A Research Paper on
Wal-Mart Management, Leadership
and Organizational Culture
I. Differentiate Between Management and Leadership
At Wal-Mart, management is a mixture of controls and standards with a certain degree of freedom for
everyone to be able to test on new things and continue to innovate for improvement. The company has
excellent controls and they make the company good. Management strategy is built on teams and the
leaders go through the process of working with their team members. Leaders go with the group and
after every major operation, they all sit down together to analyze the strengths and improve on the
weaknesses of the endeavor. Sam Walton, founder of Wal-Mart, introduced some of the basic
concepts of management which were popular with employees until the present. He offered stock
options and store discounts to his employees. Walton believed that teams will always do better than
individuals hence; he has always tried his best to make his employees happy since happy employees
make happy customers and more sales. Another reason is that he believes that the employees would
care about the company more when they are a part of it and their success is dependent on the
company's success. At Wal-Mart, management encourages their employees to be open to talk and air
out their concerns and problems. This is what they call the "open door policy" management style.
"Leadership is an organizational role involving establishing a clear vision, communicating the vision with
others so that others will follow willingly, providing information, knowledge, and methods to realize that
vision, and coordinating and balancing the conflicting interests of all members or stakeholders"
(Business dictionary, 2009). Leadership at Wal-Mart is shown with the way their leaders keep people
focused on the goals and mission of the company and motivating them and being with them to
overcome the obstacles. Members are called associates and leaders are very active in implementing the
organization's plans. Walton used the charismatic style of leadership which creates wonderful morale to
the staff by giving all the kinds of support for the whole team in accomplishing its goal. Walton also
uses a leadership that involves any person at any level in the organization to become a leader and this
leader tries his best to meet the needs of the team. This is called the servant leadership style. And it is
manifested in the way the teams in the organization get together and help each other with the goals of
improving team performance. Leaders also encourage their team members to be open with any
concern that they have. To differentiate the two terms, Management is the planning and organizing of
the company's vision and mission which shapes their organizational culture while Leadership is the way
their leaders implement their management plans. The management and leadership styles at Wal-Mart
contribute so much to the success of the organization.
II. The Roles and Responsibilities of Organizational Leaders in Organizational Culture.
Sam Walton developed the principles for which Wal-Mart Stores, Inc. are going to carry out every day in
order to create a unique corporate culture which is the key to Wal-Mart's competitive
advantage. Management believes that the opinion of every associate is respected and valued as
managers are considered "servant leaders" who help their associates develop their
potentials. According to Wal-Mart(2006), "The 1991 Sam's Associate Handbook declared that Wal-Mart
"believes management's responsiblity is to provide leadership that serves the associate. Managers must
support, encourage and provide opportunities for associates to be successful. Mr. Sam calls this 'Servant
Leadership.'" That phrase, with its subtle Christian connotation, has increasingly appeared in Wal-Mart
publications and spread to a growing number of company vendors. Another principle is that the
customer is the boss hence; all is done to make shopping at Wal-Mart a friendly and pleasant
experience. The leaders, together with their associates, do everything to give the best for their
customers. Wal-Mart leaders and associates share an exceptional commitment for customer
satisfaction by gathering regularly to cheer and review sales and discuss goals. These three principles
help in shaping a unique corporate culture that is instilled in the hearts and minds of the leaders and
associates. A company's organizational culture is responsible for a company to sustain its
entrepreneurial spirit for decades. Walton's successors have been spending most of their time on
strengthening the culture, rather than trying to spread the culture themselves. Senior managers also
strive hard to keep the core values alive in the company. Walton has known to project Wal-Mart as the
embodiment of a more virtuous and earthly enterprise. Instead of technology, Walton preferred hard
work, steadfast loyalty as the key that has unlocked success for the corporation and the individuals who
labor within it. Wal-Mart has a culture of country, faith, and entrepreneurial achievement. It is one
thing to formulate a distinctive corporate culture, but it is quite another to preserve and reproduce that
set of ideological and organizational structures when Wal-Mart built stores and distribution centers
outside its home territory.
III. Explain how the four functions of management support the creation and maintenance of a healthy
organizational culture.
The four functions of management includes the following: (1) Planning is the foundation area of
management. It requires administration to assess; where the company is presently set and where it
would be in the upcoming. It is an unending course of action, sudden strategies where companies have
to face and sometimes they are uncontrollable. (2) Organizing which means getting prepared, getting
organized with all its resources well before in hand to put into practice the course of action to decide
that has been planned in the base function. Management ought to look at the different divisions or
departments, see the harmonization of staff, and try to find out the best way to handle the important
tasks and expenditure of information within the company. (3) Directing is the third function of
management and working under this function helps the management to control and supervise the
actions of the staff. It helps them to assist the staff in achieving the company's goals and also
accomplishing their personal or career goals which can be powered by motivation, communication,
department dynamics, and department leadership. (4) Controlling includes establishing performance
standards which are based on company's objectives. It involves evaluating and reporting of actual job
performance and in the effort of solving performance problems, management should higher standards,
they should speak to the employee or department having problem. With this management can make
out any probable problems and it helps them take necessary preventive measures against the
consequences and recognize any further developing problems that need corrective actions.
Wal-Mart has many different levels of management planning in place to follow through on its goals and
objectives. Many factors influence Wal-Mart's strategic, tactical, operational and contingency
planning. In Wal-Mart's strategic planning stage, they are highly regarded as visionaries and on thing
that Wal-Mart prides themselves is the fact that they develop their planning processes that enable the
company to understand where they want to go, how they want to get there, and the things they must
focus on along the way to drive the plan. Wal-Mart's drive to always make sure that they are first and
foremost a value driven company is one thing that has never lost focus. Wal-Mart continues to push the
value button by leveraging the size of the company to force vendors for better costs of goods which
enabled them to maintain its image as value driven. Part of Wal-Mart's tactical planning was to figure
out how to get customers to buy more once they were in the store. They came up with a solution that
would make sure that they improved the way that goods made it to store shelves so that the consumer
bought them.
In a challenging economy, the organizing function of the world's largest retailer benefited from low
prices and its moves to cut costs. Profits were also attributed to tighter inventory controls, which led to
fewer markdowns on merchandise. Wal-Mart has been successfully meeting one of its goals which were
keeping inventory growth at half the rate of its sales growth which it successfully met. The key was
overhauling its strategy. Instead of announcing any price increases to cope with the tough economy, the
company slashed its expansion plans and refocused on lower prices, improved the mix of merchandise
offered, cleaned up its stores and provided friendlier and faster customer service. However, there is
more to Wal-Mart's success than these. The secret to the company's success has long been attributed
to its strong culture which is responsible for a company of this magnitude to be able to sustain its
entrepreneurial spirit decade after decade.
The directing function of management at Wal-Mart is manifested in the creation of leaders that
constantly communicate with their associates for whatever problem especially when it pertains to job
related matters. They meet regularly and talk about ways to better improve job and tasks.
Organizations use control mechanisms 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 such as market control, manager audits, clan control, and performance
standards. Each control is important to prosper efficiently in the business world, increase customer,
employee and supplier assurance. Wal-Mart's success is motivated by these mechanisms that are
regulated and constantly evaluated.
Wal-Mart's culture of open door policy that allows their employees to be able to communicate with
supervisors freely is a kind of control that regulates their staff and which greatly helps in the smooth
functioning of the company.
IV. Recommended Strategies for Organizational Managers and Leaders
Leaders contribute much in shaping and molding of the values, assumptions and beliefs shared by the
members of the organization as they play key roles in ensuring that their programs' culture supports
good relationships that empower everyone to do his or her work.
For an organization to gain a good grasp of the potential of organizational culture, management should
pull together threads of knowledge from diverse areas. Managers and leaders should carefully examine
incentives and to align individuals with corporate strategy. Culture is greatly influenced by the
personalities of the top leaders and the way performance evaluation is handled. A company's culture
will affect its innovation capabilities and to spur teamwork and open flow of information. Assessment of
organizational culture to change work is complex but it helps in developing a focused, practical path to
culture fit to strategy.
Leaders and managers can establish systems and procedures that can help facilitate the effective and
smooth running of a company. They ensure that the rules are being adhered to at all times. They bear
the responsibility of inspiring people and encouraging them to produce meaningful changes in the
organization. Good leaders have the innate ability to articulate a vision and align their people's talents
and efforts of the company's direction and keep them focused on the set vision by motivating and
inspiring them. They can make sure that management plans are implemented and thoroughly evaluated
for continuous improvement.
http://www.wal-martchina.com/english/walmart/culture.htm
http://findarticles.com/p/articles/mi_hb3235/is_1_22/ai_n29154504
http://www.icmrindia.org/casestudies/catalogue/Business%20Strategy3/BSTA137.htm
http://globalisation-and-the-environment.blogspot.com/2008/10/wal-mart-and-environmentalspillovers.html
http://www.articleclick.com/Article/Strategies-That-Organizational-Managers-and-Leaders-Can-Use-toCreate-and-Maintain-a-Healthy/997166