Wal-Mart Stores Inc. is one of the American largest multinational corporations. It is also the world’s biggest private employer, as the number of its employees is nearly two million people. The success of Wal-Mart heavily relies on the strategy employed by its legendary founder Sam Walton. However, as the times are changing, the corporation has to adjust its traditional strategy to new conditions. The analysis of the specifics of Wal-mart’s management style helps to reveal the key to its success and determine the challenges faced by the corporation nowadays.
Wal-Mart’s management style is based on the beliefs of its founder Sam Walton. Walton believed that corporate executives should effectively interact with store operations. Therefore, Walton organized the structure of the company in such way that the headquarters and operational units had a continuous efficient communication benefiting the executives’ ability to respond to all changes in the market and customers’ needs quickly.
The company’s management system was famous for its traditional Saturday’s meetings gathering all Vice Presidents responsible for different districts and taking place at the company’s headquarters in Bentonville. Such promoted corporate spirit and helped the company to remain on the top of the retailing business. However, in 2008 the meetings started to take place once a month due to the inability of the company to stick to the personalized approach to management no longer.
Besides being a leader in retailing management, the company is famous for its quick expansion to many countries. The company operates in different parts of the world under different names and gain huge revenues from international retailing. However it faces certain challenges, as its inability to adjust to unique business environments led to its fall in several countries.
Though Wal-Mart’s management and expansion strategy brought huge revenues and immense success to the company, the growth of the company forces it to modify its strategy while trying to preserve its best practices and traditions contributing to the success of the corporation.
Wal-Mart should stick to its successful strategy of presenting a variety of products that is much wider that the one of its competitors to embrace differentiation. In such way, the company can maintain low prices and provide its customers with the advantageous opportunity to choose between numerous variants of products.
Wal-Mart’s wide geographical spread distances itself from its small towns roots that nourished its values, as the company has to adjust to new conditions promoted by the fact that it is not a regional retailer, but a large international corporation. The expansion of the company is the main cause of the shift from traditional management strategy to more flexible methods of operating the corporation. The company cannot retain the same close linkage between all of its operating units and Bentonville headquarters. This fact is illustrated by the elimination of Saturday’s meetings. Such changes seem to be natural, as the growth of any company leads to inevitable modifications in its strategy.
Entry-level employees can receive huge revenue through stock purchase program like those employees who started working there many years before, as the amount of revenue depends on the amount of the purchased stock and the effective work of the employee, not on the number of years the person works for the company.
The top managers of Wal-Mart are not focused on union groups, as they believe that unionization can cause serious obstacles on the way to establishing effective communication between the employees and the managers.
Online retailing has caused some problems for Wal-Mart, as customers tend to buy certain categories of products on the Web due to the convenience of online shopping. However, customers continue to prefer buying most of the products, including grocery, in real-time hypermarkets.