29 October 2019Part A- Organization Theories and DesignsWal-Mart is the second largest company in the world, specializing in the control and management of mass merchandising stores. Wal-Mart basically operates through three primary segments, which include Wal-Mart Stores, Sam’s Club and International Segments. The Wal-Mart stores segment further comprises of supercenters, discount stores and neighborhood markets in the United States including its online shopping segment (Research and Markets, Online). Wal-Mart retails a wide variety of merchandise starting from grocery, apparel, books, home appliances and electronics to books, movies, gifts, jewelry and cosmetics etc.
Wal-Mart, internally operates through a number of departments including Aviation and Travel, Business Sustainability, CMI Benefits, Corporate Affairs, Finance, Global Security, Information Systems (ISD), Marketing, Merchandising, Human Resources, Real Estate and Store Planning, Replenishment, Store Operations and Walmart. com. These departments take care of one operation each extensively (Wal-Mart, Online). The global retail industry has come a long way from its humble beginning to reach worldwide sales of about $ 7 x 105 Crores. 30% percent of the worldwide demand is accounted for by the top twenty retailers. The retail sector in general continues to show an upward growth trend.
The retail turnover in Europe is roughly about Euros 2,00,000 Crores and retail stores make up about 20% of the GDP in the USA and is the third largest employer segment. China has drawn many global retailers and about 7% of the population in China is employed by the retail segment. The global retail market is diverse covering a wide number of segments. Global retailers showcase diverse financial and operational subtleties. The primary business of retail companies is to function as the final sales point to consumers for wholesalers and manufacturers.
There are certain characteristics that are specific to the retail industry as such. Firstly the buyer of retail goods is either an individual or a small trader. Secondly the goods bought in retail are basically physical goods although some retailers sell certain types of services. Lastly the frequency of purchase of retail goods can vary depending upon need. It can range from everyday grocery purchase, to annual purchase of large consumer goods such as electronics to white goods.
Additionally the retain sector has considerable diversity in risks, with tight logistics and high standards of execution being the key factors. Retail is largely capital intensive with an organic growth model. The markets of the retail industry are generally local or regional in nature although some retailers extend their operations internationally (Moody’s Investors Service). The below diagram is a representation of the organizational chart of Wal-Mart. It shows functional relationships and the hierarchy of the organization. Wal-Mart was built into a three product divisional structure, with the three divisions being Wal-Mart Stores, Sam’s Club and International Stores.
This divisional structure method is advantageous to Wal-Mart, as each division focuses on specific objectives such as products, services or customers. Each of the three divisions has a President and CEO under who subordinates work. The President and CEO of Sam’s Club have an Operations EVP, a merchandising and replenishment EVP and an EVP GM for Home Services reporting to him. The President of Wal-Mart Stores, which is the largest division, has a large number of people reporting to him. These people range from EVP Operations, EVP Food Consumables, EVP Apparel and Home furnishing, EVP People’s division, Chief of Staff etc.
The Vice President of Internal Stores has the EVP President of the Americas International reporting to him. Wal-Mart has roughly about fourteen departments handling various operations of the company, each concentrating and specializing in the tasks pertaining to that department.