Wal-Mart: Managerial Philosophies and Principals
1.How have Wal-Mart's managerial philosophies and principles supported pursuit of the firm's key objectives?At the center of Wal-Mart s managerial philosophies and principles is the belief that when employees (called associates), suppliers, and customers when treated with respect stronger and more mutually beneficial relationships result (DataMonitor, 2007). The late founder and CEO of Wal-Mart, Sam Walton s managerial philosophies and principles still have a significant effect on the daily performance of Wal-Mart, from the achievement of tactical goals to strategic objectives. Mr. Walton pioneered the development of the Grass Roots Process, the core three beliefs and values of the firm, the 10 foot rule, senior management support for the open door policy for all managers in addition to widespread practicing of servant leadership. In addition to all these there is the enthusiastic approach to team building and maintaining a high level of employee morale. All of these factors illustrate how egalitarian the Wal-Mart strives to be. The Grass Roots Process has its basis on the beliefs Sam Walton had of the best ideas coming from the associates who work with customers on the retail floor, or work in the company s many warehouses
Wal-Marts economies of scale and inventory position in each super center, which averages $330M (Dean, Sobel, 2008) forces planning and controlling to continually monitor each other to ensure a high ROIC is achieved. As a result of how dependent Wal-Mart is on inventory turns and the Return on Invested Capital (ROIC) (DataMonitor, 2007) the planning and control functions of management are tightly integrated with one another to ensure progress towards objectives are tracked and measured as goals are attained. Using mixed-mode pallets to supply these stores would significantly cut down on the costs of first accepting products into a centralized Wal-Mart warehouse and then re-sorting them for smaller stores. When all these objectives are taken together, it s clear that there needs to be an extremely high level of communication, collaboration, and seamless flow of information across processes and systems in Wal-Mart. Walton was passionate about, which states that if any associate is within 10 feet of any customer an offer of assistance needs to be made. There is also the need for managing the costs and daily sales of every super center, which must generate nearly $350,000 a week to break even (Dean, Sobel, 2008). The reasons for this is to take advantage of the low cost per capital today, the slow movements of UK-based global competitor Tesco in the U. , or manage the company s extensive supply chain operations. Third, I would advise Wal-Mart to continue aggressive distribution center plans of adding at least four more in the U. The Indian government specifically likes to see foreign corporations have representation on their boards from Indian companies, and Wal-Mart needs to work on this diligently. The management philosophies and principles of Wal-Mart are essential to the rapid pace the company must move at to integrate and synchronize the people, processes and systems together to attain its objectives. The second recommendation I would make to Wal-Mart is to concentrate on how to successfully launch into India. by upgrading stores that had lost their appeal due to the rapid change occurring in retail brands today.
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