INTRODUCTION
Every organization intends to create an effective organizational design to improve business performance and gain long-term business sustainability. It seems important to identify different faults in the internal business environment and shape different strategies to regain an effective flow of the business process. This study revolves around the retail chain and its organizational design. Concepts of decision making, innovation and change, and organizational culture are triggered by the design of the organization. The purpose is to understand the concept of the organization design and the impact on business performance. Walmart has a unique organization design, which has enabled it to become one of the top retail chains in the retail industry.
THE COMPANY (WALMART)
Walmart is a well-known retail firm in the USA. This company was established in1962 by Sam Walton. The main products of Walmart are Footwear, Clothing, Jewelry, Health and Beauty, Toys, Electronics, Furniture, Movies and music Home, Pet supplies, Craft supplies, Home improvement, Photofinishing, Sporting goods and fitness, Auto, Party supplies, and Grocery. The organization is operating globally. Revenues of Wal-Mart, according to 2018 reports are US$500.34 billion. This company deals with 2.3 million workers around the globe.
THE ORGANIZATIONAL DESIGN
Organizational design is a process of identifying the dysfunctional aspects of the business and shaping the new structure or design, which can align with the goals and objectives of the firm. After identifying the ineffective or dysfunctional aspects of the firm, the company usually makes plans to implement the new changes. The most important thing is to come up with a design that can integrate internal and external business environments.
The design of the organization must be effective and capable of embracing the change. With time, the management has to identify the need for the change and identify key areas to cover. It depends on the nature of the business and the intentions of the management to play with different areas of the business. Changing the whole structure or process is not a good approach because it is risky. Some small steps can shape the design or make some modifications, which can meet the purpose.
ORGANIZATION DESIGN IN WALMART
Walmart, the second largest retail chain in the world, has perceived the organization design as a process of decision making. For Instance, the management of this firm usually makes decisions about departmentalization, work specialization, chain of command, and formalization, the span of control, decentralization, and centralization. Walmart management makes effective decisions to design these processes.
Structure
Concerning the structure of the company, it is divided into different departments. Marketing, production, supply chain, human resources, Information technology, customer service, sales, and many other departments are established by the company. People in different departments have different job roles along with different responsibilities. Walmart depicts an effective chain of command. The power comes from the top management to the bottom line of the company. For Instance, the sales department is working under the leadership of the head of the sales department. Similarly, in all departments, power comes from the top, and managers have to report to the top management about the business or work process (Bartleby.com).
ORGANIZATIONAL CULTURE AND ETHICAL VALUES
Walmart contains an effective culture. The company gives value to employees. Four main components of Walmart is in the limelight, which clears the picture of the organizational design. For Instance, In the Walmart culture, the company gives values to the individual. Individual performance is appreciated and admired in this company, which enhances the visibility of motivation at the individual level. Another aspect of the culture is excellence. The firm is enhancing its excellence to improve the work process and come up with the quality of products or services for customers. It is a fact that the firm gives values and respect to individuals, which enabled excellent customer services to customers. Walmart creates the culture of teamwork, and it shows the integrity or harmony in the internal business environment. All actions from the supply chain process to end consumer are triggered by the integrity. Excellence, respect, integrity are key components, which are also key ethical values of the firm. Thus, the design of the company combines cultural and ethical values (Yates).
CHANGE PROCESS
In the organization design, the change is necessary with the time. In an innovative culture, the firm has to evolve with time to integrate with some new trends. In Wal-Mart, the change process is unique. For Instance, Walmart creates the building blocks of the change and initiates the change process, instead of making drastic changes in the internal business process, the firm takes baby steps. Walmart looks steady in the change process to avoid any negative consequences and resistance. These building blocks help to initiate small changes and create a positive impact. Interestingly, in the change process, the management creates the urgency a vision to streamline the change and communicate it to all key stakeholders. It is the first step of the Kotter’s change mode. Change urgency is a key to contain the readiness and get some early results. Vision and urgency are two strong pillars in the organizational design, which increase the capability of growth, consistency, and sustainability (Bariso).
INNOVATION
The organization design is in the limelight due to the innovation process. IT has been revealed that the company has evolved from the traditional Brick & Mortar business model to the prominent innovator to give tough time to rivals such as Amazon and many others. Innovation culture has been developed by integrating with modern technology. For Instance, the adaptation of facial recognition to target, free two-day shipping, and online voice shopping is quite visible, which justifies the innovative initiatives. The change and innovation are linked with each other, and it streamlined the pertinent organization design (Hyken).
The innovative culture of the company plays a vital role. It incentivizes the different innovative ideas and set-top priorities. People usually share knowledge. Manager’s cognition in different departments is remarkable, and it is due to effective knowledge share. The design is fit for the innovative culture. However, Walmart still has to work more differentiate and get a sustainable competitive advantage. The culture and design accelerated the growth.
DECISION MAKING PROCESS
The organization design depicts the rational model of decision making in this company. It looks like a complete process of decision making that involves many stakeholders. Besides, the decision making is not a favorite aspect of the area of the company due to many poor decisions in the retail industry. However, still, the current decision-making procedures align with the design of the organization. In rational decision making, organizational members at the top level notice the issue that needs a decision (Bauer).
The management gathers the information or navigates the relevant data to analyze the issue. Decision makers don’t focus only on a single decision. Multiple decisions are to be navigated by decision-makers to come up with the best solution. Interestingly, people are delegated at different levels to measure the decision regarding effectiveness. At the time of the implementation, the decision-making process concludes.
ORGANIZATION SIZE
The size of the company is increasing due to its financial capability and the rapid expansion. However, due to failure in many countries, the company is shutting down stores. However, still, the firm is operating with 11,200 stores in 27 countries. The expansion plan in Asian countries is still in the loop, and it can increase the size as well. However, internally, it is departmentalized. The internal size can be depicted in this chart
CONFLICT, POWER AND POLITICS MANAGEMENT
In Walmart culture, different effective strategies have been implemented by the management. For Instance, the most prominent conflict management strategy is accommodating. The firm usually accommodates parties to create the win-win situation to enable the working consistency. Giving the opposing side what it has to achieve is a good approach to sustain the business process. However, the chance of development resentment is always here. Walmart usually faces strikes, and it is due to dissatisfaction of different parties. Thus, critically, the conflict management strategies are not up to the mark, and some changes are needed.
INFORMATION TECHNOLOGY FOR COORDINATION AND CONTROL
It has been observed that the organizational design of Walmart creates the space for the management to adopt the latest technology. Recent upgrades by the company can help us to gain a competitive advantage over other competitors. With the use of information technology in the pharmacy section, the company wants to eliminate the paperwork trails and desk lines. In its massive stores, it seems a big change to enhance the customer experience. The management information system, decision support system, executive support system, and group decision support system are linked with an integrated management system in the company. It also justifies integrity, which is a prominent cultural value (Bariso).
ORGANIZATION DESIGN PRINCIPLES
The organization design is triggered by many principles. Some of these principles have been adopted. For Instance, declaring amnesty for the past is the key approach by Walmart that streamlined the change and innovation. If Walmart tries to change the process, it only streamlines the new strategy instead of focusing or communicating on the advantages or disadvantages of old strategies. It is the best approach to move forward and make a difference in the competitive market (Daft).
The company designs the structure after making the strategy and identifies the roadmap. Depending on key roles and responsibilities, the firm identifies sections, divisions, people and the necessary resources to make an effective structure. On the other hand, to enable the effectiveness, the firm usually fosters the top talent and efforts (Daft).
Another key principle that this company embraced is accountability. It creates a structure and culture in which every key stakeholder is accountable. The reporting system of the company is excellent. Bottom-line reports to managers and they further report to directors. Furthermore, the director reports to executives. With proper check and balance in the internal business process, it has successfully created the culture of accountability (Daft).
CONCLUSION
In the end, it is to conclude that the Walmart organization design is effective and pertinent to the modern business environment. Major elements of the organization design have been elaborated along with some key insights and examples. From the organizational structure of the organization design principles, Walmart has done well. Now, with the time, it has to make some changes in structure, culture, and processes. Due to technological intervention, the firm cannot sustain the business with the existing or traditional setup. It has to create a new processor design which can align with new business objectives in the retail industry. The competition in the retail industry is increasing, and it is a great opportunity to shape the design that can help to exist strongly in the external business environment.
Work Cited
Bariso, Justin. “Walmart Just Made a Huge Announcement That Will Completely Change How You Think About Walmart.” INC. INC, 20 August 2018. Web. 20 October 2018. https://www.inc.com/justin-bariso/walmarts-ceo-made-a-huge-announcement-that-will-completely-change-how-you-view-walmart.html.
Bartleby.com. “The Organization Structure of Walmart.” Bartleby. Bartleby, 19 January 2018. Web. 20 October 2018. https://www.bartleby.com/essay/The-Organization-Structure-of-Walmart-PK37ZQPMZRPS.
Bauer, Ted. “A lesson about decision-making from Walmart.” The Context of Things. The Context of Things, 25 March 2015. Web. 20 October 2018. http://thecontextofthings.com/2015/03/25/decision-making-and-walmart/.
Daft, Richard L. Organization Theory and Design. 12. South-Western College Pub, 2015.
Hyken, Shep. “Walmart Moves From Traditional Retailer To High-Tech Innovator.” Forbes. Forbes, 15 October 2017. Web. 20 October 2018. https://www.forbes.com/sites/shephyken/2017/10/15/walmart-moves-from-traditional-retailer-to-high-tech-innovator/#7037fa8f27bf.
Yates, Clinton. “A culture of corporate at Wal-Mart.” Washington Post. Washington Post, 4 December 2013. Web. 20 October 2018.https://www.washingtonpost.com/blogs/local/wp/2013/12/04/a-culture-of-corporate-at-wal-mart/?noredirect=on&utm_term=.8e2846378d2a.
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