General Management Issues
For any business organization to succeed, it is vital that it establishes a robust framework for its corporate governance. Therefore, the creation of the “Wal-Mart Board” proves to be one of the essential assets that the company possesses (Cobb, 2014). The asset is strategically vital in oversight provision, governance, shared value delivery, and ensuring that the company operates according to the laid mission and vision. As the manager of HRM Department, I am quite aware that the company’s board meet five to six times every fiscal year to review developments and issues that would most likely affect the operations of the company, act in matters of approval, as well as taking part in processes of strategic planning (Brunn, 2016).
The leadership framework of Wal-Mart has three main categories, the CEO, Chairman, as well as the Lead Independent Director. The work of the chairman is to provide oversight for the board. Other related duties may, however, include presiding and governing meetings carried out by shareholders and the board as well as counseling the CEO and managers on how to appropriately handle business operations (Bruton, 2012). On the other hand, the Lead Independent Director is charged with performing board evaluations annually, reviewing business agendas, as well as presiding over business meetings among others. The most suitable candidate for this position is elected every year by directors that are independent of the board. On the other hand, there is the CEO who leads the company into performing every business operation. The duties of CEO comply with general management responsibilities such as supervision and execution of sales and marketing tasks. All the same, the board is composed of seven committees including:
- The Audit Committee
- CMDC (Compensation and Management Development Committee)
- The Executive Committee
- The Global Compensation Committee
- The Governance and Nominating Committee
- The Finance and Strategic Planning Committee; as well as
- e-Commerce and Technology Committee
As recommended by the New York Stock Exchange body, most of the Wal-Mart’s directors are independent workers. Therefore, as listed in New York Stock Exchange body’s provisions, management exceptions are provided to “controlled organizations,” Wal-Mart will not rely on such exemptions because it is confident that with most of its board members being independent, a long-term shareholder interest is promoted (Coffman, Freire, Heaver and Soltis, 2012). The governance and strategic oversight, for instance, ensure that the board gets entrusted with matters that are sensitive to the company. All the committees highlighted above are chaired by directors that are independent. Such is because the committees are vital components in the overall operation of the company (Bustillo, 2011). Therefore, every committee is given access to authority and mandate to choose and retain independent consultants and advisors.
On the other hand, Wal-Mart’s committees are ruled by principles or a scribbled charter with outlined roles for every position in the company. The Governance and Nominating Committee, for instance, is charged with the provision of guidance and oversight to the entire corporation. The committee also defines the environment in which Wal-Mart operates including the governance and social aspects of such environment (Conor, 2014).
Many global research activities have noted that business organizations face a lot of issues regarding their business operations. Such management hurdles result from factors like technology, globalization, shifting or changing demographics among other social trends. As a result, the needs of clients are slowly getting reshaped while competition stiffens. Therefore, Wal-Mart has realized that having a diverse board and operational team is a crucial functional factor that would encourage success. Apart from that, the company will also be in the sole position of providing its customers with quality goods and services. As the HRM Department manager, I believe that delivering high-performance starts with management efficiency. Such would also lead to improving business performance as well as the engaged associate base. Therefore, Wal-Mart ensures that its shareholders are provided with an opportunity of choosing, annually, independent directors who will oversee the general performance of the corporation (Euromonitor, 2014).
Structure of leadership
Wal-Mart is also different from other corporations in the sense that it has a Corporate Governance Guidelines. The Corporate Governance Guidelines has policies and principles of governance. For instance, it is evident in the Corporate Governance Guidelines that independent directors are given a term limit of 12 months. With the Corporate Governance Guidelines, the board is confident that the framework will provide and improve the levels of discipline in the processes of board refreshment (Gangar, 2013). Every policy, structure, or strategy put in place to guide Wal-Mart in its operations also ensure that the corporation achieves an expertise mix regarding business development, sustainability achievement, development of human capital; and technological advancement. All the same, the result of expertise mix will also help the company in improving its brand throng proper marketing and management as well as improve the finances and reporting capability (Fanno, 2012).
Wal-Mart will be able to achieve a balance in its age, tenure, racial, and gender composition within the workforce if it adopts new, diverse cultural perspectives. As a result, the company ensured that the board members conform to the gender disparity ratio by having 25% women and 40% men all under fifty years of age. Apart from that, Wal-Mart decided to appoint a woman by the name Sarah Friar, Square Inc’s chief financial officer as one of its new independent directors and a member of the board. In the history of the company, Friar is considered as the 12th woman to be a member of the board. She would also take part in significant issues in the Board’s Finance and Strategic Planning as well as the Audit Committee. Her appointment was gender disparity fulfilling because the board believes that a woman with her skills would introduce a fresh set of skills and perspectives to the corporation. Such decision was also reached for because the committee felt that the company required strong expertise in the fields of operations, finance, technology, and strategy. Finally, yet importantly, the corporation is committed to ensuring that it achieves total inclusion beyond the board as well as a commitment by every stakeholder.
The pricing strategy of Wal-Mart merely is “to generate value for customer’s hard earned money.” Therefore, ensuring that prices are as low as possible is the reason why Wal-Mart’s competition is clobbered. Apart from that, the rates are as little as possible because the sales team ensures that certain products are sold at low prices while workers provide that they manage controllable expenses. Otherwise, this is a strategy that allows the corporation to sell particular goods at most economical prices leaving workers with one job, to ensure that they undertake processes that hold such costs low. Besides, employees are also capable of reinforcing social values all by themselves (Ghosh, 2014). When prices are low, inventory turnover is driven that alternatively, reduces overall costs. With this strategy in place, competitors are losing their calm. They also wonder how Wal-Mart keeps its prices that low. Each time that the corporation is successful in having its expenses lowered, it is because savings are passed to customers in the form of reduced prices. By doing so, more pressure is heaped on the competitors (Faulkner and Bowman, 2015).
The composition of the Board
Wal-Mart has more than 8400 stores that offer approximately 300 000 products. Apart from that, the company is involved in several operations including distribution, IT, as well as a supply chain that are vital in the maintenance of profitability. From a personal perspective, Wal-Mart is best considered as a supply chain driven corporation with retail stores as well. However, by critically observing the company from an operational risk angle, it is clear that if the company did not have stakeholders with the skills of proper functional executions, the corporation would fail most probably (Flannery, 2016).
The main reason why this activity chooses to use Wal-Mart as a case study is that it has the best operational practices at the store level, in its supply chain, as well as its distribution. The reason why Wal-Mart has been a success, and many research activities benchmark the corporation is because of its proper supply chain. Apart from that, it was mentioned before that the corporation’s workers put a lot of effort into ensuring that operations are successful. Another essential factor to consider is the fact that Wal-Mart has a massive IT infrastructure which works for hand in hand with the efforts of workers to ensure that customers receive the best services ever. Therefore, under this strategy, the HR in conjunction with functional managers works tirelessly to enforce scorecards and performance standards towards the measurement of every expense and sales management metrics. To wrap it up, the company’s HR department invests its time, effort, and energy towards training and orientation workers on the benefits of ethical executions (Ferrell and Hartline, 2012).
Immediately managers are employed, the corporation offers them training and orientation on the culture of the company. Such adjustment must include working in one of the stores providing services to clients. Afterward, newly appointed managers undergo a week of training on the culture of the organization. The HR must ensure that employed managers go through rigorous cultural practice, so they acclimate to the manner in which Wal-Mart performs its operations. Indoctrination of culture is vital in ensuring that the corporation meets world management processes. With a company as large as Wal-Mart, the workforce and culture of the organization are crucial in ensuring that the standards of the organization are maintained (Colbert, Judge, Choi and Wang, 2014, pg. 681).
There are many leadership styles that Wal-Mart employ to ensure overall organizational success. Providing that leadership is successful requires inspiration, support, as well as confidence among the stakeholders to ensure that organizational goals are achieved (Chan and Maubourgne, 2012, pg. 126).
Wal-Mart Corporation encourages visionary leadership in all its operational levels. Any leader who is visionary has to be capable of interpreting the reality surrounding the organization in which he or she leads and then transforms the organization to achieve sustainability goals. Therefore, Wal-Mart has consistently urged its managers to use this style of leadership so that they can help the organization make its vision of provision of low priced products (Bysani, 2013).
As mentioned before, Wal-Mart is different from other corporations in the sense that it has a Corporate Governance Guidelines. It was suggested that the Corporate Governance Guidelines has policies and principles of governance that require visionary leadership to deploy (Cambridge Dictionaries, 2014). With the Corporate Governance Guidelines, a component established from the visions of the company, Wal-Mart is confident that the framework will provide and improve the levels of discipline in the processes of board refreshment. Every policy, context, or strategy put in place to guide Wal-Mart in its operations also ensure that the corporation achieves an expertise mix regarding business development, sustainability achievement, development of human capital; and technological advancement associated with proper, visionary leadership. Otherwise, visionary leadership is essential in the provision of a sense of direction and motivation of employees. Managers would then be encouraged to find appropriate ways of saving money and passing the same to customers (Bustillo, 2011).
Role of Corporate Governance and Risk Management
This style of leadership is what makes management in Wal-Mart appear as it is. In other words, this is the style of leadership at the core of Wal-Mart’s management. Therefore, the company recognizes that transformational leaders need to have four factors to ensure organizational success. The founder of Wal-Mart, Mr. Walton, was a good leader in himself. He had idealized influence, and in turn, he gained control and trust. Afterward, he became inspired and motivated enough to start Wal-Mart (Brea-Solís, Casadesus-Masanell, and Grifell-Tatjé, 2012). Therefore, the company believes that employee motivation and commitment to vision is the only way to keep going even if the company faces hurdles such as a recession.
All in all, this leadership style also requires individuals to be intellectually stimulated to ensure creativity and innovation is encouraged in the organization. As mentioned before, when Wal-Mart recruits its managers, it offers them training and orientation on the culture of the company. Such adjustment must include working in one of the stores providing services to clients. Afterward, newly appointed managers undergo a week of training on the culture of the organization. The HR has to ensure that employed managers go through rigorous cultural practice, so they acclimate to the manner in which Wal-Mart performs its operations. Indoctrination of culture is vital in ensuring that the corporation meets world management processes. All the same, when managers finish their training processes, they are required to be stimulated towards encouraging innovation and challenging themselves to perform even better (Belcher, 2009).
There are, however, two issues that Wal-Mart is working extra hard to improve. One is social responsibility while the other is its ethical reputation. With regards to the same, the company decided to create an office known as the “Global Ethics Office” with an Ethics Statement. This global office is to develop means and strategies through which the corporation spreads its ethical corporate culture that its global stakeholders would be part (Chandran, 2013).
On top of that, the company has created a social and ethical standards team to have suppliers’ compliance monitored. To meet such goals, the organization has interviewed more than 2,000 marketing personnel in several nations to gauge their views on ethical marketing conditions. In response to the same, it was clear that several organizations were caught in marketing bribery scandals. As a result, Wal-Mart completely overhauled is marketing programs to enforce “no bribery” campaigns and policies. By doing so, its sales and marketing processes would be just and fair (Basu, 2010).
On the other hand, there is the CEO who leads the company into performing every business operation. The CEO also has to comply with general management responsibilities like supervision and execution of sales and marketing tasks as well as ensuring that workers are treated fairly while customers receive services justly. Finally, yet importantly, the company has been associated with several societal management programs such as contributing towards establishing projects for disaster management and women’s economic empowerment. The corporation gave out close to $3 million to cater for those who suffered from occurrences of natural disasters like Hurricane Sandy. This money provided clothing and food for the victims (ACSI, 2014). Otherwise, the moral sanity of such management positions and processes is that fairness is greatly considered when a suitable candidate for this position is elected by directors that are independent of the board.
Wal-Mart Corporation made a couple of changes in its management systems to encounter risks fully. As mentioned before, a new framework of control has been imposed in which three main categories, apart from ordinary managers and project compliance teams have been given more power and mandate (Articadv, 2014). As a result, the company will entirely be able to:
As highlighted before, one of the most significant strategies in fighting market price lapses is the pricing strategy adopted by Wal-Mart. The approach allows the corporation to sell particular goods at most economical prices leaving workers with one job, to ensure that they undertake processes that hold such costs low. Besides, employees are also capable of reinforcing social values all by themselves (Ghosh, 2014). When prices are low, inventory turnover is driven that alternatively, reduces overall costs. With this strategy in place, competitors are losing their calm. As mentioned earlier on, by doing so, more pressure is heaped on the competitors (Faulkner and Bowman, 2015).
Absolute management of workers and other stakeholders is vital because Wal-Mart has several stores with thousands of products made available for customers. Since stakeholder management concerns are the most challenging and directly attached to organizational success, Wal-Mart ensures that it involves stakeholders in all management operations including distribution, IT, as well as a supply chain that are vital in the maintenance of profitability (Ferrell and Hartline, 2012). It comes without saying, therefore, that Wal-Mart is the best supply chain driven corporation because of how it manages its stakeholders (Flannery, 2016).
Wal-Mart believes that innovation, commitment to productivity, proper and ethical relationships between stakeholders, as well as trust and loyalty, are some of the attributes associated with good work culture. Therefore, teaching a good work culture in the business environment is best likely to encourage organizational growth and reduce the risks of employee detachment and negative attitudes. Thus, fostering such corporate culture requires good governance. The HR must then ensure that employed managers go through rigorous cultural practice, so they acclimate to the manner in which Wal-Mart performs its operations. With a company as large as Wal-Mart, the workforce and culture of the organization are crucial in ensuring that the standards of the organization are maintained (Colbert, Judge, Choi and Wang, 2014, pg. 681).
Reference
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