Wal-Mart: A brief Overview
Organizational Behavior Issues in Wal-Mart
Low Wage and Employee Dissatisfaction
Authoritarian Culture of Wal-Mart
Discrimination Issue at Wal-Mart
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Organizational behavior aids in studying the human behavior in context of the organizational settings. It revolves around the study of individuals, teams as well as the whole organization in order to analyze the behavior. The study of organizational behavior supports various organizational activities in order to achieve the organizational goal. The theories of organizational behavior help in exploring various pathways for meeting the objectives (Robbins, Campbell and Judge, 2010). Organizational decision making process plays a crucial role in ensuring success of the company. Maintaining positive culture within the organization contributes in motivating the workforce. It has been found that the motivated workforce assist in improving the organizational performance (Rousseau and Cooper, 2000). The attitude of the employees must be understood in order to capitalize the skills in enhancing the overall performance. Leadership is a major issue that determines how the management will work with the employees for achieving the organizational objectives. Ineffective leadership, mistreatment with the employees may lead to lack of motivation which will affect the work culture as well as performance. Additionally, malcontent employees will develop a negative culture which is not desired by the organization. Presently, various organizations are encountering issues regarding organizational culture, leadership, employee motivation and relations (French and Schermerhorn, 2008). This paper focuses on discussing the organizational behavior issues faced by the organizations in the dynamic business environment. An organization has been chosen for discussing the issues specifically and at the end of this paper recommendations have been included in order to resolve the issue.
Major objective of this paper is to critically analyze the organizational behavior issues in order to identify the contemporary business problems. Wal-Mart Stores Inc. has been chosen for discussing the major organizational behavior issues which has significant importance on the business activities of the company. This section will focus on providing a brief overview of the organization. Wal-Mart is an USA based multinational retail chain which operates through huge discount departmental stores. The organization was established by Sam Walton in the year of 1962. Headquarter of Wal-Mart is located at Bentonville, Arkansas. For more than 50 years, the company has been operating in 27 countries with more than 11,000 outlets. Presently, Wal-Mart is the largerst company across the globe in terms of revenue. Additionally, it is the largest private employer of the globe as per the list published by Fortune. It is a family owned business and since 1972 it is listed on the New York Stock Exchange. The slogan of the company is “Save more. Live better”. The low price strategy has helped the organization in capturing large market. The culture of the organization believes that the retailer can help people by saving money which will improve theory quality of life. The major four values of the company includes service to its customers, respect for every individual, achieving excellence and action which aims to maintain integrity. Wal-Mart is focusing on enhancing its business value through exploring growth opportunities and integrating its core values and purpose to every aspect of the business (Corporate.walmart.com, 2014).
Presently, the dynamic business environment has presented various challenges for the organizations. The needs and motivating factors are changing due to the shift in socio-economic structure and multicultural approach. Managing the employees in order to enhance the organizational performance has been a major challenge for the multinational companies. Wal-Mart has been encountering some issues regarding organizational behavior. Mistreatment with the employees have been reported which is the result of poor organizational culture (Pendola, 2014). The role of leaders has been questioned in case of Wal-Mart. It has been found that the employee is not motivated due to various reasons. This section will focus on highlighting the major issues relating to the organizational behavior at Wal-Mart.
Wal-Mart believes in the slogan, “Save More. Live Better”. It has been found that the company has been applying this approach in case of its employees (Harress, 2013). It has a large employee base of 2.2 million across 9,000 stores. It h has been reported that the wage rate at Wal-Mart is significantly low in comparison to its business rivals. The management of Wal-Mart has been controlling the cost cutting activities in an aggressive manner. It has been reducing the employee benefits along with the wages. Every business organization adopts a strategy for maximizing the profit. Cost cutting through managing labour cost is a popular way. However Wal-Mart has not adopted as well as implemented it effectively. The average salary of the lowest paid workers at Wal-Mart is $18,720 if the employee works for 40 hours per week and 52 weeks in a year. But, the average salary is reported to be $9 per hour and it has been fund that the workers work around 34 hours per week. Hence, the averaged annual salary is estimated to be $15,500 (Harress, 2013). It results in dissatisfaction of the employees. The employees in Washington D.C. and various cities across America, are organizing strikes. The labor unrest is majorly triggered by the low wage rate at Wal-Mart (Ungar, 2013).
The organization needs to motivate its employees in order to enhance the overall work performance. According to the Maslow’s Need Hierarchy, at first the physiological needs to be satisfied (Robbins, Campbell and Judge, 2010). Physiological needs trigger an individual to get engaged into a job to ensure regular earnings. The preliminary purpose of employment is to satisfy the basic needs of the individual. Lower wage at Wal-Mart is not adequate to meet the physiological needs of the workers. They need avail food stamp and subsidies for maintain their livelihood. Hence, the company is not able to fulfill the primary requirements of its employees (Pendola, 2014). Hence, the employees are not satisfied and it is reflected in their performance (Arvinen-Muondo and Perkins, 2013).
According to Herzberg’s Two Factor Motivation Theory, there are two factors associated with the motivation of the employees at workplace. It has been found that the hygiene factors includes policy and procedures or the company, working conditions, management and supervision, interpersonal relations, job security and salary (Robbins, Campbell and Judge, 2010). Absence of these hygiene factors leads to dissatisfaction of the employees. Consequently, it affects the performance of the employees. It has been found Wal-Mart has not been offering adequate salary which is one of the most important hygiene factors. According to the Herzberg’s two factor motivation theory, the employees will be dissatisfied (French and Schermerhorn, 2008). It has been observed that the employees are calling out for strikes in various stores of America which reflects the labour unrest. Additionally, it has been observed that at the Wal-Mart stores, products are stacked on the pallets in the warehouse of the organization instead of bringing it to the floor of the stores so that the customers can get their desired product. Due to low level of motivation, the employees of Wal-Mart have been found to be working efficiently (Arvinen-Muondo and Perkins, 2013). The check-out lines are found to be significantly long which is not desired by the customers. Thus, the overall shopping experience of the customers is declining which has a potential impact on the financial performance of the company (Arvinen-Muondo and Perkins, 2013). Costco is one of the biggest competitors of Wal-Mart and in the fourth quarter of 2012-2013, the company has reported 8% growth in revenue in year on year basis. On the other hand, the sales of Wal-Mart had increased by 1.2%. In the past 5 years, the company had recorded 13% growth in the number of stores. In 2013, the workforce in U.S. warehouse had dropped by 1.4% (Ungar, 2013). The remaining disorganized workforce is not motivated enough to help the customers during shopping. Thus, the poor organizational culture has dissatisfied the workforce which has significantly impact on the financial performance of the company.
Various types of leadership are practiced in different organizations and it develops a specific culture. Different type of organizational culture depending on the leadership styles includes authoritarian culture, participative culture, mechanistic culture and organic culture. It has been found that the Wal-Mart has developed an authoritarian culture (LICHTENSTEIN, 2014). In this type of culture, power is centralized and the leader is the ultimate person to make decision. This culture emphasizes on obedience and discipline. Authoritarian culture implies that the leader is the best person for understanding what is good for the organization and he will always cater the organizational interest (French and Schermerhorn, 2008). In case of Wal-Mart it has been observed that the authoritarian culture has pressurized the store level management to squeeze more from its workers, lower level managers and the stockers (Brantley, 2014).
The hyper centralized management at Wal-Mart had leaded to various problems. The workers could not share their views regarding working conditions and other problems. The communication system has been found to be one way which focused on instructing the sub-ordinates (Robbins, Campbell and Judge, 2010). Additionally, authoritarian culture of the organization leaves no scope for innovation which significantly inhibits the future growth. In the dynamic global business environment it is important for the organizations to facilitate innovation for ensuring sustainable growth. Wal-Mart is an anti-union organization which had punished the employees for violating the rules. The authoritarian structure of Wal-Mart had deployed communitarian ethos for sustaining higher degree of loyalty (Brantley, 2014). The decline in the sales level is an alarming factor for Wal-Mart which is the result of the present culture. The authoritarian culture significantly affects the motivation level of the employees which negatively impact the financial performance of the organization (Pendola, 2014).
Discrimination is a major issue which has been reported by the employees of Wal-Mart. The authoritarian culture and tendency of cutting cost through lower wage are the major organizational issues. The incidents of discrimination had added fuel to the employee dissatisfaction and affected the reputation of the organization (Pendola, 2014). Presently, 70% of the hourly employees of Wal-Mart are women. Sex-discrimination is a massive issue which has been reported by the workers as they were deprived of certain benefits and opportunities. The organizational culture of Wal-Mart promotes gender discrimination. According to the Herzberg’s Two Factor Motivation Theory motivation factor included job satisfaction, growth opportunities, achievement, responsibility and recognition (Kondalkar, 2007). Absence of these factors leads to dissatisfaction of the employees. In Wal-Mart, gender biasness had leaded to dissatisfaction of the employees. It was reported that a woman employee was paid less salary than the male employee who was trained by her (Cascio, 2006). The discrimination issue had significantly affected the motivation as the female employees were deprived of recognition (French and Schermerhorn, 2008). In case of promotion, the same trend was observed. According to Lichtenstein (2011), around 10,000 female employees at Wal-Mart deserved to be promoted as the salaried store manager. But, the management of Wal-Mart considers it as impossible and the glass ceiling had affected the employee morale. It assumes that the women with young kids and relative, who needs intensive care, will not be able to take the high level of responsibility (Cascio, 2006). This is referred as glass ceiling which prevents the management from analyzing the actual position.
The above section has discussed the major organizational behavior issues In Wal-Mart. The discussion implies that the organizational culture does not develop a positive working environment. The leadership style and organizational policies have failed to motivate its employees for enhanced performance. This section will provide few recommendations which will address the organizational behavior issues and inclusion of these recommendations will be effective in solving the current problems.
This paper has provided an insight to the contemporary organizational behavior issues encountered by large companies. In this paper, the problems of Wal-Mart have been discussed along with the relevant organizational behavior theories. It has been found that Wal-Mart has been encountering various issues due to labour unrest. The company has been offering lower wage which is inadequate for meeting the physiological needs of the workers. Consequently, the employees are not motivated to perform their job responsibilities efficiently. Additionally, it has been found that the authoritarian culture of the organization have inhibited innovation as the employees are not motivated to perform their tasks in the negative working environment. Gender discrimination is a common practice at Wal-Mart which has deprived several female employees from their deserving positions and benefits. In order to solve these issues, the management must focus on re-orientation of the management structure which will adopt a positive culture. The need of the employees must be catered. Additionally, reward and recognition program must be re-designed for encouraging the workers in improving their performance. Gender discrimination must be stopped at Wal-Mart for ensuring a positive organizational culture.
Arvinen-Muondo, R. and Perkins, S. (2013). Organizational behaviour. London: Kogan Page.
Brantley, M. (2014). Walmart's authoritarian style. [online] Arkansas Times.
Cascio, W. (2006). The High Cost of Low Wages. Harvard Business review, December.
Corporate.walmart.com, (2014). Culture.
French, R. and Schermerhorn, J. (2008). Organizational behaviour. Hoboken, NJ: John Wiley & Sons.
Harress, C. (2013). Wal-Mart Says 'Save Money Live Better,' But Workers Don't Make Living Wage And Rely On State Benefits.
Kondalkar, V. (2007). Organizational behaviour. New Delhi: New Age International (P) Ltd., Publishers.
LICHTENSTEIN, N. (2014). Wal-Mart’s Authoritarian Culture. [online] Nytimes.com.
Pendola, R. (2014). Mistreated Walmart Employees Speak Out Against Company (UPDATED).
Robbins, S., Campbell, T. and Judge, T. (2010). Organizational behaviour. Harlow [u.a.]: Financial Times/Prentice Hall.
Rousseau, D. and Cooper, C. (2000). Trends in organizational behavior. Chichester: Wiley.
Ungar, R. (2013). Walmart Pays Workers Poorly And Sinks While Costco Pays Workers Well And Sails-Proof That You Get What You Pay For.
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