Any organization has many objectives that it endeavours to fulfil. The company’s primary goal is to increase profits. The company must perform specific tasks in order to achieve the defined targets. As a consequence, in organisations, workers, managers, and stakeholders are important. However, in order to realise the set objectives, they must organise and cooperate. Therefore, to direct the strategies and execution of duties, organisational design is necessary. A organisational design requires a step-by-step protocol that defines outdated workflows, frameworks, processes, and systems, realigns them to achieve business goals, and develops new strategies to incorporate the modifications (Puranam & Maciejovsky, 2017). For the design to be implemented, an organization structure which entails a system that outlines hierarchy within an organization is required. It identifies every job, its mandate, and the reporting destination within the organization. Finally, organization culture consists of the beliefs and values held by the organization (McNamara, C., 2000). It cements a unique psychological and social environment within the company. This paper explores Walmart’s organizational structure and culture, as it is one of the world’s successful companies.
Formal Walmart Structure
Walmart utilizes a hierarchical functional organizational structure. This organizational structure facilitates its business activities within the USA and around the world. The activities are concentrated in the retail industry. The CEO is the most influential person in the management hierarchy. Therefore, every employee has a superior except the CEO. Its ranking is based on command and functions lines, the line of command outline powers and reporting destinations of every employee. Directives come from top-level management. Middle-Level Management takes the message and implements them by giving orders to various employee ranks below them. The structure is appropriate as it enables Walmart to make decisions quickly throughout its distribution stores (Mayer & Noiseux, 2015). On the other hand, the functional-based element entails grouping workers to execute a particular mandate. Walmart has various departments like human resource department and technology department, to name a few.
Walmart’s Hierarchical Functional Organizational Structure
As illustrated, the command emanates from the CEO to regional managers. The local managers will pass it to the store managers. The store managers will pass instructions to departmental managers who will give directives to employees. The employees will report to departmental managers, and the reporting protocol continues upwards.
Walmart’s Organizational Culture
The company’s organizational culture has the following four components;
- Serving customers
- Respecting all individuals
- Striving for excellence
The priority of the organization is to satisfy the desires of the customers from all over the world. It also respects all its workers as it is their effort that has made it succeed. It also believes in hard work for excellence; hence, it always keeps striving to shine regardless of its previous excellent performance (“Strategic Management of Walmart,” 2018). Lastly, it believes in integrity through the promotion of ethical values like fairness and honesty.
Division of Work, Coordination, and Control
Related activities are grouped to form departments. The command is vertical as instructions emanate from the top and flow downwards. The overall positive effect is that the structure can coordinate management and enhance the execution of duties regardless of the vastness of its operation. For instance, if new policies are designed at the main Headquarters, the CEO will pass them to regional managers, and they will be passed down to the store managers. The employees will then be directed to implement the same. The decision making is centralized as decisions and policies are devised by the top management. The structure is more mechanistic as it has many components that formally relate. The procedures and instructions are communicated from above, and all employees have a superior to get instructions from and report to.
The Informal Structure of Walmart
Walmart highly focuses on the formal relationship among its workers within the organization. The minimal informal structure exists. While workers are free to interact freely through trips and sporting events, they are highly formalized within the organization. The work is done based on employees taking instructions from their superiors and reporting directly to them.
Differentiation and Integration
Differentiation entails the separation of an organization into distinctive elements like departments or specific products it offers for its operations’ efficiency. On the other hand, integration involves coordinating the organization components like interdepartmental coalitions (Cameron, E. & Green, M.,2009). Walmart departments are function-based. For example, the human resource department deals with recruitments and human resource-related issues. To facilitate coordination among the departments, the company shares information to ensure that associated departments are reading from the same page.
Strengths of Walmart’s Organization Design
The first advantage of this organizational design is that it eliminates bureaucracy. Lengthy procedures, discussions, and negotiations are avoided as the instructions from the above must be followed. If all management levels were given power, they might oppose or alter directives making the process complicated and lengthy. Second, quick decision making and implementation are realized. A message from the CEO can be communicated and implemented in all stores within a short period. Last but not least, the employees know who to report to in case of any problem directly. Obedience and efficiency are enhanced as the source of instructions are outlined as well as the reporting destinations (“Strategic Management of Walmart,” 2018).
Weaknesses of Walmart’s Organizational Design
The first weakness of this organization is the minimal involvement of employees in the decision-making process. Commands and instructions come from above, and the junior managers and workers are required to obey and execute them. It will be difficult for employee opinions to get to the top management. This may reduce the productivity of workers. When workers are involved in the decision-making process, they feel appreciated. They will take decisions as they own; hence, they will work hard executing them. Secondly, it creates room for exploitation and overworking.
Last but not least, there is room for errors and mistakes that may affect the whole organization. Commands from above must be obeyed even if they are wrong. In democratic leadership, other members may vote against some decision; hence, reckless actions get mitigated.
Improving Walmart’s Organizational Design
To a large extent, Walmart’s organizational structure is good, considering its business activities and global operations. Further, the design has propelled its continuous growth for many years. The structure design can maintain managerial control regardless of its international services and retail vastness. However, it must improve its culture to address employees’ concerns like low pay, which it frequently gets criticized. It implies that respect for individual belief is not respected. Therefore, it should come up with measures to fulfil respect for the different elements of its culture.
- Cameron, E. & Green, M. (2009) How Organizations Work. Making Sense of Change Management: A Complete Guide to the Models, Tools, & Techniques of Organizational Change 2ndEd. (pp. 98-108). London and Philadelphia: Kogan Page. http://www.bms.lk/download/GDM_Tutorials/ebooks/Making_Sense_of_Change_Management.pdf
- Mayer, S., & Noiseux, Y. (2015). Organizing at Walmart: Lessons from Quebec’s Women. Global Labour Journal, 6(1). doi: 10.15173/glj. v6i1.2455
- Puranam, P., & Maciejovsky, B. (2017). Organizational Structure and Organizational Learning. SSRN Electronic Journal. doi: 10.2139/ssrn.2963250
- Strategic Management of Walmart. (2018). Research Journal of Social Sciences. doi: 10.22587/rjss.2018.11.1.6