications as regards to the new product. Aside from structure, an organisation is expected to have culture. An organisational culture describes the norms and values of the organisation in its dealings with both internal and external subordinates. The Coca-Cola Company also based its culture on enhancing and empowering its employee, this is so because the company consider employee as its most valuable asset. Motivated employee are often the engine drive in moving an organisation forward, the Coca-Cola Company often organise its employee into teams in carrying out there operations. This makes the employee feel valuable within the team by contributing different ideas on proposed operations at the same time by being innovative. The company by this strategy create a friendly and innovative culture, which made it possible for the company to depend on its workforce in maintaining it brand reputation globally. Furthermore, trust is being established as part of its culture. This is very important in every relationship, as regards to the Coca-Cola Company. Customers put their trust on the company to provide good quality product and high level of attention to customer’s needs, bottling subordinates trust the company to operate in the best interests of Coca-Cola System and so also the employee’s trust their voice will be heard and their various contributions are being valued. An open free communications is belief to be a means to sustain culture, based on that the Coca-Cola Company provide a good number of communication channels thus; monthly leadership team meetings and workers team brief sessions, departmental team meetings holding on weekly basis, each region have a consultative group with one European council representative and lastly, frequent surveys are being sent out to monitor employee’s complains or suggestions.

Approaches to organisational decision-making According to Corneilssen (2008) Decision-making is a significant factor in every good and successful organisation, the question still remain on ‘how can good decision be made?’ one portion of the answer is relevant information and good interpretation of the information. Consulting an expertise could also be a good advantage so also ability to admit wrong. There exist various logical aids and approaches to decision-making, which of these is the best? The questions is not as simple as it sounds, there are many references that made a situational suggestions on decision-making but still there has not been clear agreed best approach in this regards. Version-led approach in this approach decision is precisely depends on the person with the vision, and if for instance something went wrong he/she leaves the organisation that decision is likely to be abandon. Plan-led approach is usually excessively dependent on the planner’s point of view; usually one directional professional that might ignore some crucial factors and needs carry along the stakeholders and politicians as well. Consensus-led approach is based on agreement and unless if the agreement between the parties can be reach in short time, decision is likely to be delayed. This are some of the reasons why most organisation adopt to work on mix approach, for example the united kingdom use the mix approach in the sense that vision, problems and objectives decisions are based on consultation while experience approach is being used in developing and reviewing strategies. Hence, the best approach is relatively based on the situational circumstances.

Management approach to risks and uncertainty decision-making The management of an organisation are often challenged with situations of uncertainty and risk. Decision-making being a process to reduce or eliminate the tendency of ricks and uncertainties occurring, with that being noted, its clear that decision managers are the driving force in eliminating the extent to which an organisation faces ricks and uncertainty.

Ricks and uncertainties both play a significant role in decision-making but its important to note out the difference, in decision-making uncertainty quite simple effect by slowing decision. Usually when managers are confronted with such uncertain circumstances, they hold their decisions and put some measures to reduce the uncertainty level before making a final decision, which clearly delayed the decision-making. Risk on the other hand, is another form of uncertainty that involve loosing at different level depending on the result yield by the decision. Management approach to decision-making with ricks and uncertainty should involve some parameter to identify and measure the level of ricks involves, this will allow the organisation to know the exact business rick involve in the decision-making. Business ricks includes operational risk, legal ricks, financial ricks and strategic ricks. After the management have identify the type of ricks involve, its expected of the organisation to quantify the level of the rick. In this stage organisation should make certain of the cost to be encounter if the risk prevail, this could be mathematical in some cases of financial ricks. A general formula that is being used in calculating risk is as follows: Risk = ((probability of rick outcomes) * anticipated lost as result of outcomes). In management decision-making it is highly required of the organisation or the management rather to be able to manage, transfer and contain ricks, this will define the potential of the management in handling and containing ricks.

Organisational decision in Coca-Cola Company As studied by Taylor (2000) Coca-Cola Company organisation decision has to do with the board members. The members of the board are being elected by the company’s shareholders to assume responsibility of protecting their interest and to ensure the success of the company. The board members serve fundamentally as the ultimate business decision-making board of the company, only for those decisions that needed the consultation of shareholders. The board are positioned to oversees senior officers of the company and are being expected to guide and advice them in safeguarding

company’s asset, maintaining absolute control with proper governance and following rule, regulations and laws. Furthermore, in making decision the board member are expected to consider every single factual details and possible circumstances before proceeding into conclusion. One of the main responsibilities of a director on decisions is to exercise their absolute judgment and to act in accordance to what they reasonably believe to be of best interest of the company as well as the shareholders. The corporate level of the company involves five hierarchic levels, the team consist of eight operating directors form various divisions, and this made it possible for the board to get wide range of suggestions on decisions.

Conclusion and recommendations The Coca-Cola Company has an organised structure that foster employee involvement in all its aspect except for decision making which is considered to be a relatively inadequate decision-making practice in a global company of that nature. The company’s decision making practice does not match with any of the company’s practices, the company operate on a decentralized practices only for the decisionmaking. The company can improve its decision-making practises firstly by frequent switch of directors to handle relevant tasks, this will enable them to think outside the box in given suggestions to the board on decisions. Secondly, the company should operate decision open door policy by involving voluntarily employees in suggesting to their various line directors on their ideas on how to go about solving a proposed problem and also to propose on possible problems that are about to erupt. This will give decision-making board the ability to widen their possibilities on solutions and to tackle small problems before growing bigger.