Research Paper on "Organizational Behavior Wal-Mart Was Founded"

Research Paper 5 pages (1613 words) Sources: 5

[EXCERPT] . . . .

Organizational Behavior

Wal-Mart was founded in the middle of the 20th century, but it was not until the 21st century that it established its global dominance. Wal-Mart has an unparalleled reputation for the world's largest retail store, and accounted for $100 billion last year in its international sales (Herman, 2013). Such success overseas should not belittle the salience of its presence domestically. There are Wal-Marts located all across the country, with super stores and regular retail locations. Moreover, the retail giant sells just about everything one can imagine from ammunition to groceries, clothing to household items. Despite its international reputation, however, there are some telltale signs that the retailer's sales and presence is actually declining stateside. Wal-Mart's domestic sales pale in comparison to its international ones; approximately 60% of the company's growth came from overseas (Herman, 2013). Online retailers such as Amazon have drastically reduced the former reality that Wal-Mart had the least inexpensive prices; in the conventional bricks and mortar realm, stores such as the Dollar Tree and the Family Dollar Store oftentimes can best Wal-Mart in terms of prices (Denning, 2011). As a result, Wal-Mart management is experiencing a situation in which it must find some sort of way to regain its hold on the domestic market, and it must implement a multitude of strategies to effectively do so.

One of the firs things that management needs to do to help reclaim its domestic market standing is to revamp its reputation. Quite simply, the reason that Wal-Mart was a favored place to shop was due to its wide variety of selection -- which is unparalleled throughout the U.S. And the world, and not even remotely matched by Target -- and because its prices were inexpensive. That fact, as the following quotation indicates, has decidedly changed during the second decade of the 21st century.

Wal-Mart is losing business to rivals of different shapes and sizes. Customer traffic at U.S. stores has declined for five straight quarters. Meanwhile, sales have surged at discounters like Dollar Tree and Family Dollar Stores. A recent study by Wells Fargo [WFC] showed that those chains often charge less than Wal-Mart, though they carry a much smaller selection of items (Denning, 2011).

Therefore, it has become apparent that Wal-Mart is no longer the cheapest retailer, especially when one considers the fact that Amazon sells many of the same prices (for less money) that Wal-Mart does. The solution to correct this sales slump first of all, then, is to improve the retailer's public image. One of the most palpable ways that it can do this is by improving conditions and wages for its workers. Wal-Mart is generally reviled throughout the retail industry for the fact that it largely eschews unions. This business practice was one of the principle reasons that it gained a reputation for having inexpensive items, since because it paid its employees low wages it could afford to sell goods for lower prices than competitors who were paying more money.

However, Wal-Mart must recognize unions in order to gain a better public image. As the aforementioned paragraph indicates, it has already lost its reputation as the leader in prices. Thus, it stands to reason that it should gain a reputation for treating its employees better. Wal-Mart's obstinacy in recognizing unions should not be underestimated. There was an instance last decade in which representatives form one of its locations voted for "collective representation" (Jones, 2010) and the organization chose to shut down that particular location, rather than entertain any form of dealing with employees that might even closely resemble a union. However, after claims of ungainly working conditions and wages averaging a mere amount of pennies an hour in certain overseas market, Wal-Mart has begun to recognize unions internationally in areas of South America and Asia. It could gain an advantage with its North American clientele by following suit. Although doing so might temporarily cease its global expansion, it would enable it to assist its locations it currently has in the United States.

It is important to examine the value that Wal-Mart could produce in its domestic market by working with unions and increasing the general working conditions of its employees. Doing so would more than likely enable those employees to deliver better customer service, an area in which Wal-Mart traditionally has been lacking. By presenting customers with better service, Wal-Mart could directly improve its reputation in the U.S., which in turn would assist in increasing its business here. In February of 2013, the retail conglomerate revealed less than staggering figures in its U.S. sales. A report in the Wall Street Journal described the sales for that month as "woeful" (Karlgaard, 2013), heralding the fact that the retailer needs to take drastic action to increase its sales activity. By recognizing unions and making a concerted effort to treat employees, and by extension customers better, Wal-Mart will be able to revamp its reputation and perhaps fuel customer spending some more. '

Ultimately, however, it appears as though Wal-Mart is headed to a drastic choice in its business model that upper-level management needs to address. It is one of the foremost champions of globalization, as the fact that it has approximately 5,000 around the world readily indicates. It has been able to continue expanding largely due to the fact that it was not paying its workers' wages comparable at other retail stores, which enabled it to charge substantially lower prices. However, due to the fact that it is no longer a leader in prices, it must make a decision as to whether or not it is beneficial for it to continue expanding globally while its domestic market slips away, or if it more advantageous to curb its global expansion, focus on the locations it has already established, and increase its brand and reputation in the process by delivering exceptional customer service and treating its employees accordingly.

The company's recent activity, however, largely alludes to the fact that it is aware of its poor reputation throughout the U.S. And the globe, and that it is attempting to rectify this situation. In May, the Wall Street Journal revealed that the company had invested in a television advertising campaign in an effort to retain customers. According to the article,

Ads highlight job opportunities at Wal-Mart, as well as the company's efforts to sell more fresh food. They feature footage of the company's massive distribution centers and 53-foot rigs to tell the story of how Wal-Mart gets goods to customers at low prices. (Banjo, 2013)

Such an approach is one that is definitely assisting in ameliorating the relationship that Wal-Mart has curated with the general public in recent years. The company also needs to shift its attention from its customers to its employees, who are the ones who interact with the former on a first-hand basis. Improved customer relations between employees and consumers would ultimately negate the need for expensive advertising campaigns.

In terms of deciding whether to focus its efforts on its established domestic base or to further international expansion, the aforementioned public relations campaign implies that the organization is focused on the latter. Such a move is certainly prudent with recent headlines this spring alluding to the organization's mistreatment of employees and even federal governments in its global operations. There was a fire in Bangladesh (in which a number of workers died) that was linked to Wal-Mart's international outsourcing in the latter half of 2012. More recently, allegations have arose that the company took part in bribing federal officials in Mexico in order to maintain its pace of global expansion in that particular country. Clearly, Wal-Mart's international reputation is no better than its domestic one -- despite its overseas sales. It is also fairly clear that these and other international fiascos have resulted from the company's attempts to continue… READ MORE

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