¶ … mission of the organization?
Sam Walton -- founder of Wal-Mart -- demanded that expense be kept to a bare minimum. His belief was that you offer the lowest prices possible and volume. Wal-Mart's focus is on chipping prices, be this with the goods they sell, or the way they run the store including their notorious low wages, frugal corporate cultures, and push to make suppliers sell items at increasingly cheaper prices.
Wal-Mart's driving goal is to keep retail prices low, and everything - including technology and corporate culture -- work towards frugality. To that end, Wal-Mart's suppliers are pushed to cut prices as low as possible. In "The Wal-Mart effect," author Charles Funishman describes how a four-pack of GE light bulbs decreased from $2.19 to 88 cents, and how Wal-Mart buyers demand that suppliers either lower the price or increase quality every year on every item. Wal-Mart's philosophy is "plus one"
It aims to be a discount stores that offers its consumers everything from nails to food and beyond -- everything that one can possibly need -- under one roof at the lowest price (David & Graces, 2009).
As WalMart itself writes its mission to be: "Save money. Live better." That is its credo.
What are the external and internal issues facing the organization?
The external issues are certainly Wal-Mart's notorious reputation for its labor relations and the contemporary social trend that is disturbed by such treatment. One of the world's largest and most successful corporations, Wal-Mart is exemplary of all that is considered worst of capitalism: greed, poor ethics, selfishness, non-Christian self-centered focus on me as one and charity as last and poor worker treatment. Criticized for its exploitation of workers, as well as for its resistance of union organizations and campaigning, Wal-Mart has been boycotted by some and criticized by many.
Wal-Mart is notorious for its frugal culture including paying meager wages to its employees and providing stingy health-care plans. Store managers are expected to work overtime without pay, and often work more than 70 hours per week. The stores are under heated in winter and go tight on their air-conditioning in summer. Wal-Mart is headquartered in a cheap, rather than expensive city like New York. Its headquarters is drab; their executives are expected to go frugal on personal and store expenses. Their executives work long hours, arriving at work before 6.30and working half-days on Saturdays.
Wage abuse, sex discrimination, and anti-unionism are just three of the allegations that Wal-Mart faces. Women comprise a high 70% of their organization, but they are mostly in sub-clerical roles, and all of Wal-Mart's employees without exception suffer from miserly work conditions and below-standard treatment. Their treatment of their employees consequents in diminished market share with the impression of a cheaper environment and more common, dissatisfied staff (whether true or not) when, for instance, compared with Target whose polished interior and seemingly more sophisticated impression as well as content staff gives Target the appearance of being a chain of slightly higher quality and retail appeal. Poor pay, whilst helpful in certain aspects, lowers the shopping experience fro consumers who may find employees not only under-motivated but also rude and uncouth. Wal-Mart's competitiveness, therefore, may inadvertently benefit from customer dropout despite Wal-Mart's bargain-basement prices.
Cited as an external problem, Wal-Mart's poor labor relations may well be considered an internal problem too, since research consistently shows that comparable retail giants have demonstrated that better work benefits, fairer wages, encouragement of social interaction amongst employees and some level of personal autonomy all contribute to a more versatile and competent employee. As we will see with Branson later, it was all of these elements that led to the success of his company.
Low wages can also lead to high employee turnover, never good for any company least of all for a corporation that has to always expend money in recruiting, attracting and training new staff (Patterson & Biagi, 20030.
What is the vision for the next five years?
Wal-Mart's goals for the future, as specified by the company's chief executive, Lee Scott, are to: (1) make the company a better place to work; (b) improve the shopping experience, particularly for women, and (c) be more aggressive in buying merchandise.
In practical terms, and as specified by Mike Duke, CEO of Wal-Mart Stores Division, practical visions for change that involve better customer service are staffing the checkout lines better in order to cut down on lines. Attention too will be turned on the customer "who is willing to pay for...
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