walmart hrm case study

Organization Culture at Wal-Mart

January 8, 2010

Case Study Contents

Introduction.

• Wal-Mart – Company Background
• Sam Walton and Wal-Mart’s culture
• Exhibit: Unique values that support Wal-Mart’s three basic beliefs
• The 10-Foot Rule – Wal-Mart’s secret to customer service
• The Sundown Rule
• Open-Door Policy
• Servant Leadership
• Rank-and-file profit sharing
• Grass Roots Process – Associate Opinion Survey
• The Wal-Mart Cheer
• Wal-Mart’s efforts to make the company an even better place to work
• Employee Development programs
• Combining Technology and empowerment
• Awards and Recognitions received by Wal-Mart
• Wal-Mart – Timeline
• Wal-Mart – Quick Facts
• Wal-Mart – Various Store Formats
• Wal-Mart – International operating formats
• Sam Walton’s ten rules for building a business

“ Wal-Mart continues to execute well and deliver solid results in a challenging economic environment “- A Goldman Sachs analyst

“ What makes ordinary people do extraordinary things?” Sam Walton once asked. “Aren’t we a group of ordinary folks? We really are. And I think we, together as a team, have done extraordinary things. We’ve all grown, we’ve all accomplished much more than any of us ever thought that we could. “- Sam Walton, founder of Wal-Mart

“ We are a people association supported by one million associates. Much of what we do centers around individual stores. We’re in a labor-intensive customer service business. Associates can’t treat customers as number one if they are not treated that way. ” – Susan Oliver, Wal-Mart’s SVP of human resources in 2005

In August 2008, Wal-Mart Stores announced that its profit rose 17 percent in the second quarter and that it is raising its full-year forecast. In a challenging economy, the world’s largest retailer benefited from low prices and its moves to cut costs. Wal-Mart’s President and Chief Executive Lee Scott said that, “While inflation and higher fuel costs are pressuring suppliers, retailers and customers worldwide, we’re confident that Wal-Mart is well positioned for this economy.” Chief Financial Officer Tom Schoewe attributed the better second-quarter profits to tighter inventory controls, which led to fewer markdowns on merchandise. One of Wal-Mart’s goals – which it successfully met – was keeping inventory growth at half the rate of its sales growth which it successfully met. In contrast, sales at department stores and specialty retailers were lagging behind.

What is the key to such good results? Wal-Mart overhauled its strategy. Instead of announcing any price increases to cope with the tough economy, the company slashed its expansion plans. It refocused on lower prices, improved the mix of merchandise offered, cleaned up its stores and provided friendlier and faster customer service. But there is more to Wal-Mart’s success over the years than just tighter inventory controls and lower prices.

Wal-Mart is truly a great company. A strong organizational culture is the foundation for making a good company a great one. The secret to Wal-Mart’s success has long been attributed to its strong culture. Analysts like Jim Collins believe that Wal-Mart had the kind of ‘cult-like’ culture that is shared by all great companies. Wal-Mart employees are referred to as ‘Walmartians’ which is a sign of a unique culture shared by them. This culture is responsible for a company of this magnitude to be able to sustain its entrepreneurial spirit decade after decade.

Since its early days, Wal-Mart achieved remarkable growth rates and was the first trillion dollar company in the world. In 1999, Wal-Mart became the largest private employer in the US with 1,140,000 Associates. But with amazing success also came criticism. Wal-Mart was sued many times and even held the record for being sued the maximum at one time. Its practices and culture were held responsible for killing small local retailers. It was also criticized for gender-based discrimination, its overtime policies and using sweatshop products. Download case study PDF file to read more…

Walmart's Workforce of the Future

Any discussion of the future of retail—or how we work—has to include Walmart. As of 2017, 90 percent of the US population lived within 10 miles of a Walmart store; with 11,766 locations worldwide and $514 billion in annual revenues, the discount store also has the distinction of being the largest private employer in the United States, with 1.5 million workers (2.2 million worldwide).

But that size and dominance doesn’t make Walmart immune to pressures faced by any other retail operation. In the second-year Harvard Business School course Managing the Future of Work , Professor William Kerr explores how technology and demographics are changing the way companies like Walmart, and their workers, operate.

“The pace of change in the retail sector is truly extraordinary,” says Kerr, the D’Arbeloff Professor of Business Administration and co-director of Harvard’s Managing the Future of Work initiative . “That requires a lot of reskilling of employees and hard choices, in an uncertain environment, in terms of how to deploy capital.”

“This digital transformation creates new jobs, but, more important, it changes the nature of jobs, even entry-level ones.”

Kerr captures that dilemma by detailing the scope of Walmart’s operations and current strategies in the case “Walmart’s Workforce of the Future.” Published in April, it offers an overview of the considerable investments the retail giant is making in its e-commerce infrastructure, in its employee training and support, and in technological innovations such as robot workers and in-house incubators.

Walmart fights a revenue drop

The case details how the rise of ecommerce (and the success of Amazon in particular) affected Walmart’s discount stores (which sell general merchandise but limited grocery items), resulting in a decrease in annual revenue at those stores from $142.5 billion in 2009 to 97.7 billion in 2018. During the same time period, revenue at Walmart’s “supercenters” (larger stores that also sell groceries and often include services such as eye care, beauty salons, and photo studios) increased by 16 percent, from $409.9 billion to $476.2 billion. (Walmart closed 2,214 discount stores or converted them into other formats from 1993 to 2018, with 2,576 supercenters opening during that time.)

In addition to increasing Walmart’s supercenter footprint, CEO Doug McMillon’s omnichannel strategy focuses on a seamless approach to the customer experience, with an emphasis on employee training and improved ecommerce and automation technology, both on the floor and in back office roles.

One foundational move to beef up its technology was Walmart’s $3.3 billion acquisition of online retailer Jet.com in 2016, an investment that immediately improved its ecommerce infrastructure. Walmart has also piloted and invested in robots to perform a variety of functions, from unloading trucks to scrubbing floors to scanning shelves and bringing items out of storage for curbside delivery orders. But public statements by senior executives made it clear that Walmart was equally committed to the complex, costly effort required to train its human workers.

“I want to be clear that we don’t believe technology is the answer to everything,” McMillon stated in a 2017 annual shareholder meeting. “The secret to success will always be our people. … It will be our humanity that drives our creativity, powers our competitive spirit, and keeps us out in front.”

Technology changes the nature of work

But at the same meeting, McMillon also acknowledged how technology changes the nature of work itself, a perspective echoed by Walmart Chief Sustainability Officer and Walmart Foundation President Kathleen McLaughlin. “…we’re now a tech company as much as a retail company,” Mc Laughlin said. “This digital transformation creates new jobs, but, more important, it changes the nature of jobs, even entry-level ones.”

Those demands require more of workers—and an equivalent commitment to re-skilling and compensation. In the case, Kerr cites Walmart’s investments in wages and training for employees of $1.2 billion and $1.5 billion in 2015 and 2016—part of a move that boosted starting pay for frontline associates from $9 per hour in 2015 to $10 in 2016 (it hit $11 per hour in early 2018). Yet in 2015, announcement of a wage increase resulted in a share price drop the following day of 10 percent, on news that the increase would cut earnings per share by 6 to 12 percent in 2016. It’s a dynamic that lays bare for MBA students the consequences of senior leadership’s choices, says Kerr.

“It’s easy to be critical and say that Walmart should be doing more, but when students review the company’s actions over the past five years, they have to confront the fact that every time the minimum wage went up, the stock price went down—and meanwhile, competitors have better margins.”

The case also outlines Walmart’s approach to training its workers, including its focus on building long-term, transferable skills through efforts such as Pathways, a program that teaches associates about the retail business model, explains the “why” behind the work they’re asked to do, and helps develop the soft skills that are useful in any field. Workers who completed the program received a raise and had increased job opportunities; however, many complained that it lacked clarity and that it took too long to move through the various modules. While Walmart planned for 500,000 employees to go through Pathways in 2016, the initial rollout was considerably lower; as a result, Walmart needed to revamp some parts of the program to speed up its completion rate. (Its Academies program, focused on training and empowering hourly supervisors to directly manage team members, faced similar challenges.)

In another move to build a more skilled, educated workforce, Walmart introduced a program in 2018 that offered workers the opportunity to enroll in online degree programs for $1 a day in business, technology, and supply chain management at three different universities; in June 2019, the program expanded to six universities and 14 areas of study, including cybersecurity and computer science. Widely hailed in the press for the opportunity it offers workers to graduate from college debt-free, the program has seen 7,500 employee enrollments in its first year.

“There’s so much to unpack in the choices that Walmart is making,” Kerr says, remarking that management has also introduced virtual reality goggles to train employees as well as an app, Spark City, that uses a game-type simulation to teach workers about store processes and customer service. Walmart has even crossed over with the gig economy by partnering with platforms including DoorDash, Postmates, Uber, and Lyft for package and grocery delivery.

‘You’re the CEO of Walmart’

So, is Walmart making the right investments for its future? “We spend a lot of time in conversation in this class,” says Kerr. “I’ll say, ‘You’re the CEO of Walmart. What would you have done differently? In 2030, what will your workforce look like? How much of your sales will be in-store, and how much online?

“An early indication of the uncertainty of the future is that, with a bunch of smart MBAs, we had a wide, wide range of opinions as to what the future looks like. From some putting all their chips on ecommerce to others who see Walmart as having a powerful position, particularly in more rural areas, where it can be the one place you go to get your prescriptions, do your shopping, and pick up your ecommerce packages—so building on that, rather than trying to become Amazon.”

Analysts generally give Walmart strong marks for how its investments in technology and training have set it up to compete.

“The progress that they’ve made and the strength they still possess has been working out for them to a good degree,” says Kerr. But it’s too soon to tell whether they have established themselves in a way that will allow them to truly excel. “That’s where the jury is still out. They are still defining the Walmart of the future.”

About the Author

Julia Hanna is an associate editor of the HBS Alumni Bulletin [Image: artran]

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Case study on human resource management of Walmart

Task: Human Resource Management Assignment: Challenges Encounter by Walmart 1. Choose an organisation in the retail sector. Provide a brief introduction about the selected company e.g., its core key businesses, market size, geographical operations etc. 2. Highlight the external and internal challenges the organisation is currently facing and will be facing in the future. 3. Discuss TWO (2) key HR functions that will be impacted by these challenges. You should provide reasons why these functions are affected. 4. Provide specific strategic HR recommendations to address these challenges. These recommendations must support the organisation’s objective. 5. Relevant theories, concepts and models must be applied to support your arguments

Introduction This study developed in the human resource management assignment aims to evaluate the strategic function of human resource management of the U.S. largest and fast-growing global retailer store named Walmart. Before determining the issues, analyzing the background is essential that is also described in this study. Both types of challenges such as internal as well as external are also defined with suitable strategies that help to overcome the issues as well through the function of human resource management (HRM). The key factors and a set of recommendations are also defined in this study. The main purpose of this study is to determine the challenges faced by the retail store and suggest suitable solutions as needed.

Company background The U.S based company, Walmart is known as a rapidly growing company as it sells a wide variation of merchandise at a very low and affordable price. According to the financial records, between the years 2005 to 2014, Walmart collected over 3.9 trillion dollars from net sales (Statista 2021). In the year 1962, on 2nd July this retailer company was founded in Arkansas of the U.S. and from then it has spread its span in a well-being manner. As a result, now the company has more than 10,500 stores along with e-commercial websites (Walmart.com 2021). Over the 50 years, it has built a loyal and strong customer base by stayed strong to the purpose and offers daily-based needs at low price with consistency. Surprisingly, according to McMillion the most selling item for Walmart is ‘banana’ in the year 2020. The fact is that the bananas of this store are totally organic and come from Central America or Mexico. The merchandise of Walmart is using approx 70-80% of the Chinese product along with 20% of America-based products (Son et al., 2018). The Walmart store in the Crossgate Commons is considered as the biggest Walmart as it occupying in two floors with a large area of 260,000 sqft.

Figure1: economic growth graph of Walmart by net sales (Source: Statista 2021)

Evaluation of the internal and external challenges External:Although Walmart is known as the most popular retailer, it also faced some challenges such as joint venture, negative reputation, stiff competition along with business acquisitions constantly in the markets of foreign (Colacicco 2018). It struggled from the competition in the market of North America as well as in South Korea. It dominates about 2% of the food market of Germany but still, a number of stiff competitors are there who raise issues. In the market of Mexico and Canada, it has tough competitors like Giant tiger, Soriana, Kmart, ShopKo, Costco whose create barriers in the path of well-establishing. Also, various cases were reported against Walmart related to exploitation of the employee such as low price and wages, sexual harassment issues (Leighton 2018). These issues create barriers to the expansion as well as ruin the cultural tradition and values for the company. In the future, it creates issues in the path of expansion also.

Internal:Besides this, the main problem that arises most from the employee is low wages. Walmart recruited a large number of employees but not paying the appropriate wages that cause problems for the employees to bear family costs as well (Pandey et al. 2021). This internal problem of low wages affects the brand reputation. The management of the corporation was reluctant many times for increasing the wages but this is not solved yet. In the future, it creates issues in employee recruitment that affects the productivity of the organization as well.

The impact on the key factors of the HR function For overcoming the key challenges faced by this largest retailer, it has to be identified the key factors from the management that impact the most.

Human Resource Planning (HRP): The planning procedure of human resource management is the key factor as it defines the statistics for the employee management as well. According to the Transaction cost theory by Williamson in the year 1986, states that the optimum infrastructure of the organization is the factor that helps to attain the efficiency of the economic structure by reducing the exchange of the cost (Rindfleisch 2020). It also considers as the economic theory that gives a framework structure by analysis for obtaining the contractual relations for the governance structure across the supply chain. For improving economic efficiency a proper human resource planning is needed (Mishra 2017). In this case, the infrastructure of the HRP of Walmart faces the problem like stiff competitors in the path of establishing their brand value due to the lack of a proper HRP. The organization fails to maintain strategic planning in a well-being manner which is effective for creating pressure on the competitors.

Selection and Recruiting: The process of selecting and recruiting suitable employees is the key responsibility of an HRM. For maintaining sustainable growth along with the brand reputation it is important to select and recruit the appropriate employee by the HRM (Azam, and Qureshi 2021). Without a suitable employee, an organization is lead forward to the loss and also has lost its reputation as well.

According to the theory of ‘strategic contingency’, that represents the organizational theory with suggesting the effective order. It states that HRM needs to attach well to the organizational aspects in both internal and external environments as well (Shah, and Khan 2019). It assumes that departments within an organization need experts who are able to manage the labor division and creates contingencies that are strategic well. By controlling the contingencies, a good HRM can serve the base of the Intra organizational power as well. For Walmart, the facts of human resource theory are not working well as they are failed to managing the wages and sexual issues raised by the employees. It leads to arises challenges like employee exploitation.

Strategic Recommendation The human resource strategy needs to focus more on the employees by doing everything possible for their satisfaction by reducing the expenses that result in the ability to offer the lowest cost that creates pressure on the competitors as well. They need to assess the workforce capabilities by using various parameters and go ahead proactively to face the competitors.

For overcoming the problem of low wages for the employees they should follow the theory of ‘Wages Fund Theory’ as it states that wages vary on the relevant capital amounts for the labor force’s size and worker’s payment. According to this theory, wages vary on the number of employees with the fund (Di Pietro, Monaghan, and O'HaganLuff 2021).

Walmart needs to determine the fund first then occupy the recruiting process instead of recruit a large number.

The HRM function needs to be more focused to create synergistic teamwork that makes the employees highly productive as well as creates pressure on the competitors by maintaining a high level of standard in the supply chain management. They need to develop some development and training programs that help to improve productivity as well.

Another theory of management named ‘Systems management theory’ states that the type of large business needs to work harmoniously so that the system function can be regulated optimally (Dundon, and Rafferty 2020). Based on this theory Walmart needs to be more focused on promoting the appropriate employee instead of recruiting new as well.

Conclusion Walmart is a brand that has a large expansion globally but faces issues in the path of establishing its significance as well. This study clarifies that most of the issues arise mainly due to the lack of managing power of the existing management. By implementing the recommendations and overlooking the key factors they can easily improve the barriers for overcoming the challenges that they faced. From the above study, it can be concluded that the Arkansas-based retailer Walmart has a good infrastructure but needs some strategic changes in human resource management that improve the enhancing factors for the expansion.

Reference list Azam, M.U.H.A.M.M.A.D. and Qureshi, J.A., 2021. Building employer brand image for accumulating intellectual capital: Exploring employees' perspective in higher educational institutes. Estudios De EconomiaAplicada, 39(2), pp.1-15. [Avaialble at: https://www.researchgate.net/profile/Jawaid-Qureshi/publication/349167953_Building_Employer_Brand_Image_for_accumulating_Intellectual_Capital/ links/6101805e1e95fe241a95a905/Building-Employer-Brand-Image-for-accumulating-Intellectual-Capital.pdf] Colacicco, G., 2018. Internationalization decisions in the retailing sector: Walmart in South Korea. [Available at: http://tesi.luiss.it/22478/1/680911_COLACICCO_GIANLUCA_LUISS_THESIS_% 20Gianluca%20Colacicco_680911.pdf]

Di Pietro, F., Monaghan, S. and O'Hagan Luff, M., 2021.Entrepreneurial finance and HRM practices in small firms.British Journal of Management. [Available at: https://onlinelibrary.wiley.com/doi/abs/10.1111/1467-8551.12493] Dundon, T. and Rafferty, A., 2018. The (potential) demise of HRM.Human Resource Management Journal, 28(3), pp.377-391. [Available at: https://www.sciencedirect.com/science/article/pii/S0148296320304112]

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Strategic Human Resource Management at Wal-Mart Stores Report

Introduction, overview of wal-mart, the organizational chart of wall-mart, local and foreign suppliers, the assessment of shrm in wal-mart, recommendations for the improvement of shrm in wal-mart, reference list.

Strategic Human Resource Management (SHRM) is an indispensable element for the performance of the enterprise since it supports the activities of each departments or business division and helps the organization achieve its long-term objectives. The tasks of the human resource manager are focused on the continuous improvement of the labour force. His/her strategies should be in line with the needs of the organization, its mission, and vision.

Their responsibilities of the professionals include selection and recruitment, recognition and rewarding, appraisal, employee development, and succession planning. This paper is aimed at analyzing SHRM in such a company as Wal-Mart Stores, Inc. In particular, it is necessary to determine whether SHRM in this company is consistent with its overall business strategy and with its current needs. This paper will also discuss the impact of internal and external environment on HR polices, pursued by the management of Wal-Mart.

By doing that we will be able to single out strengths and weaknesses of SHRM and make recommendations that could improve it. Yet, at first it is vital to understand the overall business strategies at Wal-Mart, the structure of this company, its organizational culture, and most importantly the role of SHRM.

Wal-Mart is one of the largest retailers in United States and all over the world: the company handles operations through super centres, and discount stores. Currently it operates such as China, Canada, Brazil, Japan, and United Kingdom. Among its major strengths, we can single out effective distribution system, satellite information system, and effective inventory management (Cravens et al, 1998).

They enable the company to reduce operational expenses and subsequently pursue the policy of cost leadership. Overall, the current mission of the enterprise is to retain the status of the world’s leading chain store by “helping people save money so that they could leave better” (Wal-Mart, 2010, unpaged). SHRM is instrumental for the achievement of these objectives. One of the major characteristics of Wal-Mart is decentralized structure.

Overall, HR managers serve the needs of every division of the organization; the only exceptions are suppliers. It is an inherent part of every department. At the given moment, the company employs more than two million employees (Wal-Mart, 2010, unpaged), and it would not be an exaggeration to say that the role of SHRM becomes crucial.

We need to mention that the organizational Wal-Mart can be described as role culture, which means that each of the employees has clearly delineated duties and authorities. More importantly, there is a very distinct and complex hierarchy, for example, there are heads of departments, location managers, facility managers, technology managers, and so forth (Peterson, 2005).

To some extent, this complex hierarchy makes employees believe that they will be able to climb career ladder. As Coleman Peterson argues, this structure makes people believe that “true opportunity exists” (2005, 88). This argument can be better elaborated by means of chart.

As we can see, Wal-Mart cannot be called a flat organizations since there are many layers between top-management and front-line personnel. On the hand, the culture and structure of the company helps to retain employees; thus, Wal-Mart does not have to spend extra money on hiring and recruitment; however, this hierarchical culture may slow down the decision-making within the company.

Therefore, it can be viewed as both advantage and disadvantage. These are the key issues that a person should take into account while assessing strategic human resource management in the company.

The Influence of External and External Factors

At this point, we need to describe those factors, which drive SHRM in this organization. At first, we need to speak about legal, political, and economic environment and their impact on HR policies in Wal-Mart. Over recent years, this company has recent years, this company has been often criticized by political activists, who believe that it does the company does not want to raise the wages of its employees, and does not offer health insurance to them (Spotts. 2005).

To some degree, it forced the company to increase the remuneration, offered by employees. More importantly, one should not overlook the increasing legal pressure, since the company has faced numerous lawsuits that were caused by poor working conditions and discriminatory policies toward the employees, supporting unionization (Spotts, 2005, p 87). This pressure induced the management to focus more in the needs of the workers.

It is possible to argue that the SHRM in the company is affected by two opposing forces: 1) willingness to be or at least to appear a responsible corporate citizen, and 2) the willingness to remain profitable. Yet, one should not overlook the importance of competition : the thing is that Wal-Mart’s major rivals, for example, Costco offers better health insurances to the workers. In turn, the management of Wal-Mart attempts to improve its work practices.

The objectives of SHRM in Wal-Mart

The importance of an active, healthy human resource management system is recognized throughout Wal-mart. At the business level the key human resource staff working to promote a culture supportive of the business strategy is the human resource director, although there are other staff groups that address particular aspects of the issue for example quality and management development. The human resources managers serves as internal consultants to the various operations within Wal-Mart.

The people perform the following functions: 1) raise awareness on issues of productivity, quality, and a quality work life; 2) facilitate information transfer among Wal-Mart’s operations; 3) conduct practical research related to productivity, a quality of work life, and team issues; and develop team and human resource management processes useful to line managers.

Other staff groups, which contribute to the effort, include quality centre, which promotes improved productivity through the organized teams. The corporate human resource staff has grown in recent years and its range of operations has broadened. The challenge is to tie together a large array of activities into a coherent well-aimed strategy (Anon, 2009, unpaged).

If we are speaking about the relation between SHRM and the strategic objectives of this enterprise, we may say it is aimed at recruitment and retention of the best candidates, which will subsequently enable the company to reduce operational costs, that inevitably arise when the company has a high turnover (Peterson, 2005).

The human resource practices in the organization, for example, development and training, selection and recruitment, performance appraisal, performance contracts among others improve HR efficiency. These traditions are not only used by Human Resource Managers but also used by line managers.

The use of HR practices by line managers has been increasing over years due to the complexity involved in HRM. They play a very crucial role in the development of the workforce since they contact directly with employees (Daft, 2009). Their work is to serve as a bridge between the HR managers and the work force. They are better placed to understand the employee’s performance and frequently experienced problems such as turnover rates and absenteeism which can be used by the HR managers.

At Wal-Mart it is the duty of line managers to introduce any new member of staff into the corporate organization. Shortly after the line managers are informed about the arrival of a new member of staff, they should ensure that the work place is suitable, fully effective and well equipped, notify team members about the new employee, assign one member to act as the employee’s adviser and inform him of the new employee’s duties.

On the whole, it is possible to single out the following areas of HRM to which Wal-Mart pays close attention:

• Recruitment of the personnel . Prior to hiring the person, the HR managers of Wal-Mart scrutinize the background of the candidate. They focus on his/her education, references, previous work experience, especially, if we are speaking about those applicants, who have already been selected among many others. The HR managers may focus on such issues as the reason why the person left the previous job. They do not rely solely on interview, since they believe that this form of selection process can be invalid (Peterson, 2005, p 87).
• Retention of the Employees. In order to retain new hires, the company usually undertakes the following steps: 1) it offers regular orientation programs to the new members of the personnel; 2) the HR managers clearly explain the employee’s opportunities for career growth. It should be noted that approximately 70 percent of the managerial staff in Wal-Mart were hourly workers at the beginning of their career in Wal-Mart (Peterson, 2005, p 88).In the previous section of this paper, we have noted that complex hierarchical structure of this company and it role culture enable the hourly workers to climb the career ladder.
• Training and development of the employees. Unfortunately, training and development of the personnel is one of those areas where Wal-Mart is not very successful. The company focuses on the so-called “orientation training” given to the employees at the initial stages of their career. However, scholars believe that such courses should be offered on a regular basis (Ollek, 2009).
• Remuneration. Wal-Mart workers have a fixed hourly wages, for example, 10 or 12 dollar per hour. In the majority of cases, such approach to the assessment and remuneration of performance overlooks the individual contribution of the front-line personnel.

This discussion shows that certain areas of SHRM in Wall-Mart do not fully contribute to the achievement of strategic objectives, set by this corporation. Namely we may mention the training, offered to the employees. It cannot be limited only to the orientation programs. In the next section of the paper we will try to single out ways of improving HRM in the company.

• One of the first measures that we can suggest to this company is to simplify its managerial hierarchy, and now it is very complex and there are too many barriers between the front-line personnel and the top-management. There are several rationales for this change: first, the duties of middle managers frequently overlap and essentially these people do the same work. Secondly, the complex hierarchy may lead to excessive supervision of the employees, malpractices, and abuse of power. For instance, one may mention those scandals which broke out to the facts that many employees, who supported unionization of labour force were dismissed (Spotts, 2005). Overall, such incident pose a great threat to the public image of the company and they may prevent it from remaining the world leading retailer.
• Secondly, it is vital that the company introduced different methods of performance assessment. As it has been mentioned before, the majority of employees have fixed salaries. This is the most inadequate way of performance remuneration. The management of this organization should focus on both quantitative and qualitative aspects of performance, and there are ways in which they can be measured. Overall, such compensational policies can be the leading factor that forces the employees leave Wal-Mart because they feel they are not valued by the company.
• Thirdly, Wal-Mart should pay more attention to the regular training of the personnel. Every representative of the service sector makes sure that their employees are able to use new technologies, especially solutions. Additionally, it is vital that they can find an approach to each of the customers and assist him in every possible way. These are one of those skills that should be continuously elaborated.

In this ways, SHRM will help Wal-Mart achieve three objectives:

• customer satisfaction;
• employee satisfaction;
• increased competitiveness.

Anon. (2009). Strategic Management: A Case Study of Wal-Mart Inc . Web.

Bianco, A., & Zellner, W. (2003). Is Wal-Mart Too Powerful? Business Week , (3852), p100.

Carolyn, B. (2010). Organizational Theory . Web.

Cravens D. Greenley G, Piercy P, & Stanley F Slater. (1998). Mapping the path to market leadership: Effectively combining various dimensions of strategy into an integrated process of strategic analysis and action maps the path to market leadeship. Marketing Management, 7(3), 28-39.

Daft, R.L. (2009). Organization Theory and Design . London: Cengage Learning.

Harvard Business School Press, (2006). Essentials of Strategy Harvard Business Literacy for HR Professionals’ Series . Boston: Harvard Business Press.

Holland, P., & De Cieri, H. (2006). Contemporary Issues in Human Resource Development . Sydney: Pearson Education.

Peterson. C. (2005) Employee Retention: The Secrets Behind Wal-Mart’s Successful Hiring Policies. Human Resource Management. (44), 1 pp 85-88.

Smith, A. S., & Mazin, A. R. (2004). The HR Answer Book: An Indispensable Guide for Managers and Human Resources Professionals . New York: Amacom Div American Mgmt Assn.

Storey, J. (1998). New Perspectives on Human Resource Management . London: Cengage Learning EMEA.

Spotts G. (2005). Wal-Mart: the high cost of low price. The Disinformation Company.

Zellner, W., et al (2001). How well does Wal-Mart Travel? Business Week, (3747), p82.

Wal-Mart (2010). The Official Website.

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1. IvyPanda . "Strategic Human Resource Management at Wal-Mart Stores." February 29, 2024. https://ivypanda.com/essays/strategic-human-resource-management-at-wal-mart-stores/.

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Walmart’s Operations Management: 10 Strategic Decisions & Productivity

Walmart Inc.’s operations management involves a variety of approaches that are focused on managing the supply chain and inventory, as well as sales performance. The company’s success is significantly based on effective performance in retail operations management. Specifically, Walmart’s management covers all the 10 decision areas of operations management. These strategic decision areas pertain to the issues managers deal with on a daily basis as they optimize the e-commerce company’s operations. Walmart’s application of the 10 decisions of operations management reflects managers’ prioritization of business objectives. In turn, this prioritization shows the strategic significance of the different decision areas of operations management in the retail company’s business. This approach to operations aligns with Walmart’s corporate mission statement and corporate vision statement . The retail enterprise is a business case of how to achieve high efficiency in operations to ensure long-term growth and success in the global market.

The 10 decisions of operations management are effectively addressed in Walmart’s business through a combination of approaches that emphasize supply chain management, inventory management, and sales and marketing. This approach leads to strategies that strengthen the business against competitors, like Amazon and its subsidiary, Whole Foods , as well as Home Depot , eBay, Costco , Best Buy, Macy’s, Kroger, Alibaba, IKEA, Target, and Lowe’s.

The 10 Strategic Decision Areas of Operations Management at Walmart

1. Design of Goods and Services . This decision area of operations management involves the strategic characterization of the retail company’s products. In this case, the decision area covers Walmart’s goods and services. As a retailer, the company offers retail services. However, Walmart also has its own brands of goods, such as Great Value and Sam’s Choice. The company’s operations management addresses the design of retail service by emphasizing the variables of efficiency and cost-effectiveness. Walmart’s generic strategy for competitive advantage, and intensive growth strategies emphasize low costs and low selling prices. To fulfill these strategies, the firm focuses on maximum efficiency of its retail service operations. To address the design of goods in this decision area of operations management, Walmart emphasizes minimal production costs, especially for the Great Value brand. The firm’s consumer goods are designed in a way that they are easy to mass-produce. The strategic approach in this operations management area affects Walmart’s marketing mix or 4Ps and the corporation’s strategic planning for product development and retail service expansion.

2. Quality Management . Walmart approaches this decision area of operations management through three tiers of quality standards. The lowest tier specifies the minimum quality expectations of the majority of buyers. Walmart keeps this tier for most of its brands, such as Great Value. The middle tier specifies market average quality for low-cost retailers. This tier is used for some products, as well as for the job performance targets of Walmart employees, especially sales personnel. The highest tier specifies quality levels that exceed market averages in the retail industry. This tier is applied to only a minority of Walmart’s outputs, such as goods under the Sam’s Choice brand. This three-tier approach satisfies quality management objectives in the strategic decision areas of operations management throughout the retail business organization. Appropriate quality measures also contribute to the strengths identified in the SWOT analysis of Walmart Inc .

3. Process and Capacity Design . In this strategic decision area, Walmart’s operations management utilizes behavioral analysis, forecasting, and continuous monitoring. Behavioral analysis of customers and employees, such as in the brick-and-mortar stores and e-commerce operations, serves as basis for the company’s process and capacity design for optimizing space, personnel, and equipment. Forecasting is the basis for Walmart’s ever-changing capacity design for human resources. The company’s HR process and capacity design evolves as the retail business grows. Also, to satisfy concerns in this decision area of operations management, Walmart uses continuous monitoring of store capacities to inform corporate managers in keeping or changing current capacity designs.

4. Location Strategy . This decision area of operations management emphasizes efficiency of movement of materials, human resources, and business information throughout the retail organization. In this regard, Walmart’s location strategy includes stores located in or near urban centers and consumer population clusters. The company aims to maximize market reach and accessibility for consumers. Materials and goods are made available to Walmart’s employees and target customers through strategic warehouse locations. On the other hand, to address the business information aspect of this decision area of operations management, Walmart uses Internet technology and related computing systems and networks. The company has a comprehensive set of online information systems for real-time reports and monitoring that support managing individual retail stores as well as regional market operations.

5. Layout Design and Strategy . Walmart addresses this decision area of operations management by assessing shoppers’ and employees’ behaviors for the layout design of its brick-and-mortar stores, e-commerce websites, and warehouses or storage facilities. The layout design of the stores is based on consumer behavioral analysis and corporate standards. For example, Walmart’s placement of some goods in certain areas of its stores, such as near the entrance/exit, maximizes purchase likelihood. On the other hand, the layout design and strategy for the company’s warehouses are based on the need to rapidly move goods across the supply chain to the stores. Walmart’s warehouses maximize utilization and efficiency of space for the company’s trucks, suppliers’ trucks, and goods. With efficiency, cost-effectiveness, and cost-minimization, the retail company satisfies the needs in this strategic decision area of operations management.

6. Human Resources and Job Design . Walmart’s human resource management strategies involve continuous recruitment. The retail business suffers from relatively high turnover partly because of low wages, which relate to the cost-leadership generic strategy. Nonetheless, continuous recruitment addresses this strategic decision area of operations management, while maintaining Walmart’s organizational structure and corporate culture . Also, the company maintains standardized job processes, especially for positions in its stores. Walmart’s training programs support the need for standardization for the service quality standards of the business. Thus, the company satisfies concerns in this decision area of operations management despite high turnover.

7. Supply Chain Management . Walmart’s bargaining power over suppliers successfully addresses this decision area of operations management. The retailer’s supply chain is comprehensively integrated with advanced information technology, which enhances such bargaining power. For example, supply chain management information systems are directly linked to Walmart’s ability to minimize costs of operations. These systems enable managers and vendors to collaborate in deciding when to move certain amounts of merchandise across the supply chain. This condition utilizes business competitiveness with regard to competitive advantage, as shown in the Porter’s Five Forces analysis of Walmart Inc . As one of the biggest retailers in the world, the company wields its strong bargaining power to impose its demands on suppliers, as a way to address supply chain management issues in this strategic decision area of operations management. Nonetheless, considering Walmart’s stakeholders and corporate social responsibility strategy , the company balances business needs and the needs of suppliers, who are a major stakeholder group.

8. Inventory Management . In this decision area of operations management, Walmart focuses on the vendor-managed inventory model and just-in-time cross-docking. In the vendor-managed inventory model, suppliers access the company’s information systems to decide when to deliver goods based on real-time data on inventory levels. In this way, Walmart minimizes the problem of stockouts. On the other hand, in just-in-time cross-docking, the retail company minimizes the size of its inventory, thereby supporting cost-minimization efforts. These approaches help maximize the operational efficiency and performance of the retail business in this strategic decision area of operations management (See more: Walmart: Inventory Management ).

9. Scheduling . Walmart uses conventional shifts and flexible scheduling. In this decision area of operations management, the emphasis is on optimizing internal business process schedules to achieve higher efficiencies in the retail enterprise. Through optimized schedules, Walmart minimizes losses linked to overcapacity and related issues. Scheduling in the retailer’s warehouses is flexible and based on current trends. For example, based on Walmart’s approaches to inventory management and supply chain management, suppliers readily respond to changes in inventory levels. As a result, most of the company’s warehouse schedules are not fixed. On the other hand, Walmart store processes and human resources in sales and marketing use fixed conventional shifts for scheduling. Such fixed scheduling optimizes the retailer’s expenditure on human resources. However, to fully address scheduling as a strategic decision area of operations management, Walmart occasionally changes store and personnel schedules to address anticipated changes in demand, such as during Black Friday. This flexibility supports optimal retail revenues, especially during special shopping occasions.

10. Maintenance . With regard to maintenance needs, Walmart addresses this decision area of operations management through training programs to maintain human resources, dedicated personnel to maintain facilities, and dedicated personnel to maintain equipment. The retail company’s human resource management involves training programs to ensure that employees are effective and efficient. On the other hand, dedicated personnel for facility maintenance keep all of Walmart’s buildings in shape and up to corporate and regulatory standards. In relation, the company has dedicated personnel as well as third-party service providers for fixing and repairing equipment like cash registers and computers. Walmart also has personnel for maintaining its e-commerce websites and social media accounts. This combination of maintenance approaches contributes to the retail company’s effectiveness in satisfying the concerns in this strategic decision area of operations management. Effective and efficient maintenance supports business resilience against threats in the industry environment, such as the ones evaluated in the PESTEL/PESTLE Analysis of Walmart Inc .

Determining Productivity at Walmart Inc.

One of the goals of Walmart’s operations management is to maximize productivity to support the minimization of costs under the cost leadership generic strategy. There are various quantitative and qualitative criteria or measures of productivity that pertain to human resources and related internal business processes in the retail organization. Some of the most notable of these productivity measures/criteria at Walmart are:

• Revenues per sales unit
• Stockout rate
• Duration of order filling

The revenues per sales unit refers to the sales revenues per store, average sales revenues per store, and sales revenues per sales team. Walmart’s operations managers are interested in maximizing revenues per sales unit. On the other hand, the stockout rate is the frequency of stockout, which is the condition where inventories for certain products are empty or inadequate despite positive demand. Walmart’s operations management objective is to minimize stockout rates. Also, the duration of order filling is the amount of time consumed to fill inventory requests at the company’s stores. The operations management objective in this regard is to minimize the duration of order filling, as a way to enhance Walmart’s business performance.

• Reid, R. D., & Sanders, N. R. (2023). Operations Management: An Integrated Approach . John Wiley & Sons.
• Szwarc, E., Bocewicz, G., Golińska-Dawson, P., & Banaszak, Z. (2023). Proactive operations management: Staff allocation with competence maintenance constraints. Sustainability, 15 (3), 1949.
• Walmart Inc. – Form 10-K .
• Walmart Inc. – History .
• Walmart Inc. – Location Facts .
• Walmart’s E-commerce Website .
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