Principles of Management - Wal-Mart Stores - Assignment Example

PRINCIPALS OF MANAGEMENT (Name) (Institution) (Course) (Tutor's Name) 19th August 2008 Introduction Change is inevitable. Change is continuous. Change is the only stable thing in this world. These are some of the statements that are synonymous with the word change, Alma (2006). Change has even been used as the driving factor in this year’s presidential election campaigns in the US. This goes along way in showing how much people and organizations believe in change. So much can be said of change, but how does it apply in this context to management and in this regard strategic change in the management of a business firm or organization. Change in a business context can be simply said to be the alteration or revolutionizing of the existing management system triggered by various factors in order to fit into a new way of doing things facilitated by the immediate business environment. In most cases the change is usually directed at the employees other than other conventional business aspects. In this paper we look at Wal-Mart stores as the largest superstore in the world and how it can do to apply strategic change management theories in its running to fit in to changing business and industry patterns. Wal-Mart and change The US faces a lot of criticism in the global affairs more than other countries. Perhaps we ask ourselves why. In a world constituting so many countries it does not add up so quickly as to why an insignificant action by one of them should draw their attention with high magnitude as we are witnessing in the campaigns prior to the presidential; elections later this year. One is tempted to say that it is because the US is a super power. However that is just one aspect. A closer look into the analysis of such attention to the country and the pending change in the president show that it is because the country has a lot of influence in many areas touching on almost any country from the war in Iraq to the environmental regulations that the country has spearheaded. The same case applies to big business firms with a wide reach and in this case our company is Wal-Mart Stores. From the stores in China to Brazil and at home in the US, the giant corporation has faced a lot of criticism in various fields. Its not that the company is at fault but its wide reach exposes it to a lot of analysis and criticism some genuine and others unfounded. After severe accusations of employee mistreatment in the US, the company is positioning itself as a company that cares for her employees. This is in light of the fact that these accusations have led to decreased sales across all the branches. Further discrediting for the company has come in the form of a movie titled “Wal-Mart: The High Cost of Low Price” The movie, directed by Robert Greenwald, portrays the company in bad light in terms of unfair competition that is hurting small players in the retail industry (Alma, 2006) Other accusations leveled against the chain store are 1. Pays poverty level wages for its employees 2. 46% of Wal-Mart’s employees’ kids do not have medical cover 3. the company forces employees to work for very long hours 4. the company encourages employees to sign up for welfare benefits, 5. Discriminates against women and minorities 6. Pending case battles against unfair competition 7. Lack of any sound environmental strategy 8. Involved in selling timber products made of endangered tree species from Russia Importance of strategic change management The management at the company under the leadership of company CEO Lee Scott has come out strongly in defense of the company. Invariably he says that though some of these allegations are true, they are going to be investigated and verified and due action taken. In a 2005 report by the McKinsey and Co it indicated that the public believes that the company treats its work force harshly. Subsequently the company introduced some recommendations from a consultancy firm to help the company improve its profile. The bad image projected to the public of the company went ahead and contributed greatly in the fall of the company’s stock prices (Alma 2008). Theoretically there are theories that the company can employ in effecting the change that it has been promising all along in order to improve her profile. According to Burke (2002), some of the most relevant theories used in strategic change management are Business Process Re-engineering Total Quality Management The Holonomic Organization Model Total Quality Management This is one of the most famous management theories in the world. Although its fame has not been that associated with the handling change, Howe (2003) says its one of the most efficient. Its efficacy is strengthened by the ability of the theory to focus on the people aspect and their importance to any organization. In this case Wal-Mart is better suited to employ this theory as its employees are on focus on how badly the management treats them. By introducing reforms that will favor the employees, they will be highly motivated. The same will go ahead in preaching the good news to the client base for improved public opinion that will go along way in accelerating sales. Business Process Re engineering First of all Wal-Mart must be able to identify its component processes that constitute the whole system. What’s a business process then? There has been no definite conformity on the standard definition for this phrase as many people and expertise continue to offer more miscellaneous definitions. The most widely accepted definition is of a structured, measured set of activities designed to produce a specific output for a particular customer or market in any business firm/organization. It implies a strong emphasis on “how” work is done within an organization, in contrast to a product focus’s emphasis on “what”.(Burnes, 2005) A process is thus a specific serialization of work activities across time and space, with a beginning and an end, and clearly defined inputs and outputs i.e. a structure for action. Taking a process approach implies adopting the customer’s point of view. Processes are the structure by which an organization does what is necessary to produce value for its customers. Reevaluation and restructuring of these processes to meet changing market conditions is the key driver to business repositioning and reinvention. (Pauline, 2008) Changing some specified processes in operations brings out a new face of the business as a whole that is guaranteed to add value to the business. The bad public perception of Wal-Mart is hurting business. It therefore goes without saying that the firm needs to reintroduce itself in the market again as a firm with changed attributes to erase the existing image. The company has suffered long enough in the hands of critics. In response to these criticisms, Lee Scott said that the critics were “attacking the wrong company”. This was followed by the release of a documentary that was again meant as per the critics to sanitize the organization’s name in the minds of the clientele. Support as a process- As a retail chain Wal-Mart has to offer form of extra support to their customers and in this case we may be talking about support in form of online shopping and free delivery. The delivery will hence be seen as a form of after sale service that should compliment the already existing forms of after sale services that the company offers. Support also maybe extended into suppliers of the company. The company is commendable in that it is advising its suppliers of timber products to observe from where they source their furniture so as it complies with environmental conservancy guidelines. Management- Change in management maybe confused with the overhauling of the top management employees. Unfortunately or fortunately rather, change in management does not always involve replacing top management executives with a new crop, but it entails change in the management style. This involves handling management as a process itself where appropriate management of the individual tasks will in so doing lead to improved performance of the whole process. The handling of management as a process will more often than not emphasize on adhering to set organizational rules and regulations that provide a guiding framework on the operations of that particular organization. (Burke 2002) It thus simply means that the organization has to position itself strategically to accommodate and accept change as the only savior of the company. The Holonomic Organization Defining a holonomic organization is so broad that the best way to go about it is looking at the aspects that characterize a holonomic organization. Julian (2004) identifies the following characteristics. Have essential characteristics as a whole which are also present in every unit Homogeneity allows minimal effort in controlling, directing and coordinating the whole thing in the departments. Has efficient system in data storage and company history Impervious to market insecurity and negative impact of criticism. Is flexible and easy to adopt change efficiently Flexible in that departmental interdependence can be temporarily halted without crumbling the whole organization. Leadership is based on principles where the general performance of the organization should show high response ability to it. Is intolerant of leaders whose actions are not based on the consistent application of basic principles Is efficiently adaptable Its productivity is optimum. Though many organizations are organized or sub divided into departments and units the fundamental principles brought about by change and adaptation should be evident in all the departments. For instance change in the way Wal-Mart handles its customers should invariably be evident in the way the company handles its employees. This is because the past impression the company has created is that it is more concerned about sales figures and therefore customers than the deliverers of service in the name of its employees. There are detailed characteristics on how to bring into life a holonomic organization. Creating, defining and maintaining clear Strategic Direction In creating we refer to: The organizational culture, vision, and mission statement, The objectives of each mission, The means and ways of strategically achieving the objectives both in the long and short term The long-range strategic, tactical, and annual operating plans for implementing the strategies Establishing organization-wide policies, guidelines, and practices. By maintaining we shall be conducting evaluation tests and making adjustments where necessary Clear strategic direction is established and maintained across the organization as a whole, and for each of its units and Associates Integrating Associate Selection, Development and Flow with the Strategic Direction Conventionally employees are there to follow instructions from the senior management and not question the relevance of the decisions. However, that perception is changing with the modern employee seeking to learn more about the company that he/she works for and the relevance of some of the activities that he is ordered to carry out. It therefore becomes necessary to train him on the importance and the necessity of carrying out some procedures the way they should in order to be in line with the general direction n of the organization in terms of strategies. This should imply to the management that Wal-Mart needs to offer more than a detailed description of the roles and responsibilities of employees in their positions. By training the employees on such issues the employee is now ready to take responsibility over his decision and actions in his execution of his duties. Integrating in maintaining a strategic business direction is important as it ensures a stable and continuous process. It therefore involves the hiring and selecting, orientation, and continual training and development of all employees in order to align them with the organization’s Strategic Direction. The basic teaching of this process is that employees should be strategically treated as a resource (Allan 2002). Ensuring Best Decision-Making By instituting change we have first to evaluate the applicability and the workability of change in our organization. Therefore we ask ourselves, is this best decision? A detailed analysis should thus look into. 1. Applicability of decision taken 2. benefits to the organization and stakeholders 3. any possible harm to stakeholders and minimizing such 4. how the decision meets ethics 5. is the decision in line with the Strategic Direction Evidence has shown that by drawing a majority of the senior management staff into the shareholders pool of big companies such as Wal-Mart ensures that they make the best decision in their own an the companies interests. Ensuring Healthy Problem Solving throughout the Organization Healthy Problem Solving includes processes for: Review and resolution of conflict without creating much fuss. Enhancing the quality of forums/meetings with a view of addressing the problems afflicting the company Encouraging individual growth, empowerment, and Openness to change. Problem solving initiatives may be termed unhealthy and problematic when Attention shifts from what is right to who is right Decisions are not rational Rivalry is turned into personalized conflicts Communication method allows distortion and manipulation of information The object is to assign blame, enhance one's position at the expense of others, or avoid responsibility. Nurturing and Rewarding Opportunistic and Innovative Problem Solving Rapid change creates needs to identify and act upon opportunities as well as innovating new solutions to new unprecedented problems that accompany change. Identification of problems and opportunities that "cut across" existing organizational lines are crucial to the operation of the company itself. This Holonomic Process encourages and rewards all associates to seek out opportunities that benefit the organization and to engage in innovative problem solving e.g. new product teams, quality improvement teams, process management teams etc. Setting ambitious and Realistic Performance Standards In most cases the standards set are more often than not detailed short term objectives of the organization. They should be attainable by extra effort throughout the whole link rewards and personal stakes of all to the success of the organization. Managing change in organizational culture Explaining culture in professionals is sometimes tedious given that an individual’s background interferes a lot with the general understanding of the word culture (Martin 2008). But generally organizational culture is the personality of the organization as a single entity. Culture is simply a set of assumptions, values, norms and tangible signs (artifacts) of an organization that members perceive to their own unique code of identification in the manner of doing things and behavior that makes them different from others. Members of an organization in this case run from the highest ranks to the lowest. The cultural organization of a particular company in most cases is guided by the culture of the industry in which it operates. For instance a financial services firm will have a very different culture from a manufacturing plant. How do we perceive culture? Culture has at times been said to be abstract and indistinct. (Sandra, 2005) It therefore can be said to be an unwritten set of rules to be followed by members of organization in doing things. This now introduces us to the term corporate culture. This is more complex than mere culture. It comprises an organized system that includes feedback from, e.g., society, professions, laws, stories, heroes, values on competition or service, etc whose response is used in enacting organization’s policy. Failure by organization to take seriously the responses from the aforesaid sources may lead to a poor public image and in extreme cases the eventual down fall of the company. For Wal-Mart this is very crucial as it is directly serving the masses whose criticism is very influential as it has been shown in recent cases. There's been a great deal of literature generated over the past decade about the concept of organizational culture particularly in regard to learning how to change organizational culture. Organizational change efforts are rumored to fail the vast majority of the time. Usually, this failure is credited to lack of understanding about the strong role of culture and the role it plays in organizations. That's one of the reasons that many strategic planners now place as much emphasis on identifying strategic values as they do mission and vision. Conclusion Wal-Mart has in the recent past promised to institute alot of changes within its operations. This only came as a result of a public outcry over how the company handles its employees. The outcry has already caused severe damage to the company’s reputation and led to decreased sales. However, all is not gone. The ability of the company to adopt change that can be felt across all the stakeholders in the only option the company has. The discussed theories of change will go along way in placing back the company where it was before it lost track with its stakeholders. The company is commendable for first instituting changes that are very visible such as changing the company logo. References Burke, Wyatt (2002) Organization Change: Theory and practice, (London, SAGE) Burnes, Bernard (2005) Managing change: A strategic approach to organizational dynamics (New York, Macmillan) Hall, Pauline & Maher, Hillary (2008) Agents of change: The managers guide to planning and leading change projects Howe, Robert, (2003) Managing change in a worldwide dynamic business environment (London, Golden Gate University) Julian, Randall, (2004) Managing change/changing managers (Boston, Wesley) Morden, Tony, (2004) Principles of management 2nd ed, (New York, Ashgate publishing house) Nohria, Nitin and Champy, James (2003), Fast forward: The best ideas on managing business change (London, Penguin) Williams, Allan (2002) Managing change successfully: Using theory and experience to implement change, (London Prentice Hall) Whitley, Alma, (2006) Managing Change: A core value approach: Theory and cases 5th ed, (London, Longman) Read More