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Organisational Structure: Walmart Development And Change

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Question:

Describe about the Organisational Structure for Walmart Development and Change.

 

Answer:

Analysis

There are various types of organization structure that are in use. Some of the organization follows a flat organizational structure while some other uses a horizontal organizational structure (Hicks & Spector, 2012). Some organization also uses matrix organizational structure. The objective of this paper is to discuss the organizational structure of Walmart. The company, Walmart, has established its organizational structure as a matrix organization. The organizational chart of Samsung can be shown as:

Managers Storing

This type of matrix structure provides strength to the organization. Walmart is an international company with its present in almost every part of the world. The matrix organizational structure enables Walmart to overcome the internal barriers and maintain a balance between the effectiveness and efficiency (Kauper, 2012). One advantage of a matrix structure for Walmart is that it facilitates the use of highly specialized staff and equipment. Rather than duplicating functions as would be done in a simple product department structure, resources are shared as needed. 

Walmart has adopted a departmentalization strategy in which the organization is divided into number of departments. The five key departments at Walmart are Operations (that includes Supply Chain Management), Marketing and Sales, Accounting and Finance, Human Resource Management, and Manufacturing. There are heads for each of the department and all these heads report to the CEO, Dough McMillon. It can be said that this departmentalization structure has enabled the company to effectively divide the jobs within the company. This departmentalization structure has helped Walmart to emerge as a lean organization (Donegan & Wei, 2011). Walmart has more than 2 million employees in the world and it is not easy for Walmart to remain agile and lean. The use of departmentalization has helped Walmart to provide the autonomy in the hands of different department heads. Lean is actually a mindset and it can be implemented anywhere and everywhere both in the personnel as well as professional life. Finance, operations, Marketing, project managers all should know about lean principles due to the wide application of Lean principles (Philippo, 2012).

This departmentalization structure has created a balance between the authority and freedom. The management of Walmart has always believed that the different departments in the organization should be provided freedom and independence so that different department can work effectively. It is observed that change management is always difficult to handle. With the authority levels with the various departments of Walmart, the company is able to better manage the change within the organization. Bartunek & Woodman (2013) argued that change could be implemented successfully if the leaders and the managers have got the support of mid-level management and low-level employees. The various department heads in the organization has high level of authority. The organization has a clear goal and objective to reach its market presence so that it can stay at the market leader position in the most of the global markets. The study of the current organizational structure of Walmart suggests, that the organizational structure of the company provides a platform where it can achieve its goals and objective. The management of the company realizes that it cannot have a flat organizational structure in place with 2 million employees (Mun & Yazdanifard, 2012). Therefore, Walmart has established a hierarchical structure. However, the use of matrix structure has improved the communication and interaction level across various departments.

 


Walmart’s Job Design comes under the Human Resource Management department. Walmart’s human resource management is a critical success factor for the business. The company’s human resource management aims to maximize employee performance to correspondingly maximize capacity for sales. Human resource planning and job analysis and design are some of the major components of Walmart’s human resource management strategy. Through human resource planning, the firm develops an adequate workforce. The job design at Walmart is implemented through the organizational structure. The organizational structure of Walmart has a clear line of authority, line of command and line of communication (Meeks & Chen, 2011). The organizational structure enables the head of different departments to create the roles and responsibilities for different employees. The job requirements are mapped to the various roles and responsibilities within the department. The country heads of different regions can made the changes to the job design or various roles based on the local culture and job environment in different regions.

It appears that the current organization structure is effective as it provides complete freedom to various departments. At the same time, the top management ensures that all the department heads reports to the CEO. This way all the departments work together to achieve the organizational goals and objectives. If something has to be changed in the current organizational structure of Walmart that it should be the structure of company and regional heads. It is recommended that the CEO should increase its control areas (Pope & Pope, 2015). The good way forward for Walmart would be to make a change in the organizational structure to ensure that all the nation heads report to the CEO. It would means added responsibility for the CEO. However, the CEO should be willing to take this added responsibility. Another thing that could be changed in the current organizational structure is the job design part of various roles and responsibilities. In the current organizational structure, marketing executives across different regions have a common job description (Saxena & Sharma, 2011). With the changing market conditions, the marketing role in China may not be the same as the marketing role in the Australia. Therefore, it is recommended that Walmart should add more flexibility in the job description part. 

 

References

Bartunek, J. M., & Woodman, R. W. (2015). Beyond Lewin: toward a temporal approximation of organization development and change.

Chuang, M. L., Donegan, J. J., Ganon, M. W., & Wei, K. (2011). Walmart and Carrefour experiences in China: resolving the structural paradox. Cross Cultural Management: An International Journal, 18(4), 443-463.

Hicks, M. J., Keil, S. R., & Spector, L. C. (2012). Mom-and-Pops or Big Box Stores: Some Evidence of WalMart Impact on Retail Trade. Economic Development Quarterly, 0891242412463817.

Kauper, D. (2012). Teaching profit seeking as the source of growth.International Review of Economics Education, 11(2), 64-80.

Meeks, M., & Chen, R. J. (2011). Can Walmart integrate values with value?: from sustainability to sustainable business. Journal of Sustainable Development, 4(5), p62.

Mun, L. Y., & Yazdanifard, R. (2012). WALMART SUCCESS IN MEXICO, CANADA AND CHINA: GLOBAL EXPANSION, STRATEGIES, ENTRY MODES, THREATS AND OPPORTUNITIES.

Philippon, T. (2012). Finance vs. Walmart: Why are Financial services so Expensive?. Rethinking Finance,” A. Blinder, A. Lo and R. Solow (eds).

Pope, D. G., & Pope, J. C. (2015). When Walmart comes to town: Always low housing prices? Always?. Journal of Urban Economics, 87, 1-13.

Saxena, R. P., & Sharma, A. (2011). Everyday low price–a blessing in disguise for Walmart during recession. International Journal of Business and Globalisation, 7(4), 409-433.

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