Please analyzed the attachment document and assist with a 2 page outline (This shall be listed in bullet points) on Networking that compare and contrast the features found in the old and transformed organizational models of the Wal-Mart
Use the outline and develop a 700 to 800 words paper on Networking that compare and contrast the features found in the old and transformed organizational models of the Wal-Mart
Research at least five current sources (within the last five years) on networked organizations. Prepare a Works Cited or Reference List
ROUGH DRAFT ON THE ORGANIZATIONAL FLEXIBILITY OF WAL-MART
Introduction:
The McKinsey Quarterly said that, “[identifying] the areas where organizations need to improve their capabilities most are an important step in any change effort” (2009). However, these are skills that are hard to come by. Unfortunately, whether business operates in one geographical location or is a multinational corporation, the company needs to identify such areas to ensure that the organization is successful in its own change management.
Change is pervasive – the economy in any country is fundamentally different from what it was several decades ago. Businesses which refuse to acknowledge and react to this fact will eventually be pushed out of the marketplace. Businesses have been forced to close and file bankruptcy because management either failed to recognize the changes happening in their business environment or did, but refused to adopt changes necessary to thrive.
In the beginning of its operations, Wal-Mart managed from a centralized focus. There was protocol to follow when communicating to leadership and dissent was not well received. The organizational structure had to change to impact its operations in the United States and globally. This change was not only demanded by the changing economic environment but also by the existing structure that no longer supported and managed a global and diverse organization.
This paper outlines and highlights the key differences between Wal-Mart as a transformed organization from a traditional one.
Comparison between Traditional and Transformed Organizations:
Wal-Mart suggests several factors were instrumental to the success of its organizational restructuring. The traditional organization is different from the transformed organization in several aspects. First, the transformed entity has a very high degree of employee empowerment as a result of its decentralized decision making. However, the decentralized decision making might have been a result of business necessity rather than by designed. Keeping up a highly centralized decision making system in an organization with operations spanning several countries is not feasible. Hence, traditional organizations are markedly more concentrated in geographic scope than the changed organization. Second, Wal-Mart has no hierarchical arrangement.
The following discusses key differences between a transformed organization and a traditional one.
Key Features:
Studies have shown that in any organization, the integration of key assets such as technology acquisitions support the work of the employees by promoting an easier process to do their job (Hornstein 2008, p.1). In Wal-Mart, its technology is highly integrated within its organizational structure as a necessary agent in the implementation of change. In other words, a “more systematic, engagement-oriented and process-focused approach to the management of organizational change enables collaboration between leaders, managers and staff in the implementation of technology and business process changes” (Hornstein 2008, p. 1).
Another key feature is the language that exists in a transformed company. In Wal-Mart, its leaders and management understand the importance of efforts to engage the hearts of employees at all levels as part of their strategic business planning (Griffin 2008, p. 89). This means that management has identified that language has enabled them to address the needs of their employees. In a traditional firm, this is merely a lip service from management.
An interesting difference from a changed organization to a traditional one is how it integrates knowledge management into its culture and processes. Wal-Mart has in place a knowledge management system that encourages the different units within the firm to learn from the experiences of another. Wal-Mart is obsessed about its customers and ways to serve them better than before. Moreover, the company’s knowledge management system enables the global company to identify key drivers affecting its organization as a whole and its individual entities.
Workers Skills:
One of the most important factors is management’s leadership skills and managerial ability to manage change. Furthermore, the key people’s political skills or ‘manipulative skills’ aided Wal-Mart’s efforts in persuading the entire organization to support the restructuring. No matter how good a change, if the organization and its workforce do not support it, then that change will not happen. Hence, the ‘manipulative skills’ of Wal-Mart management during its restructuring is a key factor in aligning the entire organization to support the desired change.
Moreover, the skills of the human resource in a transformed organization have multiple facets. This means that its employees are trained to ensure customer satisfaction at any time. At Wal-Mart, the customer’s satisfaction drives business decisions rather than the company’s organizational objectives.
Internal Support Systems:
The most important internal support system in a transformed organization is its management system. Unlike in a traditional company, Wal-Mart’s top leaders and management initiate and embrace change. Hammer and Champy (1993) conveyed in an article that in a transformed company the organizational psychology or attitude of employees far outweigh the impact of managers who are task master’s. “Therefore, executives must be leaders who can influence employees' values and beliefs by their words and deeds” (P. 79).
Wal-Mart is now benefiting from the advantages of a changed organization by the commitment of its leaders to the company’s vision. As its President and Chief Executive Officer said, “We will maintain our focus on price leadership in every market, whether we’re talking to the working mom in Sao Paulo or the business in Tokyo” (Wal-Mart 2009 Annual Report). The transformed organization’s management across its global operations is steadfast in its dedication towards attaining the company’s overall goal. This overall goal governs how each element of the business acts.
Management at Wal-Mart is trained to pay attention to people by continuously figuring out how to relate to, inspire, recruit, ally, align and attract people - not just with their consumers and customers, but also their employees and alliance partners (Berman & McClellan 2002, p. 28). This transformed organization widely recognizes and understands that each employee contributes to the customer's experience with the store.
External Support Systems:
As a transformed organization, executives at Wal-Mart know that to be able to achieve its vision, mission and objectives, employees must “work hard everyday to deliver on [the] promise” (Wal-Mart 2009 Annual Report) of its founder, Sam Walton, to deliver value for money. Obvious in Wal-Mart’s operation is its high degree of cooperation and integration with the businesses and operations of its suppliers. Wal-Mart executives communicate that the company will not do business with another organization if its operations and systems are not integrated within its own.
This integration enables Wal-Mart to react to market changes immediately. Moreover, this integration allows Wal-Mart suppliers the opportunity to interact with their consumers directly and assess how their products are being perceived in the market.
Furthermore, as Wal-Mart transformed its business strategies partners changed logistical operations as well. Wal-Mart has made “strategic investments in interlocking logistics systems” (Bhatnagar & Viswanathan 2005, p. 13) which inherently tries to keep inventory moving minimizing products sitting on the shelves for any length of time. This practice is critical for effectively increasing cash flow for global supply chains and adopted depending on what the firm believes is its core competence (Bhatnagar & Viswanathan 2005, p. 13).
Contrast Between Traditional and Transformed Organizations.
“At the dawn of the 21st century Wal-Mart has emerged as just this kind of world-transforming economic institution, setting the pattern for a highly integrated, transnational system of production, distribution, and employment” (Lichtenstein, 2006). This quote was taken from a book called The Face of 21st Century Capitalism written by Nelson Lichtenstein and it discusses the contrasts of Wal-Mart’s transformation. The one downside to Wal-Mart’s transformation comes down to its effect on surrounding business and communities. Part of Wal-Mart’s change was driven by their motto “Always Low Prices” (walmart.com, 2009). The contrast that often follows with criticism from other businesses is Wal-Mart’s treatment of workers.
Worker Skills:
Wal-Mart hires many employees to fulfill many jobs, about 1.5 Million employees worldwide. This large number can have a significant effect on communities and this was stated in article from Melanie O’Gorman, “…Wal-Mart radically transforms the American communities in which it situates” (O’Gorman, 2008) and this can be positive and negative to community with worker skills.
External and Internal Stakeholders:
The contrast is internal stakeholders are concerned with keeping prices low for the consumer and profits. Consumers and external stakeholders do enjoy lower prices for everyday items. Communities with large Wal-Mart stores claim that it drives away smaller businesses that cannot offer low prices on everything from food to electronics. This transformation has made Wal-Mart the largest retailer in the world but some don’t appreciate this model.
Analysis of Wal-Mart’s Transformed System:
The transformed system of Wal-Mart has produced one of the biggest retailers and the most successful companies in the world. Transforming such a large international organization is a large feat and has been an improvement for Wal-Mart. The “big-box” label that has been used to describe the massive organization is a negative. The large nature of Wal-Mart has driven some smaller businesses away and forced other lower labor wages. Overall Wal-Mart offers lower prices and this brings customers back to the store for their business.
Recommendations to Increase Wal-Mart’s Performance
Teamwork
David Bhagwan identified seven key characteristics, if successfully used, would act as change agents and encourage employees to work together as a team. Those characteristics are: listening skills, questioning, persuading, respecting, helping, sharing and participating together toward a common objective.
The best recommendation for seeing success manifested is teaching, yes teaching, these very basic skill-sets in the work environment. How does one express good questioning skills? Often, the approach or tone used in questioning is perceived or perhaps judgmental and accusatory. Offering a seven-step behavioral modification program that includes role playing not only teaches new behavior for the employment model of teamwork but also could carry over into better problem-solving skills at work and at home.
Cooperation Amongst Internal Customers:
The first order is to understand that fellow coworkers, bosses and suppliers all function as a customer to each other as well. Employer retention serves as a key element to a company’s performance excellence. The greatest reasons employees stay at a job is because of developed friendships. High transition otherwise weakens the ability for this to occur, not to mention the diminished efficiency in operations and proficiency of the employee.
Cooperation Amongst External Customers:
Motivating employees to embrace customers as their true reason for service is often achieved using a financial incentive based program. Employees feel valued for their worth and successful achievements directly affect the company’s bottom line. Since Wal-Mart ventured into selling broadband, the electronics department, their more expensive product line, would be the best department to trial an incentive compensation program.
Wal-Mart would be best served by negotiating with fewer companies securing a greater savings based on the buying power of the consumer. In other words, if they partnered with specific lesser expensive companies, they could push that cost savings onto the consumer, increase sales to Wal-Mart as well as the supplier of that product.
Methods for Training Excellence:
Iwould recommend Wal-Mart evaluating a model such as found with “The Tom Peters Company’s Excellence Audit” to assess skill level, identify the change needed and create the action plan and implement that change. (Tom Peters Company helping clients to be Future Winners, 2009). Using a ‘known commodity’ associated with excellence pays off in tremendous dividends because the experience is positive and the repetitive need for that experience is heightened. This training program is a month long allowing Wal-Mart to follow up with the Peter’s company support as needed.
Conclusion:
While Wal-Mart has retained the original vision of being a retail store that saves people money so they can perhaps live better, this global company is also a company that has also evolved to meet the requirements of competitive times. In doing so, Wal-Mart has surely redefined itself within the past five years. This retail giant added walk-in clinics at an incredibly reasonable rate to follow their motto of value as compared to their eye clinics. Who would have thought Wal-Mart, an inexpensive retail chain would also consider healthcare their product line? The corporation also ventured into broadband and continues to supply a product generally associated with Best-Buy, an opportunity taken with the contraction and subsequent closings of Circuit City stores. Wal-Mart, for its concerns with customer service, seems to rally and redefine a retail store that may in fact, be the best one-stop shop, in-expensive company that will continue to surprise us all.