Wal-Mart Stores, Inc. in 2010

Introduction

Wal-Mart Inc. is a multinational company that operates a chain of retail stores across the world. The company gains strategic advantage by providing a wide range of goods at relatively low prices. According to Davis (2007), an American likes Wal-Mart because it offers products at relatively cheap prices compared to other stores. In addition, a customer can purchase box of cereals, medical prescription, and pair of sunglasses all under one roof. The company is also known for its strong brand name. Accordingly, to maintain its brand image and build trust it develops good relationships with customers and employees. Its success is associated with founder Sam Walton abilities motivate employee and his ideal characteristics. During his tenure their culture was popular for customer satisfaction, value for hard work and associate appreciation. However, things have changed with aspersions being cast on its reputation. The company expansion strategy has brought criticism for interfering with community life in neighborhoods and cities in the world. As a result, its expansion strategy faces challenges from neighborhoods that resent its stores fearing it might negatively affect their local economy. Additionally, customers are reacting to negative publicity with 2 to 8 percent of their customers making decision to stop visiting their stores. The company has also been attacked for healthcare issues and employee discrimination. These challenges pose threats to the company trustworthiness and calls for a change in its policies. With the company image under criticism it has reacted by introduction of a public relation team to counter the negative attacks. Strategic management practices can help large corporations like Wal-Mart deal with dilemmas in decision making.

Body

Wal-Mart is rapidly expanding its business operations. It has over 8,400 retail units in 15 countries and serves more than 200 million customers. To accomplish the tasks and increase sales and profitability, the company employs over 2 million employees commonly referred as associates (Duke, 2010). The company faces strategic dilemmas in this endeavor. The company faces strong competition for sales from other warehouse clubs, discount, drug, department, supermarkets variety and specialty stores in both national and international levels. In addition, they also face competition for prime location and in recruiting and retaining competent associates (“Walmart Annual report,” 2010).

In addition, due to its enormous size the company is dependent on wage-and-hour employees. In this regards the company is defending various law suits for wage-and-hour violations. Allegations cast against them include failure to provide meal periods, rest breaks and other benefits as well as failure to pay them properly (Annual report, 2010). Additionally, in law suits like Wal-Mart stores, Inc. v. Dukes et al (2011) The Company has been accused of discriminatory behavior. Local managers were accused of having powers to determine wages and promotion decisions and that they acts in favor of men and this negatively affects female employees. Claimants argued that there is common discrimination against women where male associates are highly paid and promoted in comparison to females. This makes groups that have been criticizing Wal-Mart happy because the case can negatively affects the image of Wal-Mart and pressurize the company to charge corporate culture in handling women in the organization. This case action can, therefore, be detrimental to the organization public image and result in huge monetary settlements.

Accordingly, being a major employer Wal-Mart seems to have problems dealing with its workforce. Problems in motivation, administration and monitoring seem to plague the organization. However, management of large corporations should be the role of board of directors. The role of approving plans is supposed to be the prerogative of the board in rapidly expanding industries. In cases where this is the case the company is able to improve performance and profitability. The chief executive can also retain the role of approval when the industry is not asset-intensive (Singh, 2008).

In Wal-Mart case their former president Sam Walton did not have problems dealing with these problems. He was popular for giving motivational talks in the morning to associates and maintaining an open door policy. Additionally, any member of the organization could talk to him and get a solution to their problem and he made sure that the management team acquired the same attitude. His tenure was known for the open communication and respect as strategies for effective management. That is appreciation of everything each person does for the organization and listening to them. However, following his death criticism and the multiple law suits have been on the rise especially in regards to how the company treats its associates. The increased criticism is partly due to its expansive growth strategy as well as failure to monitor the negative sentiments that have come up due to expansion. If not mitigated problems like off the clock work and gender discrimination can generate negative publicity for the organization (Davis, 2007).

To counter these criticism Wal-Mart mainly use verbal rhetoric action and also instill discipline by closing stores that do not meet organization standards. So for instance, Wal-Mart disagree with allegation that it perpetrates these discriminations and states that such claims cannot be taken to mean that it generally mistreats women in the workplace. They use their websites to defend the organization from these claims. In addition, they also cite various awards that the company has won for maintaining a track record for women in the workplace. For instance, Latina style magazine named it as one of the 50 companies that Latinas should work for in America (Davis, 2007).

In order to counter the competition for strategic location and sales in new markets, Wal-Mart engages in strategic alliances and acquisitions. In UK for instance, they have merged with ASDA. In other countries like Germany it took over Wertkauf a local store and also 122 Woolco stores in Canada. The takeover strategy employed by the company enable it to enter new market and also minimize the level of competition. This has helped the company to continue having a large market share in international market and of course maintain the brand name (Gopal, 2009).

Therefore, to handle the two dilemmas Wal-Mart should continue with these two strategies. Reputation management is a factor of framing messages with ability to influence people and large corporations’ perceptions. On the other hand, competition for sales and strategic location can be minimized by choosing the right partner or company for takeover.

Conclusion

Large corporations like Wal-Mart are faced by numerous problems as they move forward. Community expectations for these companies are high and its only proper management tactics that can protect the company reputation and brand image. Communication and Strategic partnerships are key elements of reputation management. Managers must learn how to use strategic rhetorical discourse in mitigating forces which affects their market.

References

Singh, M. (2008). Strategic Management and Competitive Advantage. Global India Publications.

Duke, M. (2010). Wal-Mart CEO Mike Duke Outlines Strategies for Building the “Next Generation Wal-Mart”. Retrieved from: http://walmartstores.com/pressroom/news/9974.aspx

Gopal. (2009). Strategic Management: A Case Study of Walmart Inc. Article Base. Retrieved from:

Davis, N. D. (2007). Corporate Reputation Management, The Wal-Mart Way: Exploring Effective Strategies in the Global Market Place. A Senior Honors Thesis Submitted to the Office of Honors & Academic Scholarships in Texas A&M University.

Wal-Mart Stores, Inc. V. Dukes et al. (2011). Supreme Court of the United States.

Walmart 2010 Annual Report. Retrieved From: http://cdn.walmartstores.com/sites/AnnualReport/2010/PDF/01_WMT%202010_Financials.pdf