Organizational Analysis Using the CHRM Decision-Making Framework - Wal-Mart - Case Study Example

Organizational Analysis using the CHRM Decision Making Framework Name Course Name and Code Instructor’s Name Date Executive Summary Implementation of SHRM and internal HRM practices is fundamental in creating an effective, result oriented, efficient, reliable and innovative human resource within any modern organization. Moreover, SHRM helps organizations combat turbulent market environments, which are, coupled with changing economical, technological, environmental, social, and political paradigms. This report seeks analyze Wal-Mart Stores using CHRM decision-making framework and identifying an element that may influence the organization’s operations. Table of Contents Executive Summary ii Table of Contents iii Introduction 1 Wal-Mart Stores Company’s Profile 1 External Pressures to Wal-Mart Stores 2 Internal Pressures to Wal-Mart Stores 3 Aspects of Workforce in SHRM and HRM Concepts 5 Conclusion 8 Recommendations 9 References 10 Introduction Modern businesses in the public and private sectors have played a fundamental role in raising the state of global economies around the world (Bach, 2005). Organizations have invested in strategic mechanisms and management to be able to not only utilize minimal costs in production and accrue maximum profits, but also reinforcing its human resource in producing products and services that are aligned to the needs, tastes, expectations, buying behavior patterns and preferences of existing and potential partners (Mohan & Mark, 2005). In the pursuit of success, examining the internal and external environment of an organization therefore cannot be overemphasized. This report will highlight the organization analysis of Wal-Mart Stores using the CHRM decision-making framework, identifying at least one factor likely to influence the organization, the company’s actual and potential SHRM responses to the identified influencing factor and linking these to the organization’s internal human resource management. Wal-Mart Stores Company’s Profile Wal-Mart Stores, a public global corporation in retailing, was, established in the early 1960’s by Sam Walton and has its headquarters in Bentonville, Arkansas in the United States. Presently, the organization has numerous depot and discount departmental houses in more than 50 countries including Purto Rico, Brazil, Mexico under the brand name Walex, Argentina, and Japan operating under the brand name Seiyu, UK under the brand name Asda and in Canada (Lichtenstein, 2010). The organization was, ranked first in the world’s largest public entity by revenues by the Forbes Global 2000. The corporation has listed its stock in the New York Stock Exchange. In the year financial year 2009, Wal-Mart Stores recorded annual revenues of more than 400 billion US dollars, with an operating income of more than 23 billion US dollars, a net income of not less than 14 billion US dollars and a sum equity value of not less than 70 billion US dollars (Kneer, 2009). In the financial year 2010, the organization had sales amounting to 405 billion US dollars, total assets amounting to more than 170 billion US dollars, posting a 19% pre-tax return on investment, which was equivalent to ROI of the fiscal year 2009, with an extensive workforce base of more than two million workers globally. Wal-Mart boosts of being the largest private employer in Mexico and in the United States and it is, considered as among the front liners in offering employment opportunities in Canada (Kneer, 2009). With such a large employee base, Wal-Mart has had its fair share of challenges as pertains to ensuring the rights of workers are adhered to and that it complies with international policies and guidelines on labor laws and regulations and ensuring that employees access quality working environments and occupational health and safety standards are adhered to (Bach, 2005). This is because, employees globally are more aware of the value they add to organizations, there is intense pressure from the government and labor and human rights activists to do so and realization that human resource is the most reliable and valuable asset an organization be it profit and non-profit making organization has (Paul, 2010). External Pressures to Wal-Mart Stores Wal-Mart stores, as a brand has been able to live by its mission to sell more for less (Bach, 2005). The goals and objectives of Wal-Mart has revolved around making the customer happy by not only satisfying their needs and fitting into the tastes and preferences of their customers, but also making products available at relatively discounted and affordable rates (Kneer, 2009). Be it as it may, the corporation is currently and in the recent past been facing tremendous pressure of labor unions and the State governments in regions they operate, to uphold the worker’s right to associate. The corporation has been reluctant to join labor unions (Bach, 2005). External pressures from communities, labor unions, religious organizations and governments has been associated with the organization’s broad sourcing of supplies from oversea nations, handling of its workforces, lack of adequate ecological standards and utilizing public subsidies (Paul, 2010). The company has refuted the claims and has implemented environmental conservation measures such as supporting green food banks, using pure renewable energy supply, producing zero wastes, and recycling (Lichtenstein, 2010). Internal Pressures to Wal-Mart Stores Having a motivated, empowered, trained and skilled labor force that feels appreciated and rewarded for high performance constitutes to increasing the capacity of operations, effective customer relations, effective and efficient delivery of products and services, hence satisfied customer who help promote increased market shares and profitability for the organization (Holbeche, 2009). Wal-Mart has had problems with its human resource (Bach, 2005). The allegations of locking in employees on night duty, offering workers remunerations that are less than the stipulated minimum wages especially for new recruits and unsafe and insecure working conditions, have damaged the corporation’s brand name and image, which the management is working hard to restore customer loyalty and build a quality brand name and image (Paul, 2010). With increased consumer awareness, more and more of them are unwilling to purchase from companies, even though not proved, that are, perceived unethical and do not comply with applicable laws (Kneer, 2009). Employees have cited reduced rates of health benefits, overcharged health plans, inadequate working environment, strained working relationships between various organization structures and implementation of corporation polices that do not encourage employee’s right to associate as the major issues in the corporation (Paul, 2010). This is, illustrated by the management resistance to Employee Free Choice Act that would allow employees to unionize and necessitate compulsory adjudication of labor rows and cases (Lichtenstein, 2010). The increased job dissatisfaction has resulted in an increased employee turnover of more than 72% (Paul, 2010). Wal-Mart employees have cited gender disparity in the recruiting, selection and training of employees as an impediment to developing their professional and personal lives especially for female workers (Bach, 2005). A lawsuit brought before the US courts, more than one million female workers cried foul about the corporation’s inability to offer equitable wages and employment promotions. However, the corporation has successfully implemented policies and guidelines that work on eliminating gender disparity, which is, indicated by their ranking in the Human Rights Corporate Equality Index (Kneer, 2009). Among aspects of Strategic Human Resource Management and Internal Human Resource management, which I seek to consider in this report, is implementation of a corporate and a business culture that encourages adhering to applicable labor laws in adhering to effective and adequate conditions and environment for workers at Wal- Mart Aspects of Workforce in SHRM and HRM Concepts In the modern turbulent business markets that are coupled with shifting political, social, economical, legal, cultural, technological, financial and environmental forces, the aspect of aligning the organization’s missions, goals and objectives to the need of its human resource is very crucial (Boris, et al., 2004). The one single factor that is likely to influence the operations and profitability of Wal-Mart Stores is its workforce (Bach, 2005). This is because the corporation has not been able to satisfactorily, empower her human resource that is fundamental in promoting employee commitment to offer their best potential, minimizing cases of absenteeism, reducing employee turnover, increasing the rates of retaining skilled and knowledgeable employees that generate increased productivity, quality, competence, and customer satisfaction. According to resource-based theory of SHRM, human resource forms part of the necessary resources in an organization including among others materials, capital, finances, and equipments (Armstrong, 2000). These resources according to the theory should be able to offer value to the organization, it must be unique, and the resources should, not be, easy to duplicate and should not have an alternate to it (Hiit, et al., 2009). This means that for Wal-Mart to sustain its competitive edge and retain its position as a market leader in the retailing industry, the corporation has no option but to invest in creating a human resource that is quality, rare, hard to imitate and that is effectively and, efficiently structured (Holbeche, 2009). This is achievable by implementing best SHRM practices and processes that consists of offering safety and security for the workforces, investing in quality competitive hiring processes, implementing continuous learning of the management and regular training for the workforce in order to equip them with emerging technological solutions and adding more value to their skills and knowledge (Mohan & Mark, 2005). Effective service delivery and customer satisfaction in its entirety depends on flow of communication through response and feedback vertically along and horizontally across the organization structures and various departmental units (Armstrong, 2000). This initiates information sharing which is core in key organization decision making and problem solving processes (Mohan & Mark, 2005). Moreover, it allow for self-management and co-ordination of both the business processes and working teams (Bach, 2005). For Wal-Mart, this can be, integrated through appropriate remunerations for workers based on the corporations’ financial performance and minimizing the status disparities. According to contingency approach to HRM, an alignment of HRM processes with the plans of the organization promotes performance (Mello, 2010). If Wal-Mart does implement a close connection between workforce and its policies with the external environment, then it will clear the negative perceptions, build its brand image, and improve performance. According to the concept of HRM, an organization with an effective human resource management frameworks is not only able to meet its organizational goals and objectives, but also able to hire, retain and manage the best employee in the industry (Mohan & Mark, 2005). Wal-Mart need to consider that offering additional training, offering better pays, rewarding good performance not as a cost but as an avenue to promote quality service, efficiency and increased market share and profitability through customer satisfaction (Boris, et al., 2004). Moreover, understanding that satisfied labor force translate to empowered employees who are more than willing to be more innovative and creative in order to meet modern day customer demands (Mello, 2010). Offering job and financial security, fair wages, and ensuring conducive working environment devoid of mistreatment, oppression, right of employees to associate, standardized working hours with paid overtimes, employee development initiatives such as training and promotions are among ways Wal-Mart Stores needs to implement in order win over the favor of their employees and silence their critics (Hiit, et al., 2009). In addition, they are able to improve the relationships between her and their suppliers thus ensuring on time delivery and arrival of supplies. Currently, the potential SHRM responses is as discussed above while actual SHRM responses in Wal-Mart Stores includes the increased adoption of cultural diversity in its workforce, which accounts for 35% of the labor force across its branches globally. Moreover, integration of the human resource in the development, implementation and analysis of the corporation’s strategic plans, and investing in leadership training (Kneer, 2009). The corporation has effective recruitment and selection processes, improved employee benefit administration strategies, objective performance appraisal, on-job- training for workers, facilitating leadership seminars and offering easy access to employment opportunities through Wal-Mart’s career preference system (Kneer, 2009). To diffuse claims of gender disparity, the corporation has not less than eight hundred female employees who are termed associates, who constitute 60% of Wal-Mart’s US, labor force. For effective performance and job satisfaction by the employees, the management at the Wal-Mart Stores needs to integrate human resource strategies as mentioned above in the corporate and business culture (Bach, 2005). This calls for challenging the status quo and implementing organization change on the beliefs, behavior, operations, traditions, and values of the entire workforce inclusive of the top-level management (Mohan & Mark, 2005). The top-level management has a responsibility to encourage teamwork, align the corporate goals with those of the internal environment, reward performance, involve the employees in matters concerning making fundamental decisions, and encourage information sharing (Holbeche, 2009). Wal-Mart should employ professionals who are skilled and able to effectively and efficiently manage and control the human resources and who are conversant with Wal-Mart’s mission, goals, systems, and operation processes. Conclusion Integrating SHRM and internal HRM practices is fundamental in creating an effective, result oriented, efficient, reliable and innovative human resource within any modern organization. Wal-Mart Stores has faced challenges regarding management of its human resource owing to poor payment plans for its workers, reluctance for its employees to join labor unions and poor working conditions that do not conform to occupational health and safety standards. There have been legal suits due to gender disparity. However, the corporation has invested massively to empower its workforce by implementing competitive recruitment and selection processes, encouraging cultural diversified labor force, offering fair employment and payment for females who account for 60% of its labor force. By use of SHRM resource based theory, Wal-Mart Stores will be able to hire quality employees who are unique and valuable hence increasing its competitiveness. Among actual SHRM responses Wal-Mart Stores have include among others effective recruitment and selection processes, improved employee benefit administration strategies, objective performance appraisal, on-job- training for workers, facilitating leadership seminars and offering easy access to employment opportunities through Wal-Mart’s career preference system. Wal-Mart need to consider that offering additional training, offering better pays, rewarding good performance not as a cost but as an avenue to promote quality service, efficiency and increased market share and profitability through customer satisfaction. Adoption of SHRM and internal HRM practice will help create team work, encourage sharing of information, improve the occupational health and safety standards within the corporation, minimize employee turnover since employees will be more job satisfied, motivated, empowered to meet customer demands and those of their own. Recommendations Among recommendations that Wal-Mart Stores Corporation can make use of in order to ensure it has the best human resource compared to its competitors and reduce the increased employee turnover due to job dissatisfaction, absenteeism and low morale includes Aligning the organization’s goals and objectives with those of its labor force Implementing international standards on occupational health and safety practices Allowing its labor force to freely associate in labor unions Offer competitive benefits to its employees depending on the company’s financial performance and focus more on meeting long-term goals rather than short-term ones Develop close relationships across and along its organizational structures in order to encourage sharing of information, employee participation in key organizational processes such as making decisions and policymaking References Armstrong, M. (2000). Strategic human resource management: a guide to action. London: Kogan Page Publishers. Bach, S. (2005). Managing human resources: personnel management in transition. Sidney: Wiley-Blackwell. Boris G., Ashish N., & Nitin N. (2004). The risky business of hiring stars. Harvard Business Review, 82(5): 93–100. Hiit, M.A., Ireland, R.D. & Hoskisson, R.E. (2009). Strategic management: competitiveness and globalization: concepts & cases. Melbourne: Cengage Learning. Kneer, C. (2009). The Wal-Mart Success Story. Berlin: GRIN Verlag. Lichtenstein, N. (2010). The Retail Revolution: How Wal-Mart Created a Brave New World of Business. Montreal: Picador. Mello, J.A. (2010). Strategic Human Resource Management. London: Cengage Learning. Mohan, S. & Mark A. Y. (2005). The influence of social capital on the types of innovative capabilities. Academy of Management. Journal, 48(3): 450–63. Paul, I., Lori Q. Y., & Hayagreeva R. (2010). Trouble in Store: Probes, Protests, and Store Openings by Wal‐Mart, 1998–2007. American Journal of Sociology, 116(1): 53–92. Holbeche, L. (2009). Aligning human resources and business strategy. London: Butterworth-Heinemann. Read More