Organizational effectiveness is key criteria to evaluate organizational behavior within organization. It includes various perspectives that coordinate with internal and external system to ensure high organizational performance and long run sustainability through learning and development. This paper includes organizational effectiveness analysis on Wal-Mart in relation to four perspectives and then its cultural analysis. Second part includes recommendations to improve effectiveness. Wal-Mart is a renowned global retailer. It is a US based company started in the year 1969 (walmartstores.com, 2011). It entered Canadian market in the year1994, headquartered at Ontario. It has almost 1170 stores with strong online presence (Wal-Mart Stores, Inc., 2008).
According to open system perspective, an organization is influenced by external environment for its resources and impacts it through its output and there is a close internal system that can exists without depending on external environment, this internal system is responsible for transforming input into output (Miller & Herman, 2004). To successfully managing open perspective organizations need to continuously monitor their environment and establish synergy with the same. Company runs through a centralized information system through common platform that helps in sharing information with easily. As company follows a centralized or similar approach in all its store operation, it helps in easy employee transferability and cost efficiency. However, to fit with external environment need, Wal-Mart decentralized its decision making as local market and merchants can best understand and meet local needs.
Wal-Mart needs to continuously interact with its suppliers, customers, society and government to serve them better. To understand external environment better continuous feedback is being exchanged through customer, store, and employee and supplier feedback system. In 2015, there were lot of negative feedback regarding Wal-Mart store on social media which leads to fall in its profitability and stock fell by thirty percent (Fornell, 2007). Then company launched a customer incentive based in store surveys to rank their store, and it was updated by store managers and responsible for implementing quick changes. It helped in revamping brand image by the end of same financial year. There is also presence of in store 360 degree employee feedback system that helps in performance enhancement. Wal-Mart has also learnt its lesson that to remain sustainable and effective, feedback and change implementation is crucial.
Traditional organizational approach focused more on physical resources and good processing; however with development most important input is knowledge management. Learning perspective aims toward analyzing organizational ability to acquire, store and use knowledge. It involves analysis of intellectual’s capital that includes human capital, knowledge captured within system and customer derived values and its processing.
Wal-Mart has strong structural capital, its home grown technological system helped in tremendous business development, everyday low price and effective supply chain management. It is a pioneer in bar code scanning, massive data warehouse management that help in analyzing sales information. Retail-link is software used for data sharing and accumulation between company and its suppliers. Company focus on innovation and building new technologies rather than buying, it helps in successful alignment between strategic requirements and end solutions. Company invest diligently in knowledge development, it has also entered e-commerce market with ten different websites worldwide.
It focuses on continuous staff learning, for instance safety is the major concern for Wal-Mart, to ensure this, company launched a micro learning program in form of a game involving 150 distribution center and more than 75000 employees part of it, online; at any time during work and employee can log in to game portal and spend 3 to 5 minutes time in playing game by answering safety related questions. It helped in 54 percent improvement in safety. Wal-Mart provides both classroom and floor training to all employees concentrating on soft skill and retail skill. Company also focus on customer and supplier relationship management, it launched various programs to ensure low price high quality service delivery to consumers. It focuses on providing excellent in store experience to customer, reaching them in whatever way they want, communicating continuously, providing customized services to exceed expectation and gain long term customer loyalty. Therefore, Wal-Mart focuses on building all three element of learning perspective.
All other organizational perspective focuses on process and resources, this one is aimed towards relationship building. It focuses on relationship management with anyone having stake in the company, be it employee, customer, supplier government, society at large. Wal-Mart is considered as customer centric organization, it focuses on providing product at lowest possible price by managing quality. It is crucial to manage interest of all stakeholders, instead of focusing on one or two who impact profitability. Wal-Mart has also been accused of using unethical practices such as child labor, poor sustainability. Investors were considered at top priority, their focus was to increase profits, minimizing operational cost and higher dividends. However, it caused labor issues in the company due to poor wage system. It caused conflict of interest between customer, investors and employees; there were several accusations on management for poor labor treatment, pushing to work on sick days, unethical practices, gender discrimination etc. For example, women employees filed law suits against Wal-Mart for sexual discrimination and biasness (Vaidyanathan, 2011).
Proper implementation of stakeholder perspective requires incorporation of values, ethics and corporate social responsibility within operations. Four key business values of Wal-Mart Inc. include customer service, individual respect, integrity and excellence. Ethical values establish moral platform for deciding right or wrong. Wal-Mart consider itself an ethically run organization but there are issues raised by employees, which raises question on its authenticity. For instance, recently in August 2018, Wal-Mart employee made a lawsuit as company does not provide proper seating to cashier (Fafan, 2018). CSR include activities that aimed towards society development, Wal-Mart aims toward 100 percent renewable energy, zero waste and selling sustainable products. Its global responsibility plan helps in economic development, reducing greenhouse emission, promote responsible sourcing and develop local communities by following triple bottom line approach of development (Bose, 2012). There is need to improve employee relationship with managers as this is one of the main reason for employee dissatisfaction.
Culture is a complex phenomenon that includes knowledge, belief, art, law and other customs followed or accepted by individuals from a particular society. Company deals with almost 245 million customers every week worldwide (Deal & Kennedy, 1982). Four core value pillars include service, excellence, integrity and respect. Organization follows a cult-like culture which flowed from top management. Wal-Mart emphasizes on communication and employee participation that gives ownership. Wal-Mart has low wages as its anti-union policy but it makes up via incentives. Employee interviews highlights that supervisors at store ensure daily communication, lunch breaks are monitored closely. There is mix of team performance as well as hierarchy. Employees are treated with respect, opportunity to make suggestion is given but there is very low privilege to advancement. Two way communications is followed, whatever be the level supervisor make sure to interact and listen to suggestion and encourage working with enthusiasm (House, 2004).
Organization culture is shaped by vision and belief system of its founder, Sam Walton. Manager ensures positive enforcement with feedback, motivational posters around stores, corporate commitments. Mission states that “We save people money so they can live better. (Wal-Mart Stores, Inc., 2008)”Wal-Mart artifacts include physical layout of store that include uniform store structure and space. All employees wear same dress, blue vest worn by employees include their name tags to ensure staff accessibility. There is Saturday morning meeting ritual that was started by founder to discuss product and practices and change requirements, it still practiced religiously.
Unique policies adopted by the company include open door policy to ensure free communication, slowdown rule to ensure any query must be resolved within 24 hours, grass root process that involve taking ideas and suggestions, 100 foot rule to ensure eye contact with customers, servant leadership and Wal-Mart cheer (www.amanet.org, 2017). Proper recognition is given for hard work. Wal-Mart has a strong organizational culture that lives by its mission.
Above discussion presents analysis on organizational effectiveness, followed by solutions that would help in future improvement.
Though Wal-Mart has intensively focused on investor and customer satisfaction, it’s time to concentrate on employee satisfaction. Happy employee helps in uplifting customer satisfaction and loyalty. Firstly, company need to increase its employee wages; provide them adequate chance of growth and being full time employees. As in one of the interview, employees says there is no opportunity for extra income, so management needs to launch small pilot projects that gives chance for extra earning to needy employees.
It is also crucial to listen to employees and their problem seriously and resolve them quickly. Sometime working in a set pattern in store makes work monotonous, so management needs to develop new ways that help in providing flexibility in working pattern without affective customer interaction. Employee happiness should be kept as key priority.
To enhance ethicality in production and supplier, focus should be led on removing unethical work practices by collaborating with NGO, social experts, suppliers to address social issues in supply chain and maintain work dignity. Company should also launch new training programs to provide more support to farmers at supplier level.
There are three key pillar of learning perspective, it include human capital, stored knowledge and relationship management.
Firstly, it is advice to ensure recruitment of culturally fit employees only. For example, Julie Roehm focuses on achieving organizational success through price cutting strategies and downsizing merchandizing. This unconventional management led to poor customer satisfaction and negative branding. There is no need to stretch cultural fit, as it causes employee failure at job; they impact changes that conflict with present organizational culture and value. Therefore, it is advised to be realistic about organizational expectation, while recruiting it is crucial to see the methods adopted by executives to achieve those high results as both means and end matters.
Apart from this, relationship management requires giving equal importance to all key stakeholders, such as employee, customer and shareholders. Adequate feedback and training must be given to all employees. There is need to implement a top down approach of learning to includes all in the process.
Conclusion
Organizational effectiveness helps in understanding and enhancing efficiency by matching its actual profitability with expected one. It is difficult to measure organizational effectiveness in actual terms as it is qualitative in nature. Wal-Mart is operating open system by ensuring adequate management of its entire stakeholder through learning and development. However, there is need to improve its employee satisfaction and learning mechanism further through enhanced feedback and training programs.
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