Posted: April 4th, 2015

Fundamental management

Organizational Structure Paper – Wal-Mart

Geographic design

Wal-Mart is one of the world largest retailers. The company is incorporated in the United States of America and also operates international outlets in a number of countries worldwide. It is one of the largest employer in the world through it numerous facilities in the United States and other nations. The history of Wal-Mart dates back in early 1960s when the discount retail industry had started picking up. In 1962, Sam Walton risked all is property to secure finances to start-up a new venture in the discounts retail industry. In the same year three other discounts retail stores commenced there operation. These stores included Kmart, Target, and F.W. Woolworth (Wal-Mart, 2012).

Functional design

The store offers products from clothes to groceries to car accessories and cell phone services. The organization has diversified its operations to sell almost every thing that can be offered and the store is regarded as a one stop and shop kind of store. The shop mostly offers discount on all products and this has been the cutting edge to remain competitive and attract more customers who help to keep the sales of the company ever high. Wal-Mart’s organizational structure has been well diversified and this has led to its success over the years when compared to its competitors (Wal-Mart, 2012).

Customer-based design

Wal-Mart operates in discount retailing industry in the United States of America. The discount retailing industry in the United States of America has evolved tremendously over the last half century. The periods before 1950s was characterized by departmental stores that sold a wide variety of general merchandize. Customers were never allowed to pick products by themselves from the shelves but rather sale clerks served them directly over the customer. Discount traders started emerging in 1950s were characterized by low commodity prices, less credit to customers, and low return privileges. The retail stores during these early stages were categorized into general and specialty chains. Specialty chains mostly dealt with narrow product lines such as sporting and office products. General Chain carried a wide assortment of product range. Discount stores enjoyed much success due to low prices and their emphasis on customer convenience, value, and quality (Wal-Mart, 2012).

Product design

The store offers products from clothes to groceries to car accessories and cell phone services. The organization has diversified its operations to sell almost every thing that can be offered and the store is regarded as a one stop and shop kind of store. The shop mostly offers discount on all products and this has been the cutting edge to remain competitive and attract more customers who help to keep the sales of the company ever high (Daft, 2010).

Service design

The store has diversified its operations to include services in its operations. Wal-Mart has been able to offer cell phone services and event motor vehicle management for example oil and tyre change at a fee. These services have helped to increase the sales of the organization over the years (Hill & Jones, 2013).

Hybrid design

The store management has over the years tried to sell the brand name to over seas countries and this has facilitated the growth of the organization not only in the American market but on the international market too (Daft, 2010).

Matrix design

The organization structure of Wal-Mart is headed by a board of directors who govern and set the business strategy for the multi national organization. The board is formed of a 15 member committee who are responsible for the control and governance of the organization world wide. The management team is hierarchical in nature with a top management then a middle management and finally a low management team. The head of the organization is Sam Walton while the CEO is Mike Duke who both chairs the organization to reach high levels in business (Hill & Jones, 2013).

Marketing channels

Wal-Mart store’s Sam Walton issued Wal-Mart shares to the public and this enabled the business stock offerings to increase in value from $1,650 to over $3,000,000 in early 1990s. Additionally, the store decided to build its own warehouse to enable purchase of voluminous merchandize at attractive prices. This reduced costs considerably. By the year 1985, the stores had expanded and increased its stores from 32 in 1970s to 859. In the year between 1985 and 1990s Wal-Mart had expanded from small towns in the South had had strong presence throughout big cities and towns in the United States of America. In late 1990s and early 2000s, Wal-Mart was the leading discount retailers in the United States of America. During this period, Wal-Mart reduced the number of stores by converting them to supercenters which increased by almost six times to an approximate of 2,843 stores by the year 2006. At the same time Wal-Mart also operated 607 Sam’s Clubs by the year 2010 (Wal-Mart, 2012).

Wal-Mart organizational structure

The history of Wal-Mart dates back in early 1960s when the discount retail industry had started picking up. In 1962, Sam Walton risked all is property to secure finances to start-up a new venture in the discounts retail industry. In the same year three other discounts retail stores commenced there operation. These stores included Kmart, Target, and F.W. Woolworth (Wal-Mart, 2012). The first Wal-Mart was started in Rodgers, Arkansas and seemed less likely to succeed as compared to the other discount retail stores. Aware that the business was bound to face stiff competition from new entrants in the industry, Sam sought to expand and growth Wal-Mart as quick as possible to size up the available opportunities. For this reason Wal-Mart expanded to other towns such as Oklahoma, Missouri, and Kansas. By the year 1967, Wal-Mart had 19 stores and sales of $9 millions. Kmart, the industry leader, had 290 stores and a sales volume of $800 million in the same period (Wal-Mart, 2012). Nowadays Wal-Mart has over 8500 stores and operates in more than 55 countries by employs over 1.4 million people. The store offers products from clothes to groceries to car accessories and cell phone services. The organization has diversified its operations to sell almost every thing that can be offered and the store is regarded as a one stop and shop kind of store. The shop mostly offers discount on all products and this has been the cutting edge to remain competitive and attract more customers who help to keep the sales of the company ever high. Wal-Mart’s organizational structure has been well diversified and this has led to its success over the years when compared to its competitors. The growing organization can attribute its success to its well managed and focused management team who comprises of directors appointed by the board. The organization has managed to stay on top by making extremely high returns from its sales of diversified products and services to its loyal customers. The company marketing strategy has been instrumental in generating a large amount of revenue which is in turn used for its growth projects. The company yearly is able to expand its market and open up new stores all over the world (Daft, 2010).

The organization structure of Wal-Mart is headed by a board of directors who govern and set the business strategy for the multi national organization. The board is formed of a 15 member committee who are responsible for the control and governance of the organization world wide. The management team is hierarchical in nature with a top management then a middle management and finally a low management team. The head of the organization is Sam Walton while the CEO is Mike Duke who both chairs the organization to reach high levels in business. The directors have a duty to manage the whole enterprise including Target store and Kmart store. The management team can delegate their work to the middle level management who are also professionals and carry out their work diligently without fail. The management team has been instrumental in guarding the operations of the organization and make sure it’s able to remain the top most successive store in the world. Power and responsibility has been well distributed across the management team starting from the top to the bottom level form of management. Both Kmart and Target have vertical structure with a board of director to manage the enterprise. The two stores’ corporate strategy is well communicated to the lowest level employee as communication in an organization is crucial for decision making. The culture of Wal-Mart has been followed and accepted by all and its can be defined to offer and provide high quality and well designed goods and service that will satisfy their customers fully. The theme of the company is to provide a one of a kind experience that comes from all the department of the stores (Hill & Jones, 2013).

The organizational structure of Wal-Mart can be explained as a divisional structure due to its separate units of governance which are divided into semi-autonomous divisions that work under one organization head who ids the chairperson of the multi-national organization. Wal-Mart is divided into several autonomous divisions like Wal-Mart international, Wal-Mart Realty and supercenters and not forgetting Sam’s Clubs. Each manager has the responsibility to oversee the management of each division and is answerable for its success or failure. Thus each manager should have excellent leadership and management skill to run the big enterprise and focus on its operations. The boards of directors at the top management are always concerned by the services the whole organization offers to its client and the willingness of its employees to protect its culture as being the best in the business (Daft, 2010).