PSBA Manila Human Behavior in an Organization

CASE 4:
WAL- MARTS WORLD

Presented by: Alianah A. Pacma

Overview
y

Wal-Mart is the worlds largest retailer which maintains its corporate culture across all of its 4,000 stores and with sales of $288 billion in fiscal year 2004. The legendary Saturday Morning Meeting is part of the answer how this giant promote and persevere its image as a smalltown store where the customer is king Sam Walton, founder of Wal-Mart started the Saturday Morning Meeting of Wal-Marts who thought it unfair that he could take off on the weekends while his employees worked. Meeting being held at the home office in Bentoville, Arkansas. During the meeting, He would analyze the previous weeks records to determine which merchandise is selling and how sales were faring He would hold a quick meeting with his associates (work associates and employees) to openly share the stores information with them. Other important purpose of the meeting is to convey to his employees that he valued their input and wanted them to learn the business. Some 600 managers attend each Saturday morning, pack the 400-seat auditorium, waiting for the arrival of their fearless leader, Sam Walton

y y y

y y

Though Saturday Morning Meeting topics typically include the companys financial performance, merchandising, and areas of improvement, the meeting is above all else, a means to keep the company and its employees as close knit as possible. This team spirit is essential to Wal-Marts strategy of quick market response According to former CEO David Glass, Saturday Morning meeting was always a decision-making meeting to take corrective action, and that the rule of thumb was that by noon they wanted all the corrections made in the store Friday merchandising meeting another meeting to maintain company culture of Wal-Mart where regional vice presidents as well as employees get together to discuss what products are saleable Since Wal-Mart is viewed as a large, impersonal organization, one employee thought of the idea of a greeter who puts on a friendly smile

Maintaining Wal-Marts has not always been easy y In the late 1980s and early 1990s , Attendance at the Saturday Morning meetings grew so large making it impossible for everyone to speak. y So the CEO during that time, David Glass, recalls complaints of boredom. So the suppliers, eager to impress themselves begun bringing in entertainers like singer Garth Brooks. y The meeting however has begun to lose focus. The CEO later invited guests like Bill Clinton and CEOs who had more educational value
y

Biggest problem of Wal-Mart: Public Scrutiny that comes with being the worlds largest company y In the past, the company had tolerance for employees mistakes, for example it would strongly reprimand an employee who made an offhand sexist remark, but if the employee changes his/her attitude, then the company will let him/her stay y Today, however, Wal-Mart adheres to a stricter policy as the current CEO Lee Scott explains that the company is less kind but not mean. Today, when you find somebody doing something wrong, you not only have to let them go, you have to document it so it is covered and people understand. That is a bit of culture change. y Wal-Mart is now a company that operates in a different context than when Sam Walton was alive and when David Glass ran the company.
y

CEO Scotts role, besides focusing on driving sales, has to be eliminating constant raging of negatives that cause people to wonder if Wal-Mart will be allowed to grow. y Such controversies against Wal-Mart which contribute to their negative publicity includes: * the company outsourcing the cleaning of its stores to illegal immigrants and let them work seven days a week instead of taking a rest * anti-union position * treatment of employees (including accusations of discrimination and underpayment of employees)
y
-

These and others make it increasingly difficult for Wal-Mart to maintain the image of a friendly, affordable retailer that Sam Walton had in mind when he founded the company

Over the last couple of years, CEO Scott have been spending much of the time talking about all the negative publicity theyve been getting, not from the standpoint that they hate the press, but by asking their people what they are doing that allows people to spread these kinds of negative discussions about Wal-Mart.

Questions for Discussions

According to the textbook, there are seven primary characteristics that capture the essence of an organizations culture. How would you describe Wal-Marts culture using these seven characteristics? The following characteristics were evident in Wal-Marts culture before they adhered to stricter policy: a. The Saturday Morning meeting introduced by the founder is an example of innovation and risk-taking. Its a unique way to have employees get involved with their work more and at the same time theres a risk every time they suggest ideas that needed to be acted upon as soon as possible. b. Attention to detail: The company is very attentive to small details like when an executive observed that a product of its competitor seems to have more value than theirs and so he acquired all those and have them displayed in Wal-Marts stores the soonest possible. 1.

c. Outcome orientation: Wal-Marts being result-oriented, during the Saturday/Friday meetings, associates are encouraged to contribute ideas that are urged to be corrected upon before the end of the day d. People orientation emphasizes on the degree to which management take into consideration the effect of outcome of people within their organization which was evident in WalMart employees involvement in the business including learning the business e. Aggressiveness: Some Waltons great trust in his staff to make decisions illustrates aggressiveness as well as assertiveness f. Stability: The culture at first was stable but maintaining one hasnt been that easy for Wal-Mart

2.

Based on this case, would you characterize Wal-Marts culture as strong or weak? Why? How might Wal-Marts culture contribute to its long-term performance? Based on this case, I would characterize Wal-Marts culture as strong because of what were described in the case like how the managers could easily come up with decisions that are acted upon immediately, the employee-involvement in participative decisionmaking is high, and how Wal-Mart developed and sustains competitive advantage due to its speed in executing strategy and change that competitors could not do, which contribute to the balance of its culture. But on the contrary it still has weaknesses like its culture of retail fanaticism and continuous improvement of efficiency, making its culture be described as neurotic or overanxious.

The sustainment of competitive advantage over competitors is what Wal-Marts culture contributes to the companys long-term performance.

3.

As an upper manager of Wal-Mart, what steps could you take to either maintain or enhance the culture of Wal-Mart? As an upper manager, I could take the following steps to maintain the culture of Wal-Mart: Renew vision. Ill get my team to discuss the current culture. Define the parts of the culture that are already great and need to be supported. Get strategic. My team will recognize that this is important Ill pick people who already developed a deeper understanding as I created a vision of a desired future culture which is a culture enriched with love for employees and customers as well Get people excited. Chances are my culture team will be excited. If not, Ill get them excited and Help the team recognize that not everyone else in the organization is going to think that these efforts are worthwhile immediately. Remember that enthusiasm is contagious.

a.

b.

c.

4. What are some aspects of Wal-Marts culture that have persevered, but yet may be disadvantageous in todays economy?

One main aspect of Wal-Marts culture that has persevered, but yet may be disadvantageous in todays economy is its cultures frugality, a characteristic of Sam Walton that has endured even through Wal-Marts tremendous growth and financial success. He was strictly-focused on keeping costs low so as to gain competitive advantage over competitors such as Sears and Kmart.  He was also known for making 8 executives sleep in one room on company trips. These characteristics have persevered in Wal-Marts culture that even the current CEO, Lee Scott, drives a Volkswagen Beetle and has also shared hotel rooms to reduce costs.


5.

How might Wal-Marts negative press affect employee morale, job satisfaction, and organizational commitment? As a manager, what steps would you take to improve employee attitudes? Employee attitudes include employee morale, job satisfaction, and organizational commitment.When employees feel they are not accepted by the leaders, especially, the basic rights such as freedom, getting enough pay, equality, then these result to lower employee morale to do their job. These employee attitudes are greatly affected by the negative press because their morale is being pressed down deeply, they become more dissatisfied, that their commitment to the company would decrease tremendously. One major step I could take to improve employee attitudes is to propose to the CEO the crucial need of the company to bring back the Walton roots wherein employees are given positive treatment which result to their favorable action and work performance. Then there will be no more negatives the press will
spread about Wal-Mart

6. Characterize Wal-Marts organizational structure. It is mechanistic or organic? Does it have a high degree of centralization or decentralization? How might Wal-Marts structure affect its employees in terms of their productivity and job attitudes?  Wal-Mart had an organic structure and high degree of decentralization before there was a bit of a change in the culture. It now has a high degree of centralization where decisions are centralized to CEO and other high executives. Its structure had become mechanistic too.  It greatly affect employees productivity because how they can contribute to the success of the organization is driven by the structure. Since they must adhere to policies imposed by the kind of structure it has, their involvement in the organization is limited, thus it affects their attitudes and productivity in the workplace.