walmart

Organizational Challenges at Walmart
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Institution:
Walmart
Company Background
“The company began with a single discount store” and the simple idea of retailing more for less (Walton, n.d.). Over the last five decades, it has grown to become the world’s largest retailer. Presently, the company has over 11,500 stores which collectively receive traffic from approximately 260 million clients every week (Walton, n.d.). “The company employs about 2.3 million associates” across the world (1.5 million in the US), and in the 2016 financial year, it generated revenue of approximately 482 billion dollars (Walton, n.d.). This year, Walmart announced that it would be raising the employee salaries to 10 dollars per hour in February and improving the worker scheduling so that the workers plan their lives better. The company has an able team of executives who believe that moral and personal integrity is one of the primary fundamentals and it has, to begin with every one of them. This team is currently led by Doug McMillon, the company’s Chief Executive Officer. This article discusses the organizational problems at Walmart that put the company at risk of losing its market lead to competitors like Costco.
Problems Facing the Organization
Walmart has for decades enjoyed a good reputation for things like every day low prices, excellent logistics, big stores, and superb “bargaining tactics with small retailers” (Slemmons, 2011). These are what aided the company to grow into the world’s biggest retailer with sales accounting for nearly 3 percent of the economy of the US.

However, in recent years, the company’s business model has experienced challenges from several fronts. It has big stores which performed very well in the rural areas are finding a hard time fitting in the major cities, especially in countries where there are regulations that restrict the sizes of retail stores.
Walmart’s “everyday low price pledge has also been challenged by online retailers such as Amazon” (Lombardo, n.d.). Clients also do say that most of the company’s retail stores offer very poor customer service. A thorough scrutiny into the possible causes of the poor customer service revealed that inadequate staff training is one of the culprits that can be linked to the poor customer service that the client’s witness at the retail stores (Koca-Helvaci, 2015). Most, if not all of these challenges, can be attributed to a problem with the company’s leaders and their management styles. The company has simply “failed to keep up with the” shifts in the retail world (Lombardo, n.d.). The company might have been too slow to respond to the changing environment in the retail environment. The business landscape in the US as well as in other parts of the globe is rapidly shifting, and competition is becoming stiffer even for giants like Walmart. While Walmart is focusing its attention on many other areas like advertising and increasing product range, Costco, one of its leading competitors is focusing on driving the sales of the limited items it stocks. This approach has seen Costco make huge profits for several consecutive quarters.
Theory on What Type of Change is required
Theory E focuses on the building of the shareholder value or the economic value. Theory O, on the other hand, is purposed on developing the human capability of the organization to implement some strategy and learn from the past failures and successes. It relies on a culture of high commitment in which change is emergent and continuous. What Walmart needs to adopt and implement is theory O. As the theory recommends, the company needs to all its employees to commit to improving elements like the customer care and emphasize on a bottom to top approach (Lombardo, n.d.). If the employees at the lower levels feel that they are being respected and given a platform to air their views, they might be more receptive to any change that will emerge from their discussions on how to improve the performance of the company. The company also needs to come up with innovative ways of working to give them an edge over its competitors. Walmart has started doing this by improving their online shopping technology to improve the shopping convenience of the customers. The company is also increasing the hourly wage of its employees to $10 and allowing them to work flexible shifts so that they can plan their lives better (Lombardo, n.d.). If the company follows the ideas attached to this theory, they just might cement their place at the top of the retail market and set the bar too high for its competitors to go over.
Conclusion
Walmart is easily the biggest retail chain in the world. The company employs a lot of people across the globe and generates a lot of revenue to the US as well as the other countries in which it is located. As such, when the company grows, many economies grow, and the living standards of many people go up. Therefore, the importance of this research would be difficult to exaggerate; the obvious reasons mentioned above say why. There is indeed a need for the retail giant to review its organization if they want to stay at the top for long.
References
Koca-Helvaci, Z. C. (2015). Walmart and its employee relations: organizational stance-taking
and legitimacy. On the Horizon, 23(4), 374-386.
Lombardo, J. Walmart: Organizational Structure & Organizational Culture.
Slemmons, A. (2011). Walmart Information Systems Research Project-Group2 CIS 511 Fall
2011 Amber Slemmons, Brooke Williams, Cheri Evans, Ismael Molina, & Wesley Belz.
Walton, S. Case Study: Walmart. Strategic International Management, 67.