University of Massachusetts Lowell
Organizational Behavior
Group Project
Wal-Mart and Its Culture
Background
Wal-Mart Stores, Inc. is the worlds largest retailer, and rated as number one in the Fortune
500 company list. In 2011, Wal-Mart was reported to have total revenue of 421,849 million
and net income of more than 16 billion. Founded in 1962 by Sam Walton, Wal-Mart is
currently the largest U.S. employer with 1.4 million workers and 600,000 worldwide[1].
Wal-Marts major success was accounted to occur only after two decades in the 1980s. As
part of the corporation, the major business success was followed by opening the Sams club
in 1983 and the launching the first Super enter in 1988. Within few decades, the
corporation operated different retail formats including various supercenters, food and
drugs, general merchandise stores, small markets called bodegas, cash and carry stores,
membership warehouse clubs, apparel stores, soft discount stores and restaurants.[2] Ever
since low prices is attributed as one of the keys of attaining company success which named
its founder Sam Walton as one of the recognized richest man in the United States less than
two decades in 1980s after establishing the company.
Today, everyone knows Wal-Mart as a public corporation which is currently a worlds
leader in running a chain of large discount department stores. The company faced a highly
publicized criticism about Wal-Mart covering different organizational issues after Waltons
death in 1992. Even though, Wal-Mart has been well heard how the company is criticized
by some community groups including womens rights groups, grassroots organizations, and
labor unions , Wal-Mart is still a high performance organization regarding to its size[3]. It
is interesting to study how Wal-Mart manages its organizational behaviors to face rapid
changes in the external business environment that impact the operation of the internal
environment. In addition, to have to deeper look into Wal-Mart, an interview with Michael
Tran, manager assistance, was conducted. Michael Tran has been working for Wal-Mart a
year and a half, and been in manager assistance position for more than a year.
Wal-Mart Matrix Structure
A companys individual organizational structure is a formal composition of task and
reporting relationships that allows the company to control, coordinate, and motivate
employees so a common goal can be achieved. When composing a structure for a
particular organization, management looks for the most effective way to categorize
departments and their coordinating relationships to achieve the highest levels of
production. Wal-Mart was constructed into a three product divisional structure. The
successful world retailers business categories include Wal-Mart Stores (U.S.), Sams Club
(U.S.), and International stores[4]. The International segment yields about 20% of the
companys overall business income and is responsible for several different types of
restaurants and stores including Wal-Mart and Sams Club in 13 countries and Puerto Rico.
This divisional structure and approach works to Wal-Marts advantage because each
division is open to focus its efforts on specific goals such as product, service, or customers.
Narrowing the focus really allows the company to perform more effectively because they
are allowed to pinpoint specific areas needing change and adjust appropriately.
On the other hand, Wal-Mart adopted the matrix organizational structure within the
company. The matrix structure allows the company to put together very flexible teams
based on the experiences and skills of their employees. Thats why in Wal-Mart the
employees work as a team. Therefore, they are motivated to perform better. This results in
higher efficiency and gives higher returns at lower cost as well. Sam Walton, the founder
of Wal-Mart, used to say: If you want to go fast *€“ go alone and if you want to go far *€“
go together. He believed its because of their teamwork that makes them special. “What
makes ordinary people do extraordinary things? Sam Walton once asked. Arent we a group
of ordinary folks? We really are. And I think we, together as a team, have done
extraordinary things. Weve all grown, weve all accomplished much more than any of us
ever thought that we could.”
Matrix organizational structure in Wal-Mart
As the company business grows and the pace of modern life quickens, Sams philosophy of
teamwork has become even more important. Wal-Marts ability to work together affects the
quality of service our customers receive. To give the very best service to the customers,
and to each other, Wal-Mart relies on guidelines that make its culture great and make the
employees proud to be a member of the Wal-Mart family:
– Three basic beliefs (respect for the individual, service to the customers, striving for
excellence)
– Open communication (open-door policy, associate opinion surveys, focus groups)
– Mutual support (helping each other best serve the customers, having an opportunity to do
something great for the team).
Wal-Mart and Customer Service Culture
Colquitt et al. pointed out organizational culture is social knowledge among members of
the organization.[5]Employees will learn about the important aspects of the companys
culture through other employees. By knowing the culture, an employee will know what the
rules, norms, and values are in order for him to act accordingly. Furthermore, the culture
shapes and reinforces certain employee attitudes and behaviors by creating a system of
control over employees.[6]
Wal-Marts culture set was first initiated by its founder, Sam Walton, which contained a set
of behaviors for the company in its operation. This culture set has been considered as one
of the greatest companys asset to keep the company growing strong. Wal-Mart has been
creating a customer service culture focused on service quality. According to Wal-Mart,
