The firm organization and management. Business & Marketing Essay

The Firm Organization and Management
Name
Institution
The Firm Organization and Management
Introduction
A society constitutes many organizations whose participation in the value chain contributes towards the realization of certain objectives. These include those that offer services like schools, churches, universities and hospitals, and others that produce goods like factories, craft enterprises, agricultural and industrial enterprises among many others. To achieve their goals, there must be a systematic and consistent performance of activities through an organized management structure which facilitates the realization of the objectives.
Organization and Management
Management is defined differently in different situations. For instance while economists view it as a factor of production, sociologists view it in terms of manpower and managers perceive it as a process. Formal organizations hire managers to get things done. The managers act as enablers of success through other people. Therefore management becomes a continuous process of planning, organizing and controlling an organization’s personnel and resources to achieve a stated goal (Mullins, 2007). Different levels of management have to execute specific functions towards a central objective. The organization’s resources both physical and human must be used effectively in the realization of the desired outcomes through use of inputs such as machinery, raw materials, financial capital and human capital to produce outputs. This paper interrogates the organization and management practices of Wal-Mart, the biggest retail store in the US and which has previously topped in Fortune magazine’s Fortune 500 index.
Wal-Mart Stores Incorporated
The retailer was started in the 1940s by Sam Walton with a single discount store with an idea of selling more for less and within a period of over half a century has grown into the largest global retail outlet running more than 11,000 retail outlets across 27 countries and over 2 million employees. The fiscal year 2019 reports a staggering $ 514.4 billion in revenues. Its shareholders receive attractive dividends in form of shares. The company which has topped the global Fortune 500 six times employs a four pronged corporate strategy in its business (Fergusson, 2017). These approaches include dominating the retail market, rapid and constant expansion of its global markets, creation of a positive brand for company recognition and diversification into new spheres of retail.
On the public relations domain, the company has endeavored to expand into foreign markets and gaining political goodwill through its Political Action Committee, whose activities the company facilitates to a tune of hundreds of million dollars annually. Its public affairs strategy combines well with its company strategy and in regard to its expansion into new spheres the company has taken into consideration the hue and cry regarding its encroachment into retail sectors which other observers feel it should not. This and other efforts which inform the public relations strategy will ensure it continues to enjoy the goodwill of its reputation and become synonymous with affordable and quality products.
The retailer deals with sale of merchandise including apparel, health and beauty products, household products, electronics, fabrics, jewelry, pharma products, tire and lube products alongside an assortment of other products. The retail giant has defined its foundations on three principles which include respect for the individual, customer service and excellence (Fergusson, 2017). Its corporate management strategy promotes low prices for high quality brands and so as to achieve this, the retail company incorporates technology, warehousing and direct negotiation with manufacturers to eliminate middlemen.
The financial benefits that both its consumers and employees, who are fondly referred to associates has a direct bearing on their perspectives on the company as the customers get great bargains on products owing to subsidized prices; the employees earn an attractive wage. The associates constitute a workforce that is paid hourly, the retail managers and top tier managers such as district managers and the regional leadership. Each store has a management portfolio composed of a store manager, co-managers, assistant managers as well as management trainees.
Corporate Management
The retail giant’s management structure is formally bureaucratic, with three functional divisions categorized into logistics, real estate and retail operations under a combined team which also operates in different geographical zones. This categorization is a shift from a functionally departmentalized to a geographically departmentalized organization with a clear decentralized chain of command. At each management level, the span of control is constricted because of collaboration form managed teams who determine the pricing of merchandise, and logistics.
The leadership of the company is composed of an executive management team led by Doug Mc Millon who doubles as the President and CEO assisted by a board chaired by Greg Penner. The company’s management method is both transformational and transactional, where ethics, strategy, vision and distribution are incorporated (Tricker, 2015). Both the company’s mission statement and slogan are synonymous, aimed at making the customer benefit through reduced prices hence making them save money. Customer service is important in keeping a friendly work environment, improving performance and achievement of the company’s objectives. Its values; respect, integrity, excellence and action ensure customers get excellent service. The culture of integrity is reinforced by a code of global ethics, which are a yardstick for their associates’ ethical behavior globally.
The company’s board of directors uses a set of laid down guidelines as a framework for corporate governance and conduct of business within the organization. Among the guidelines are requirements for senior management qualifications and responsibilities (Tricker, 2015). The criteria used to select one to sit in the board include independence as a determined by the New York Stock Exchange. Nominees for directorship are expected to be independent, broadly experienced analytical minded and able to devote time to the board functions. Directors are voted into office as shareholders and are entitled to a compensation plan and to join the board is through the board’s invitation. It is the directors’ responsibility to act on behalf of the company and its shareholders.
Board committees include audit, compensation, management, store option and a planning and finance committee. Each of these committees has their respective mandates through a charter which sets out the goals and responsibilities as well as the qualifications for members serving in them. Directors have free and complete access to officers and associates through the CEO or directly. The inclusion of the CEO and other executive officers on the board facilitates information and insight about the company (Tricker, 2015).
The company’s philosophy on management emphasizes on the commitment to business to control expenses, while celebrating success as well as effectively communicate with partners. Motivation, listening, appreciation, exceeding customer expectations and progression are the other aspects of this philosophy.
The company’s revenue is segmented in three through the franchises of Wal-Mart Stores, which accounts for the company’s largest share of revenue at 65%, followed by Sam’s club, which contributes 25% of revenue and lastly the Wal-Mart International, a global market Franchise which contributes 10% of the total revenues of the company. Most of the merchandise is manufactured in China and then shipped to its global stores.
In its efforts to streamline operations and in the wake of global business dynamics, the management consolidated business departments from six to four in 2017 and acquired an online portal called jet.com with an aim to increase its online presence and gain a competitive advantage over its competition. The employees of Wal-Mart are diverse in culture, age, gender, and personalities and belief it or not, employees of Wal-Mart exceed most companies’ customer numbers. Both the employees, who they call associates and customers, are treated with respect and dignity. Each employee is unique and possesses special values, abilities, perceptions and experiences to an energized team.
Management Principles
Wal-Mart’s operations are backed up by sophisticated technology throughout the value chain making real-time turnaround. Managers and suppliers are able to keep track of goods and determine the stock levels and review products replenishment depending on how fast they move determined by factors like seasons or dates of the month for better decision-making. The technology system used provides tools for improving efficiency and effectiveness. Managers are tasked with overseeing input processes, control of the conversion process and delivery of goods and services to clients.
At Wal-Mart, the Total Quality Management (TQM) concept ensures continuous improvement to reduce costs and increase quality for customer satisfaction within the shortest time possible (Mujtaba & Maxwell, 2007). TQM uses a participatory management approach grounded in employee education and customer needs. It aims at improving product and service quality and ensures that value added activities within an organization are focused on this objective. Elimination of waste in the value chain process is a core component of TQM. Wal-Mart uses these practices in various strategic areas within their organizati...