Brief History Of Wal-Mart

After extensive consultation and engagement with numerous suppliers and businesspeople in the United States, Sam Walton, an American businessman, formed Wal-Mart Corporation in the year 1962.

Walton was a dedicated businessman who oversaw Wal-slow Mart’s expansion until it was formally incorporated in 1969 because of his exceptional administrative skills (Wei et al, 2013). Beyond this time, Wal-Mart saw tremendous expansion; three years after its establishment, it became one of the corporations represented on the New York Stock Exchange in 1972. The business kept expanding, and by 1989, it was regarded as the biggest retailer in the US. The company has continued to grow and expand its geographical scope of operation beyond the US into other areas such as Asia, Africa, and Europe. It is currently a well-known multinational corporation (HubPages, 2011).

Targeted Customers

Since Wal-Mart offers a wide range of products and services, its target customers are also wide and varied. The company employs the mono-segmentation model in which customers who aim at saving costs as well as finding value for what they pay for are targeted. This, therefore, negates segmentation based on factors such as age and gender. Wal-Mart particularly targets individuals of all ages who; are of low to middle income class, reside in urban areas, are cost-conscious, and are of a lower social class (HubPages, 2011).

Wal-Mart’s Communication Strategy

History indicates that Wal-Mart has always embraced technology. In the 1970s, for instance, the company was linking warehouses to stores using the communication systems of the day. As the company continued to grow and expand into the global market, it became necessary to maintain the highly interconnected network of people and processes through an effective means of communication. In the United States alone, for instance, Wal-Mart employs approximately 1.4 million associates. Furthermore, approximately 22% of the US population at least know someone working in Wal-Mart. Therefore, to ensure that this network of people is informed, a modern method of communication has to be implemented (Bliss, 2015).

The company recently launched its website, MYWALMART.COM, so as to offer its employees in the US a communication platform on which they can access the company’s vital information remotely (HubPages, 2011).

Adoption of this communication strategy made Wal-Mart successfully integrate and involve its employees not only in key operations but also in decision-making, hence cementing a good management-employee relationship (HubPages, 2011). The platform has also enabled the various Wal-Mart employees to connect with each other and share ideas on how to improve their services to the company (Bliss, 2015).

Moreover, the company has capitalized on social media where it uses social media sites such as Facebook and Twitter to reach out to a larger group of customers in the global market. The social media platform has not only facilitated the creation and expansion of Wal-Mart’s global customer base but has also presented an easy way in which the company gets feedback from its customers as well as employees. However, the company has not yet embraced other advanced technologies such as virtual and augmented realities which other businesses such as MacDonald’s are employing (Wei et al, 2013).

Methods Of Developing Managerial Decisions

Wal-Mart management basically applies the incremental theorem of decision making, which entails combining experience, intuition, existing rules, and consultations to arrive at decisions. The rationale approach is rarely used because; the company specializes in a wide range of business operations, which cannot be pinned down to a specific decision-making rationale that applies across all business operations. Furthermore, a rationale approach for such a huge company as Wal-Mart would consume a lot of time and resources, especially in evaluating the possibly wide range of alternatives so as to make a good choice (HubPages, 2011).

Wal-Mart has also employed the creative decision-making approach, which basically entails making decisions directed towards new and better ways of conducting business as well as saving costs. For instance, in the year 2015, to wade off competition from other retailers, Wal-Mart’s executive management decided to offer free pick-up delivery services to its customers. This was a creative move to lure more customers to its side. As a result, the company saw its volume of sales grow by approximately 10% from the previous year’s (HubPages, 2011). However, in accordance with the definition of a sustainable competitive advantage, this creative move can be perceived as a temporary solution to competition because the strategy can easily be duplicated by other retailers e.g. Aldi, which has also started offering free pick-up and delivery services for customers who order for products online (Wei et al, 2013).

Whereas most management decisions are based on the creative and the incremental approaches, these approaches cannot always be trusted in every decision-making process. There are instances where the rationale approach has to be considered for sound decision-making. Such instances include employee recruitment and selection (Wei et al, 2013).

Human Relationship Structure Of Wal-Mart

Wal-Mart has adopted a relationship structure based on the quality service to customers and respect to individuals as described by (Bliss, 2015). According to Bliss (2015), customers are the most important elements in the success of any business hence the business must be committed to maintaining these customers. Consequently, he puts across three key areas of commitment that any business wishing to maintain good relations with its customers must practice; service to customers, respect to individuals, and constant endeavor to excel.

Respect for individuals implies that a business considers all of its stakeholders as important elements in the success of its operations, hence relates to them in a more dignified manner (HubPages, 2011). This commitment has been a central element in Wal-Mart’s daily operations primarily due to its global business perspective. This core operating principle has enabled Wal-Mart to successfully penetrate the global market (Bliss, 2015). As a multinational corporation, Wal-Mart had to employ local adaptation strategies so as to prevent a clash of the parent company’s culture with the cultures of its subsidiaries. This probably came after Wal-Mart experienced a drastic failure in penetrating the German market by enforcing American policies, which were contrary to German culture, in German stalls (HubPages, 2011). Ever since, respect to individual belief has always been a commitment of Wal-Mart management towards its stakeholders.

Other than respect for individuals, Wal-Mart’s human relationship structure is also based on the service to customers. Service to customers refers to the commitment of a business towards offering quality products and/or services to its customers accompanied with exceptional human relations to build profound trust between the company and the customers (Bliss, 2015). This culture has been in existence at Wal-Mart for many decades ever since it was incorporated by the founder of Wal-Mart himself, Mr. Walton (Wei et al, 2013).

Ethical Issues

In as much as Wal-Mart can be praised for its unwavering commitment towards service to customers and respect towards its stakeholders, there is a wave of criticism surrounding its adherence to human rights. Towards the end of the year 2013, for instance, NLRB found that Wal-Mart had tried to curtail the freedom of demonstration legally bestowed upon its workers by the Federal Government. According to the report by NLRB, Wal-Mart had threatened to punish any employee that would participate in the Black Friday strike. A further analysis of the company revealed poor working conditions for employees, relatively lower wages, insensitivity to healthcare concerns, and policies that negate employee trade union rights. As a result, NLRB concluded that the high turnover rate that Wal-Mart had experienced that year could be attributed to its strong policies that violate employees’ rights (Bliss, 2015).

Furthermore, research conducted by the University of Oklahoma revealed that Wal-Mart had shown traces of racism in its employee sourcing policies whereby the relative employment rates in black-dominated counties were lower as compared to white-dominated counties. In the year 2007, Wal-Mart was charged with a gender-based discrimination lawsuit for allegedly discriminating against female workers in matters regarding compensation, wages, and promotion. Even though the US Supreme court ruled in favor of Wal-Mart, the company’s reputation has since been at stake (Wei et al, 2013).

Recommendations For Improvement

During decision-making, the company management should not always rely on creative and incremental strategies because they do not offer a good approach during employee recruitment and selection. Therefore, Wal-Mart should employ the mixed decision-making strategy in which the creative, incremental, and rationale approaches are employed either concurrently or when need arises. Precisely, the rationale approach should be applied to decisions regarding employee sourcing and formulation of policies related to employee sourcing, management, and appraisal. The creative decision-making approach should be well applicable to the generation of cost-effective ideas for a sustainable competitive advantage. While Wal-Mart still has incumbency advantages (Bliss, 2015), it will be required to unleash its power of creative decision-making in the development of a more sustained competitive advantage. The incremental decision-making approach should be well applicable in emergency situations as it follows intuition, experience, and advice from consultation to arrive at an informed decision.

In as much as Wal-Mart depends on digital communication technology for its communication strategy, the company should always be on the alert for any shifts and ‘changes in modern communication technology (Bliss, 2015). For instance, the company should consider infusing such technologies as virtual and augmented realities in its operations to boost sales volume.

Ethical issues, particularly human rights violations, are the main concern that Wal-Mart should focus on. These violations are likely to ruin its reputation as well as cause a high employee turnover, both of which have negative implications for the company. The company should consider revising its internal policies regarding employee management and human rights observation to prevent these negative implications.

Conclusion

Wal-Mart is a multinational corporation specializing in retail services. Having been established back in 1962, the company has grown rapidly and is now the largest retailer in the US. This paper aimed at analyzing Wal-Mart with respect to its target customers, managerial decision systems, communication strategies, and ethical considerations. Findings indicate key problems in managerial decision systems, communication strategies, and ethical considerations. As indicated above, recommendations have been provided on how Wal-Mart should improve its business operations.

References

Bliss, S. (2015). Walmart’s Social Network Revolution. Retrieved 17th June 2015 from < https://www.melcrum.com/research/harness-digital-technologies/walmarts-social-network-revolution>

HubPages Inc. (2011). Knowledge Management- A Case Study of Walmart. Updated 25th May 2011. Retrieved 17th June 2015 from < http://seo-kisumu.hubpages.com/hub/KNOWLEDGE-MANAGEMENT-A-CASE-STUDY-OF-WALLMART>

Wei, L., Wang, S., Zhang, J. and Ao, Y. (2013). Strategic Analysis for: Business 478 D200 Group 6. Retrieved 17th June 2015 from < http://www.sfu.ca/~sheppard/478/syn/1137/G_6_1137.pdf>