Wal-Mart, the World’s Largest Retail Corporation
Write about the Wal-Mart Internal Rules for Chinese Company Law.
In the modern business environment, companies are required to develop internal rules that will ensure that the company meets the corporate standards in the local and global business environment. The success of a company has been associated development of comprehensive internal rules that will govern its people and operations within the company. Company’s internal rules are acknowledged as a source corporate laws that govern labor issues (Gu, 2010). The entails labor that binds only within the specific place of employment within the company. The internal rules in a company fulfill an important role, which allows the company to influence and shape certain employment elements autonomously-even otherwise than in the act of law. Furthermore, in practice, some categories of company’s internal rules or acts have been deemed obligatory by the legislator (Hamilton, 2008). Therefore, with effective internal rules the company can adequately manage its operations, especially its people effectively.
Wal-Mart is a company that developed internal rules that has seen the company succeed in its business in the last few decades. Additionally, every business unit that Wal-Mart is expected to have a compete set of policies that provides guidance for its people to promote business integrity (Loeb, 2014). The since its establishment has forever ensured that it has developed effective internal controls through rules to guide its business and make its successful. The paper will critically examine Wal-Mart’s corporate structure and inter rules that its uses in its business.
Wal-Mart is US-based multinational retail corporation, which operates chain stores across the world. Wal-Mart was founded in 1962 by Sam Walton where it was operated on a basis of serving clients at “lowest prices anytime, anywhere”. The company has more than 11,700 stores and clubs in 28 nations and operates in under 59 diverse brand names. The corporation is the global largest firm in revenues of around $486 billion based on the Fortune Global 500 list in 2017. The company is also the biggest private employer globally with more than 2.3 million workers (Trumka, 2012). The company quotes low prices as its business strategy that has continued to boost the company’s success in the global marketplace. With the current strategies, Wal-Mart will continue to dominate the retail industry with its groundbreaking products and services that has been boosted by the use of sophisticated technologies in serving its clients (Loeb, 2014).
Wal-Mart’s Hierarchical Functional Organizational Structure
Wal-Mart has adopted a hierarchical functional organizational structure to enable it meets its business operations across the world. The hierarchy feature of the structure pertains to the vertical lines of authority along with authority all through the organizational structure. Thus, the structure ensure that the directives besides mandates emanating from top level management of the company are executed via middle executives downward to the rank-and-file workers in the company’s stores. Contrarily, the function-based attribute of the firm’s organizational structure entails groups of workers satisfying particular roles that cover different departments (Csaszar, 2013). The primary impact of Wal-Mart’s hierarchical functional structure is the capability of business executives to effortlessly influence the whole company. For instance, novel policies along with strategies designed at Wal-Mart’s corporate headquarters are directly diffused to regional managers then down to store managers. As a result, efficient monitoring and control are attains through the company’s organizational structure (Csaszar, 2012).
The internal policies have been known to play a leading role towards acting as internal controls for effective management in a company. Wal-Mart through its leadership has developed internal rules through its policies that govern its people and operations. These policies have been designed by the company to promote integrity of the company and ensure that ethics are promoted within the workplace by the employees (Hamilton, 2008). These rules have been recognized by the company as a source corporate laws that govern labor issues that ensures that the company meets its everyday obligations. Wal-Mart internal rules are designed to promote and encourage compliance within the business towards maintains the highest ethics (Mäntysaari, 2005). The following are some internal rules that Wal-Mart has put in place to promote ethical workplace:
Wal-Mart has strict rules that govern issues related to discrimination and harassment in the workplace. The values that were entrenched by Walton as the founder has become important rules that govern the workplace from cases of discrimination and harassment, especially among the employees who are internal stakeholders of Wal-Mart (Barbaro, 2007). The discrimination and harassment rules have been designed to promote a culture of respect, as well as trust, which will boosts a positive work environment. Through these rules, Wal-Mart prohibits discrimination in employment, employment-associated choices or in business transactions on the foundation of individual’s race, gender, religion, marital status, ethnicity, disability, pregnancy status among other grounds. Furthermore, harassment in workplace whether welcome or unwelcome is prohibited in the workplace. These forms of harassment include bullying, using slurs or negative stereotyping; intimidating acts, sexual advances and sexually explicit language are among the harassment that Wal-Mart prohibits through its rules towards corporate governance (Monks & Minow, 2008).
The Importance of Internal Rules in a Company
Wal-Mart has developed laws and rules that ensure that the workplace is free from drugs and alcohol as their commitment towards promoting a safe workplace. The company is dedicated to safe and healthy place of work for everybody. Thus, the possession, or use of illicit drugs or being under the pressure of these drugs whilst at work is prohibited. The company strictly prohibits indecent use of drugs plus alcohol, especially among the employees (Barbaro, 2007). These employees are not suppose to report to work when they are under the pressure of alcohol or even use alcohol in the firm’s premises. These rules in the workplace are designed to promote a safe workplace and anyone found violating this rule faces disciplinary action, and if severe can lead to the dismissal of the affected employee. In some cases, the company takes customary practices routinely in nations in which a moderate use of alcohol with a business meal is widespread (Trumka, 2012).
Wal-Mart has developed rules that govern the employees working hours and wages. It is dedicated to adhering completely to all the applicable rules and laws that deal with wage and hourly issues that comprise off-the-clock work, meal periods, overtime pay, termination pay, minimum wage needs. Under the company’s rules it is a breach of law and policy for one to work without pay or for a manager whether hourly or monthly pay to request the employee to work without pay (Simpson & Taylor, 2013).
Wal-Mart has tailored rules that ensure that the stakeholders make choices firmly on the basis of the company’s interests. Managers are needed to following the rules prohibits them from working with the rivals thus undermining the company’s business creating conflict of interest. Also, hourly employees must check with managers prior to accepting job with a rival to ascertain if a clash of interest can occur (Barbaro, 2007). Managers and employees are prohibited through the company’s rules to having any social or other relationships with suppliers in a scenario where the association will give the discernment a business control is being exerted. The employees and managers are needed to ensure that uphold these rules and ensure that they do not violate them, as the company has well-designed system of dealing to the violation of these rules (Gu, 2010).
The Wal-Mart’s internal rules have been a major strength of the company that has ensured that the company creates a safe workplace that promotes ethical practices. The employees and other internal stakeholders have been keen in following the rules set by employer. This has prevented violation of workplace ethics that has increased the efficiency of the employees. The compliance to the internal rules has allowed the employees to undertake their roles more efficiently thus promoting workplace ethics. The other strength of Wal-Mart’s internal laws and rules is that it has promoted compliance that has translated to compliance of the global ethics (Heskett, Sasser, & Wheeler, 2008)). This has placed the company into world map being an ethical firm that has strict internal rules. Consequently, this has boosted the company’s reputation in the local and global arena. However, the internal rule has been criticized by employees and human right activists as being rigid and undermining the rights of the employees that make them weak. For instance, the company has been criticized for not compensating its employees well through its minimum-wage policy. Another weakness is that the internal rules at the company are too much that in some instances confuses the employees of the company (Mandhani, 2018).
Conclusions
Wal-Mart has become successful in the corporate world because it has become a compliant in it corporate laws. The internal rules of the company have increased the company’s reputation in the global world. The company has succeeded in creating a safe workplace because of the effective internal rules that govern behaviors of the managers and employees towards ethical business environment. This has been possible through the hierarchical functional structure that promotes effective implementation of the internal rules within this structure. The company should streamline its internal rules to become comprehensive and avoid being too crowded like at the moment.
References
Barbaro, M. (2007). Bare-Knuckle Enforcement for Wal-Mart’s Rules. The New York Times. Retrieved July 24, 2018 from https://www.nytimes.com/2007/03/29/business/29walmart.html.
Csaszar, F. A. (2012). Organizational structure as a determinant of performance: Evidence from mutual funds. Strategic Management Journal,33(6), 611-632.
Csaszar, F. A. (2013). An efficient frontier in organization design: Organizational structure as a determinant of exploration and exploitation. Organization Science, 24(4), 1083-1101.
Gu, M. (2010). Understanding Chinese company law. Hong Kong: Hong Kong University Press.
Hamilton, C. (2008). Communicating for results: A guide for business and the professions. Belmont, CA: Thomson/Wadsworth.
Heskett, J. L., Sasser, W. E., & Wheeler, J. (2008). 10 Reasons to Design a Better Corporate Culture. Harvard Business School.
Loeb, W. (2014). Why Walmart suddenly thinks smaller is better. Forbes. Retrieved July 24, 2018.
Mandhani, N. (2018). We visited Walmart in India — and it’s shockingly different from what you’ll see in America. Business Insider. Retrieved July 24, 2018 from https://www.businessinsider.com/what-its-like-to-shop-at-walmart-in-india-2018- 2?IR=T.
Mäntysaari, P. (2005). Comparative Corporate Governance: Shareholders as a Rule-maker. Berlin, Heidelberg : Springer Berlin · Heidelberg.
Monks, R. A. G., & Minow, N. (2008). Corporate governance. Chichester, England: John Wiley & Sons.
Simpson, J., & Taylor, J. R. (2013). Corporate governance, ethics, and CSR. London: Kogan Page.
Trumka, R. (2012). Is Walmart Too Big, Powerful, Influential to Obey the Law?. Huffing Post. Retrieved July 24, 2018 from https://www.huffingtonpost.com/richard-trumka/walmart- mexico-bribery_b_1455680.html.
Turner, C. (2009). Corporate governance: A practical guide for accountants. Amsterdam: CIMA.
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