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for rendering us his expertise knowledge and giving the opportunity of
practical experiences through this assignment.
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Knowledge is fundamental for the application of theoretical intelligence. Being
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Letter of
TRANSMITTAL
18th
April 2011
…………………………..
Senior Lecturer
Department Of ……………
…………University
Subject:
Submission of Term Paper
Dear Sir,
With the due respect it is our pleasure to
present the term paper entitled Case Study on “Wal-Mart in America and Around
the Globe”. While preparing the report we have tried our level best to focus
closely on the topic and try to collect most complete and updated information
available. We believe that it will provide a clear idea about Case Study on
Wal-Mart.
To prepare this term paper, we have given
best effort to accumulate needed information.
We will be available to answer any question
for clarification. Thank you for your sincere support.
Sincerely yours,
Table of
Content
TITLE
|
Page No.
|
Company Background
|
6
|
Case background
|
8
|
Relevant Theories
|
10
|
Controlling
|
10
|
The basic control process
|
10
|
Control as a feedback system
|
10
|
Real-time-information and control
|
10
|
Feedforward or preventive control
|
11
|
Control of overall performance
|
11
|
Requirements for effective controls
|
11
|
Executive Summary
|
12
|
Introduction
|
14
|
With a saturation of stores in the rural areas in America, can
Wal-Mart employ the same strategies for setting up stores in the cities? Why
or why not? What difficulties may the company encounter?
|
15
|
Can the organization culture, which was so effective in the United States,
be transferred to other countries? What changes, if any would you suggest?
|
20
|
Could competitors copy the inventory system of Wal-Mart?
|
22
|
Would you like to be a manager at Wal-Mart? Why or why not?
|
24
|
What should Wal-Mart do to be successful in other countries?
|
26
|
How can Wal-Mart
control the global enterprise?
|
30
|
Conclusion
|
33
|
References/Bibliography
|
35
|
Company
Background
Sam Walton, a businessman
from Arkansas, began his retail career when he started work on June 3, 1940, at
a J. C. Penney store in
Des Moines, Iowa
where he remained for 18 months. In 1945, he met Butler Brothers, a
regional retailer
that owned a chain of variety stores called Ben Franklin and that offered him one in Newport, Arkansas.
Walton was extremely
successful in running the store in Newport, far exceeding expectations.
However, when the lease came up for renewal, Walton could neither come to
agreement on the existing store's lease renewal nor find a new location in
Newport. Instead, he opened a new Ben Franklin franchise in Bentonville, Arkansas,
but called it "Walton's Five and Dime." There, he achieved higher
sales volume by marking up slightly less than most competitors.
Fig: Walton’s Five and dime store Bentonville, Arkansas
On July 2, 1962, Walton
opened the first Wal-Mart Discount City store located at 719 Walnut Ave. in Rogers, Arkansas when
he noted the need for serving customer in small towns. The building is now
occupied by a hardware store and an antique mall. Within five years, the
company expanded to 24 stores across Arkansas and reached $12.6
million in sales. In 1968, it opened its first stores outside Arkansas, in Sikeston, Missouri
and Claremore,
Oklahoma. Retailers such as Kmart
and Sears focused on big towns. This created an opportunity for Wal-Mart to
fill people’s needs in rural areas. This small-town orientation is reflected in
the company’s values, which emphasize maintaining good relationships with staff
as well as suppliers. The focus on cost savings enables the company to offer
“everyday low prices”, which has become the familiar company slogan.
The company was incorporated as Wal-Mart Stores, Inc.
on October 31, 1969. In 1970, it opened its home office and first distribution
center in Bentonville,
Arkansas. It had 38 stores operating with 1,500 employees and sales of
$44.2 million. It began trading stock as a publicly
held company on October 1, 1970, and was soon listed on the New York Stock
Exchange. The first stock
split occurred in May 1971 at a market price of $47. By this time, Wal-Mart
was operating in five states: Arkansas, Kansas, Louisiana, Missouri, and
Oklahoma; it entered Tennessee in 1973 and Kentucky and Mississippi in 1974. As
it moved into Texas in 1975, there were 125 stores with 7,500 employees and
total sales of $340.3 million Wal-Mart opened its first Texas store in Mount Pleasant on November 11, 1975.
Case background
Wal-Mart is not just the world's largest retailer. It's the
world's largest company--bigger than ExxonMobil, General Motors, and General
Electric. The scale can be hard to absorb. Wal-Mart sold $244.5 billion worth
of goods last year. To get a sense of just how big Wal-Mart is today, consider
these facts:
·
Wal-Mart employs 1.6 million people. To give us an idea of just
how many people that is, Idaho,
the 39th most populous state, is home to 1.4 million people.
·
Wal-Mart had sales of $312.43 billion in its most recent
fiscal year, which ended January
31, 2006. By comparison, the second-largest retailer in the
country, Home Depot, posted sales of $81.5 billion.
·
Wal-Mart has 6,200 retail outlets. In contrast, Home Depot
has 2,040.
Wal-Mart
Stores Inc. branded as Wal-Mart since 2008 and Wal-Mart before
then, is an American public Multinational
Corporation that runs chains of large discount department stores and
warehouse stores. The company was the world's largest public corporation in
2010 by revenue.
The company was founded by Sam Walton in 1962, incorporated on October
31, 1969, and publicly traded on the New York Stock Exchange in 1972. Wal-Mart, headquartered in Bentonville, Arkansas, is the largest majority private employer. Wal-Mart is also the largest grocery retailer in the United
States. In 2009, it generated 51% of its
US$258 billion sales in the U.S.
from grocery business. It also
owns and operates the Sam's Club retail warehouses in North America.
Wal-Mart is reportedly the wealthiest
company in the world, with approximately $288 billion dollars in annual
sales. In 2004, Wal-Mart opened 242 new
Supercenters around the country, and they plan to open over 1,000 Supercenters
over the next 5 years—exploring the possibility of expanding their market into
urban centers such as New York
and Chicago.
According to Wal-Mart’s investor web site,
As of September 30, 2005,
the Company had 1,253 Wal-Mart stores, 1,876 Supercenters, 555 Sam’s Clubs and
95 Neighborhood Markets in the United
States. Internationally, the Company
operated units in Argentina
(11), Brazil
(151), Canada
(261), China
(49), Germany
(88), South Korea
(16), Mexico
(730), Puerto Rico (54) and the United Kingdom
(295).
Relevant Theories
Controlling: The managerial function of controlling is
the measurement and correction of performance in order to ensure that enterprise
objectives and the plans devised to attain them are being accomplished. It is a
function of every manager, from president to supervisor.
The basic control process: Control techniques and system are
basically the same regardless of what is being controlled. Wherever it is found
and whatever is being controlled, the basic control process involves three
steps: [1] establishing standards, [2] measuring performance against these
standards, and [3] correcting variations from standards and plans. There are different
kinds of standards, and all should point out deviations at critical points.
Performance can be measured against best industry practices, an approach known
as benchmarking.
Control as a feedback system: Managerial control is usually perceived as
a simple feedback system similar to the common household thermostat. This
system places control in a more complex and realistic light than if it is
regarded merely as a matter of establishing standards, measuring performance,
and correcting for deviations. Managers do measure actual performance, compare
this measurement against standards, and identify and analyze deviations.
Real-time-information and control: Real-time information is information about
what is happing while it is happening. It is technically possible through
various means to obtain real-time data on many operations.
Feed forward or preventive control: No matter how quickly information is
available on what is occurring, there are unavoidable delays in analyzing
deviations, developing plans for taking corrective action, and implementing
these programs. In order to overcome these time lags in control, it is
suggested that managers utilize a feedforward control approach and not rely on
simple feedback alone. Feedforward control requires designing a model of a
process or system and monitoring inputs with a view to detecting future
deviations of results from standards and plans, thereby giving managers time to
take corrective action before problems occur.
Control of overall performance: Many overall control are financial, one of
which is profit and loss control. Another is the exercise of control through
calculating and comparing return on investment. This approach is based on the
idea that profit should be considered not as an absolute measure but as a
return on the capital employed in a business or a segment of it. The management
audit has also been used as a control device. Bureaucratic control is based on
rules, regulations, policies, procedures, and formal authority. On the other
hand, clan control is influenced by norms, shared values, and expected
behavior.
Requirements for effective controls: If controls are to work, they must be
specially tailored to plans and positions, to individual managers, and to the
needs for efficiency and effectiveness. To be effective, controls also should
be designed to point up exceptions at critical points, to be objective, to be
flexible, to fit the organization culture, to be economical, and to lead to
corrective action.
Executive Summary
Wal-Mart has grown into one of the largest
discount retail stores in the world and has proven that the type of operation
that they have is successful and effective. Although they are the industry
leader, in the recent years their sales growth rate has not experienced such of
an increase. The decrease of the slowing growth rate from their previous
double-digit growth has begun to develop problems and serious concern for the
company. They are now faced with the attempt to understand the symptoms and
causes of the problem and how to regain their growth strength.
Internally analyzing with the VRIO system,
Wal-Mart tends to still prove their strength. One of their largest strengths is
the distribution system that they use. This decreases their cost and delivery
time by remarkable numbers. Their use of the EDLP (Every Day Low Prices)
executes the most success in being the lowest prices compared to their
competitors. New systems have also now been implemented to decrease the cost of
loss of inventory, shoplifting, or simply not having an item in stock. Although
the company is so large they are able to stay well organized, one way in which
they do so is by keeping all of the vice presidents of the stores in the
headquarters to maintain use of internal strategies.
The analysis showed the Wal-Mart faces
almost no threat of entry with because Wal-Mart’s economy of scale eliminates
the immediate threat of new entrants into the market. With the products that
Wal-Mart offers, there is a large chance for substitutes, but since the range
is too large for smaller stores the only other substitutes are other large
discount retailers. Threat of substitutes is not very apparent due to the fact
that the number and size of Wal-Mart is much greater than any other supplier.
Since it is difficult to measure name brand, the threat of buyers is apparent,
although the biggest strength that Wal-Mart has is that the average consumer is
price sensitive therefore they will continue to search for the low prices.
These low prices are the main focus of the threat of rivalry. Wal-Mart still
continues to remain very strong due to their wide variety and low prices.
Recently Wal-Mart approaches the maturing
market leaving them in need of new market opportunities to retain or increase
their sales and maintain competitive against their industry. Initially using
the analysis conducted internally and externally once option would be to expand
in select international markets. One struggle has been that some global markets
are not becoming a strong profitable investment therefore if they would
withdraw from these markets that are weaker and focus on the stronger global
markets.
Introduction
Wal-Mart is the world's largest retailer.
Wal-Mart sold $244.5 billion worth of goods last year. Wal-Mart employs 1.6 million people. To
give us an idea of just how many people that is, Idaho, the 39th most populous state, is home
to 1.4 million people. Wal-Mart has 6,200 retail outlets. In contrast, Home
Depot has 2,040. Wal-Mart Stores Inc.
branded as Wal-Mart since 2008 and Wal-Mart before
then, is an American public Multinational Corporation that runs chains of large discount
department stores and warehouse stores. The company was the world's largest
public corporation in 2010 by revenue.
We
have done our case study on Wal-Mart, because we are eager to take the taste of
the managerial activities of a world class organization like- Wal-Mart. As we
are doing a core level management course and we all want to work in managerial
level in our entire career, we think it is fruitful for us knowing the
practical managerial working function of an organization that become successful
in the world market through its effective managerial process. From this case
study, we know, how an organization should make its strategy for its different
market situation; what difficulties the company can face in following those
strategies and its way to overcome those encounters; a companies organization
culture and its inventory system; the quality of an good manager; way of
controlling the global market and become successful etc.
We
believe that this case study and practical knowledge will help us in our entire
career to be a good and successful manager of an organization.
Q1.With a
saturation of stores in the rural areas in America, can Wal-Mart employ the
same strategies for setting up stores in the cities? Why or why not? What
difficulties may the company encounter?
As determined by the IE Matrix, Wal-Mart
fits into the category of grow and build strategies. Thus, the aforementioned
strategies would fit Wal-Mart very well. All three of the strategies that we
decided on are grow and build types. The three strategies that Wal-Mart would
benefit most from are: market penetration, market development, and product
development.
1.
Market Penetration:
The market penetration strategy is when a
company is seeking to increase the market share for present products or services
in present markets through greater marketing efforts. This is also an
appropriate strategy for Wal-Mart to implement because they can take advantage
of the bankruptcy of K-Mart. Through the increase of Wal-Mart's marketing
campaigns, they can attract and retain most of K-Mart's customers. Also,
because K-Mart has been closing hundreds of stores, Wal-Mart has a distinct
advantage of controlling markets where both Wal-Mart and K-Mart are located.
Also, because of Wal-Mart's economies of scale against its rivals, they have
the power to influence markets in their direction.
The company culture is also well suited for
this type of strategy. The management of Wal-Mart has ingrained in the
employees the core values needed to excel at increasing their market penetration.
Again, their EDLP and Rollback campaigns can readily be diffused into markets
where they do not have as much of a market share as they want. This will also
have a positive impact on the company culture because of the increased
opportunities available to current employees. As their market share increases,
they would also probably begin to add to their product offerings in that area.
This will, in turn, allow employees the ability to grow with the company and be
promoted into higher positions.
2.
Market Development:
The costs involved with market penetration
are not nearly as great as with market development. Wal-Mart only needs to
increase its marketing campaigns in the target areas.
3. Product Development:
Creation of products
with new or different characteristics
that offer
new or additional
benefits
to the customer.
It may involve modification
of an existing product or its presentation,
or formulation of an entirely new product that satisfies a newly defined
customer want
or market
niche.
Product development is a broad field of
endeavor dealing with the design, creation, and marketing of new products.
Sometimes referred to as new product development (NPD), the discipline
is focused on developing systematic methods for guiding all the processes
involved in getting a new product to market.
There
are a number of organizations dedicated to supporting product development
professionals, such as the Product Development and Management Association
(PDMA) and the Product Development Institute (PDI). According to the PDMA, the
organization's mission is "to improve the effectiveness of people engaged
in developing and managing new products - both new manufactured goods and new
services. This mission includes facilitating the generation of new information,
helping convert this information into knowledge which is in a usable format,
and making this new knowledge broadly available to those who might benefit from
it."
The process of product development is-
Ø Idea
Generation.
Ø
Idea Screening.
Ø
Concept Development and Testing.
Ø
Business Analysis.
Ø
Beta Testing and Market Testing.
Ø
Technical Implementation.
Ø
Commercialization (often considered post-NPD).
Ø
New Product Pricing.
The slogan of Wal-Mart is “Always Low Prices. Always.” Wal-Mart’s main strategy is to focus on a specific
type of customer and the needs of that customer, namely, the budget customer
who doesn’t want to spend a lot for the things they buy. Hence, the middle
circle is the focus of their strategy. This main focus permeates every decision
they make regarding the other two circles.
“Almost anything
as long as it doesn’t cost a lot.” You’ll never see expensive products in a
Wal-Mart store. This is because whenever they decide to offer a new product to
their customers, the main criteria it has to meet is affordability. It must
focus on their main strategy of meeting the budgetary needs of their target
customers.
While their Web
presence is increasing, their main focus has been strategically located retail
stores. You’ll probably never see a Wal-Mart store located in an expensive
neighborhood. That’s simply not their target customer and they know it.
Literally every decision they make about accessing their customers is based on
the main focus of targeting the budget customer. I know this in part because I
live in Utah.
Utah
residents are well known for their conservative spending habits. From my home I
can drive to four different Wal-Mart stores within 30 minutes. I’m told that
these four stores are among the highest revenue-generating Wal-Mart stores in
the world.
So, Wal-Mart’s circles of business strategy look like this:
Wal-Mart knows
that by choosing this strategy there will be tradeoffs involved. There will be
desirable products that they won’t sell, customers that won’t shop at Wal-Mart,
and geographic markets in which they will never be able to put a store.
However, they’re willing to accept these tradeoffs and let those customers go
elsewhere. As with Jiffy Lube, they understand that their chosen strategy is
determined as much by what they’ve chosen not to do as it is by what they’ve
chosen to do.
Considering those
strategies and functions, it is recommended that, with a saturation of stores
in the rural areas in America,
Wal-Mart can successfully employ the same strategies for setting up stores in
the cities.
The difficulties
that Wal-Mart may encounter are-
Ø
Being number one means that you are the target of
competition, locally and globally.
Ø
Being a
global retailer means that you are exposed to political problems in the
countries that you operate in.
Ø
The cost of producing many consumer products tends to have
fallen because of lower manufacturing cost. Manufacturing cost has fallen due
to outsourcing to low-cost region of the world. This has lead to price
competition, resulting in price deflation in some ranges. Intense price
competition is a threat.
Ø
Because of a huge span of management, Wal-Mart could leave
it weak in some areas.
Ø
Since
Wal-Mart sell products across many sectors (such as clothing, food, or
stationary), it may not have the flexibility of some of its more focused
competitors.
Q.2 Can the organization
culture, which was so effective in the United States, be transferred to
other countries? What changes, if any would you suggest?
Yes, the organization culture can which was
so effective in the United
States be transferred to other countries.
Wal-Mart organization culture is built on
three basic values promulgated by Sam Walton. It was established in 1962 and
still permits the organization. The values are (1) respect for the individual,
(2) service to the customer and (3) striving for excellence. Other factors
influencing the organization culture include exceeding the expectations of customers,
assisting people so that they can make a difference, quickly approaching
customers to help, doing today what can be done today rather than postponing
it, and pricing for providing value to the customer. The organization culture
has an impact on the staffing function. Associates are created with respect in
this lean organization. Having a great of authority motivates people. Training
is decentralized with management seminars offered at the distribution centers
instead of at the company headquarters. The company atmosphere encourages
employees to submit suggestion, many of them being implemented through the “Yes
we can sum” Suggestion system. Associates are rewarded bonuses for cost
reduction through the “shrink incentive plan”. Supervisors and managers
received a salary as well as incentive compensation base on store performance.
Associates can also participate in profit sharing plan. With Wal-Mart is
contributing a certain percentage. Above strategies will work in every corner
of the world. As they provide better goods at low cost through highly competent
employee and skill management and as they maintain good relationship with its
supplier, they can provide vital input which will help it to grow in any sphere
of the world. Their management is decentralized, that’s why department managers
can take decision of their own. So they can take decision according to the
demand of that market in which they are operating. As the scenario varies from
country to country, they can easily cope up with the unique situations that may
arise in case of operating outside of the United States.
Their strategy “everyday low prices”
obviously would be welcomed all over the world, but it might create some
questions in the mind among certain communities “are they providing quality
goods? In this case they may clarify through providing information about their
strategies in case of going for operation in a new country.
Only
one thing that can be recommended in this case of them is that they should
focus on their employees’ health care benefits. If employees remain satisfied,
then they will create value for the organization.
Q3.Could competitors copy the inventory system of Wal-Mart?
An inventory
control system is a process for managing and locating objects or materials.
In common usage, the term may also refer to just the software components.
Wal-Mart is the world's largest and most
profitable retailer, with $44 billion in 1992 sales and 380,000 employees. Its
growth from a single store in Rogers,
Arkansas to almost 2,000 bright,
attractive stores in 43 states is legendary in American business. As it is the
largest retailer company, its inventory system is unique and of course better
and bigger. It has an effective, efficient inventory control system, or inventory
management system. Wal-Mart's system helps it maintain its signature
"everyday low prices" by telling store managers which products are
selling and which are taking up shelf and warehouse.
Wal-Mart uses the SMART system. SMART is
basically a tracking system, it keeps track of all inventory, the on-hand
counts, and can automatically reorder product that is low or empty. As stated
last week, most interaction with the SMART system is through the Telxon. Just
to recap, the Telxon is a 900 MHz wireless handheld terminal equipped with a
barcode scanner. When a barcode is scanned, almost instantly the item numbers,
a short description, on hand counts and amount on order are displayed. The
Telxon is linking to the SMART database to retrieve all of this information.
All from a simple thing like a barcode which is just a set of numbers that are
unique, like a primary key.
Strength of SMART:
The actual database has to be enormous.
There are so many products that the Wally keeps track of. All of which must be
in the same database because products we don't carry will still scan and give
all the relevant information. This is helpful because it allows people to
return products from a "Super
Center" that carries
a much larger stock than we. Another strong point of the SMART system is that
it is linked to the cash registers. When a product is sold, inventory is
updated automatically. On hand counts are updated and on some products they are
reordered automatically, depending on how many are left.
So it is not easy for the competitors to
copy the inventory system of wal-mart. For copping the system the competitors
have to big enough and have to maintain a huge database and the SMART
technology as well.
Q4.Would you like to be a manager at Wal-Mart? Why or why not?
Managerial work is a conceptual work.
Becoming a manager may mean that the status of a project becomes more important
than the technical nuances of that project. It’s going to be a different focus
from what you’re used to so you’ll need to prepare yourself for it. One change
that the shift to management will bring is that you will now represent your
coworkers when interacting with your boss. Your boss may not want to hear every
technical detail and may be more focused on whether the project will be
completed successfully and on time. You’ll need to start thinking like a
manager before you can act like one.
Many techies want to go to the office and
work in solitary confinement. However, if you want to mentor others and guide
them through their tasks, then you may very well make a good manager. Being a
manager and accepting responsibility for those under you by definition places
you in a high profile position. I find that developing my employees’ skills and
seeing them advance in their careers is the most valuable part of being a
manager.
A manager doesn’t necessarily have to be a
people person, but it helps. Managers spend most of the day working with others
so it’s generally a good idea to have strong interpersonal skills. Managers
have to solve people problems and it helps to feel a sense of accomplishment
after doing so.
There is a difference between a manager and
a leader, but each manager must have some basic leadership skills and the
desire to influence coworkers. A good manager is not only responsible for
himself, but also for his team. Leadership is something that you’ll have to be
comfortable with if you want to be a manager. The ability to make decisions and
the capacity to carry them out are essential management skills.
A good manager has to understand group
dynamics and how best to facilitate employees working together. If you see a
challenge in interacting with coworkers and their personalities, then
management will provide you with those challenges on a daily basis. It takes
patience and understanding to be able to guide employees and to build consensus
during team meetings. A good manager knows how to bring out the best in his
team and that usually requires maintaining a delicate balance between team
members’ personalities.
Being a Wal-Mart manager is a
chance to stand at the forefront of retailing. It’s a job with big
responsibilities, and one which requires true leadership and in-depth knowledge
of our stores. Millions of customers come to Wal-Mart Stores each week looking
for great values, and our managers are vital in helping them return home
satisfied.
Wal-Mart’s three levels of store
management—assistant manager, co-manager and store manager—call for individuals
with great communication, organizational and financial skills. These qualities
help managers motivate their teams and ensure that our stores continually move
forward. Above all, we look for individuals with great people skills, because
the most important product we offer is customer satisfaction.
Considering my managerial level
of skills and Wal-Mart’s functions, position as well as organizational
environment, I would like to be a manager of Wal-Mart.
Q5. What should Wal-Mart
do to be successful in other countries?
In 1991, Wal-Mart became an international
company when they opened a Sam's Club near Mexico City. Just two years later, Wal-Mart
International was created. They’ve created stores with different styles and
formats to fit in with local customer needs, desires, and customs. More than 75
percent of our international stores operate under a different banner than
Wal-Mart. But, whether they’re Pail in Costa Rica, Todo Dia in Brazil, or
Despensa Familiar in Central America, all of our stores share a common goal:
Save people money, so they can live better. Today, Wal-Mart International is a
fast-growing part of Wal-Mart’s overall operations, with 4,573 stores and more
than 730,000 associates in 14 countries outside the continental U.S. In fact,
on November 29, Wal-Mart confirmed an offer to acquire 51 percent of Mass mart
in South Africa.
Wal-Mart has
expanded its operation in Argentina, China, Honduras, Nicaragua, Brazil, Costa Rica,
India, United Kingdom, Canada, El Salvador, Japan, Chile, Guatemala, Mexico,
and Salvador.
But Wal-Mart
doesn’t succeed in all those areas. Wal-Mart’s strategies fail in Europe especially in Germany. The main reason behind
this failure was Wal-Mart’s attempt to apply the company’s proven US success
formula in an unmodified manner to the German market, however, turned out to be
nothing short of a fiasco. Moreover, instead of attracting consumers with an
innovative approach to retailing, as it has done in the USA, in Germany the
company does not seem to be able to offer customers any compelling value
proposition in comparison with its local competitors.
So, it is
recommended that, to be successful in other country, Wal-Mart should follow the
following strategies:
1. Different methods of
communication across different cultures:
Communication
is the process of conveying messages. ‘’Successful communication in the
international business environment requires not only an understanding of
language, but also the nonverbal aspects of communication that are part of any
community. Different countries are going to have different ways of communicating.
If certain executives of a company want to do business with people from
different countries, they need to understand how to communicate clearly with
them, without mistakenly doing something wrong. The most obvious way of
communicating with different people is with words, and therefore, some
executives learn how to speak the language spoken in the foreign country. This
act can show that the executive is truly dedicated to the work, and that he is
willing to do anything to complete the deal. Greeting rituals are sometimes
overlooked, but they shouldn’t be because they are more important in some parts
of the world than others. In Japan,
failure to show respect by exchanging business cards can get negotiations off
to a very bad start. While in France,
greetings are highly personal and individual…as workers expect to be greeted
individually. Another form of communicating is through hand gestures. Often
goes unnoticed, hand gestures are as important as words themselves because they
too have meaning behind them. Cultures located in southern Europe
and the Middle East employ a wide variety of
gestures frequently with purposefulness. Some hand gestures have different
meanings in different countries. For example, the hand gesture where the index
finger and thumb touch and create a ‘zero’ can mean different things in
different places. In the US
and UK,
it means ok. In Russia
it means zero. In Japan
it refers to money. While in Brazil,
it is viewed as an insult.’’ Time is another communication system. In western
cultures, people like to get to the point of the matter in business meetings
and conversations. However, in other countries like Saudi Arabia and Russia, it is
customary to converse first about unrelated matters before starting the
business discussions for which the meeting was arranged. Barging straight into
the business issue, without informal small talk at the beginning, may make them
very uncomfortable and may ruin the negotiations.
2.Methods of managing across cultures:
(1)
Hierarchy:
This refers to the way people
view how much they defer to people in authority, whether they feel entitled to
express themselves and how empowered they feel to take the initiative on
matters before them. For example, Canada believes in egalitarianism,
while nations like India,
Japan,
China,
Germany,
and Mexico
are highly hierarchical.
(2)Group
focus:
This refers to whether people
consider that accomplishment and responsibility are achieved through individual
or group effort, and whether they tend to identify themselves as individuals or
members of a group. Canadians are individualists while Brazilians, Chinese,
Mexicans and Japanese are group-focused.
(3)Relationships: This is about whether trust and
relationships are viewed as a prerequisite for working with someone. Canadians focus
primarily on the transaction, rushing to deal, while the Chinese, Italians, and
Spaniards, for example, focuses on nurturing relationships first.
(4)Communication
styles:
This covers matters like verbal
and non-verbal expression, how directly or indirectly people speak, and whether
brevity or detail is valued in communication. Israel, Denmark, Germany and
Sweden use a direct style, while indirect communication styles are the norm in
China, United Arab Emirates, and Japan.
(5)Time
orientation:
This refers to the degree to
which people believe adhere to schedules United States, Germany, Denmark and
Switzerland follow schedules while countries like Saudi Arabia, Spain,
Thailand, and the United Arab Emirates are unconcerned about schedules and
deadlines.
(6)Change
tolerance:
How people are comfortable with
change, risk-taking and innovation. Along with Australians, Canadians are the
most tolerant of change, while Saudi
Arabia, Indonesia, Mexico and Russia are
change-averse.
(7)Motivation:
work/life balance: This
characteristic examines whether people work to live or live to work. Canadians
are driven by work and the status it provides - although not as much as people
in China, Japan, and the U.S. - while in Norway, Saudi Arabia, United Arab
Emirates, India and Mexico, family-work balance is treasured.
Last of
all, it is recommended that, at the same time, Wal-mart also should stable on
its legendary “we sell for less – always“, “everyday low prices” and
“excellent service” and “value Proposition”.
Q6. How can Wal-Mart control the global
enterprise?
Control is one of the managerial
functions like planning, organizing, staffing and directing.
It is an important function because it helps to check the errors and to take
the corrective action so that deviation from standards are minimized and stated
goals of the organization are achieved in desired manner. According to modern
concepts, control is a foreseeing action whereas earlier concept of control was
used only when errors were detected. Control in management means setting
standards, measuring actual performance and taking corrective action. Thus,
control comprises these three main activities.
According to Henri Fayol, Control of an undertaking consists of seeing
that everything is being carried out in accordance with the plan which has been
adopted, the orders which have been given, and the principles which have been
laid down. Its object is to point out mistakes in order that they may be rectified
and prevented from recurrin.
According to Harold Koontz, Control is checking current performance
against pre-determined standards contained in the plans, with a view to ensure
adequate progress and satisfactory performance.
Characteristics of Control:
- Control is a continuous process.
- Control is a management process.
- Control is embedded in each level of organizational hierarchy.
- Control is forward looking.
- Control is closely linked with planning.
- Control is a tool for achieving organizational activities.
The culture of Wal-Mart can
be defined in one word: control. The company has grown to be the world’s
largest retailer through a process of tightly-managed aggressive expansion.
From the supplier’s stockrooms to the store’s shelves, the corporate model of
Wal-Mart is one that permits little deviation. It is therefore unsurprising
that attempts to compel the company to change its ways have been doomed to
failure.
Process of Controlling:
- Setting performance standards.
- Measurement of actual performance.
- Comparing actual performance with standards.
- Analysing deviations.
- Correcting deviations.
In normal thinking, Wal-Mart
can control the global enterprise by following those normal controlling process.
But the most important part of Wal-Marts contolling process of global
enterprise are organizational control and operational control.
Organizational
Control: The concept of organizational control is implicit
in the bureaucratic theory of Max
Weber. Associated with this theory are such concepts as "span of control",
"closeness of supervision", and "hierarchical authority".
In contrast, Wal-Mart operate and "control" the system with respect
to the daily inputs of material,
information, and energy. In both instances, the
elements of feedback are present, but organizational control tends to review
and evaluate the nature and arrangement of components in the system, whereas
operational control tends to adjust the daily inputs. The direction for
organizational control comes from the goals and strategic plans of the
organization. General plans are translated into specific performance measures
such as share of the market, earnings, return on investment, and budgets. The process
of organizational control is to review and evaluate the performance of the
system against these established norms. Rewards for meeting or exceeding
standards may range from special recognition to salary increases or promotions. On the other hand, a failure to
meet expectations may signal the need to reorganize or redesign.
Operational Control: Operational control serves to regulate the day-to-day output relative
to schedules, specifications,
and costs. The most difficult
task of management concerns monitoring the behavior of individuals, comparing
performance to some standard, and providing rewards or punishment as indicated.
Sometimes this control over people relates entirely to their output. For
example, a manager
might not be concerned with the behavior of a salesman as long as sales were as
high as expected. In other instances, close supervision of the salesman might
be appropriate if achieving customer
satisfaction were one of the sales organization's main objectives.
Control mechanisms are used by organizations to help regulate processes
which add to company-wide goals. Wal-Mart is a huge industry functioning
to meet the needs of its customers, employees and suppliers by using controls;
controls consist of market control, clan control, manager audits, and
performance standards. Each control is important to prosper efficiently in the
business world; in addition, increasing customer, employee and supplier
assurance. The efficiency of each control impacts the four functions of
management; organizing, planning, controlling and leading. Wal-Mart’s success
is motivated by control mechanisms that are regulated and constantly evaluated.
Conclusion
Wal-Mart has been extremely successful in the past, and has a very
promising future
ahead of them. Unfortunately, there is always a negative side to success. For Wal-Mart, they are faced with opposition from people who are concerned with the “little guy.” The fact that Wal- Mart has the ability and resources to be such a major competitor in the retail industry scares some people. Small stores in small communities, as well as employees, target Wal-Mart because they know it is a large company with the resources to defend itself. In order to improve its image in the eyes of these people, Wal-Mart may want to address these issues head on. Wal-Mart has already taken giant strid to be seen as a more environmentally friendly organization, as well as to increase the benefits of its employees. They should continue this approach, possibly even more publicly than other retailers in the industry. Wal-Mart could even start a campaign to help the “little guy.” Since they have such a global Wal-Mart could even start a campaign to help the “little guy.” Since they have such a global impact, any issue they raise will undeniably get a great deal of attention. In a campaign of this sort, Wal-Mart could focus on promoting the other small specialty stores in their community. They could help advertise for local shops that do not sell competing products, but complimentary ones. Instead of taking sales away from themselves, Wal-Mart could change their image to one of a company that cares about the community.
ahead of them. Unfortunately, there is always a negative side to success. For Wal-Mart, they are faced with opposition from people who are concerned with the “little guy.” The fact that Wal- Mart has the ability and resources to be such a major competitor in the retail industry scares some people. Small stores in small communities, as well as employees, target Wal-Mart because they know it is a large company with the resources to defend itself. In order to improve its image in the eyes of these people, Wal-Mart may want to address these issues head on. Wal-Mart has already taken giant strid to be seen as a more environmentally friendly organization, as well as to increase the benefits of its employees. They should continue this approach, possibly even more publicly than other retailers in the industry. Wal-Mart could even start a campaign to help the “little guy.” Since they have such a global Wal-Mart could even start a campaign to help the “little guy.” Since they have such a global impact, any issue they raise will undeniably get a great deal of attention. In a campaign of this sort, Wal-Mart could focus on promoting the other small specialty stores in their community. They could help advertise for local shops that do not sell competing products, but complimentary ones. Instead of taking sales away from themselves, Wal-Mart could change their image to one of a company that cares about the community.
Along with this, Wal-Mart should focus on their employees. Publicly giving employee
benefits or rewards will increase morale as well as their image. Once Wal-Mart has invested in their image in their home country, they should also focus on increasing their market share in the international markets that they are not already involved in.
benefits or rewards will increase morale as well as their image. Once Wal-Mart has invested in their image in their home country, they should also focus on increasing their market share in the international markets that they are not already involved in.
References/Bibliography
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ANN ZIMMERMAN and KRIS HUDSON, MONDAY EXTRA April 17, 2006; The Wall
Street Journal. Published in
Proceedings
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Kenneth
E. Stone, Professor of Economics, Iowa State University-1997; Farm Foundation, Chicago, Illinois;
Increasing Understanding of Public Problems and Policies.
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Walton,
Sam and John Huey. Sam Walton-1992, America, New York: Doubleday.
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Larry R.
Smith, Ford North American Truck, Six Sigma and the Evolution of Quality in
Product Development.
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Institute
for World Economics and International Management
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http://www.oppapers.com/join.php
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www.wikipedia.com
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Mahoney,
Tom. The Great Merchants. New York:
Harper & Brothers, 1955.
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Discount
Store News. “Discounter of the Decade.” December 1989.
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Barney,
Hesterly (2006) Strategic Management and
Competitive Advantage. (p. 77). Upper Saddle River, NJ:
Pearson Education Inc.
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http://www.walmartfacts.com/FactSheets/Logistics.pdf
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http://sites.target.com/images/corporate/about/pdfs/corp_factcard_021108.pdf
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Barney,
Hesterly (2006) Strategic Management and
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Mark. (2006) “Wal-Mart
Finds That Its Formula Doesn’t Fit Every Culture” New York Times. Retrieved March 1, 2008.
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Matthew
D. Sarrel,” Do I want to be a Manager?”
Thankyou
Thankyou
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