The Good and Bad of Wal-Mart's Culture
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Case Details:
Case Code : HROB037
Case Length : 17 Pages
Period : 1943 - 2003
Pub Date : 2003
Teaching Note : Available
Organization : Wal-Mart
Industry : Retailing
Countries : USA
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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.
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Excerpts
Walmart's Culture - Supporting Success
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Analysts attribute Wal-Mart's success to its strong and pervasive culture. In
spite of its huge size and tremendous growth rate, the company retained most of
the cultural elements which contributed to its success in the early years.
Walton believed that happy and satisfied employees performed well and were
responsible for happy customers.
Towards this end, he store to create a culture which encouraged employees to
contribute their best. It also ensured discipline and uniformity in an
organization that was growing at such a rapid pace and had been operating for
over 40 years.
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Wal-Mart's culture was essentially customer-centric and service-oriented. It
embodied Walton's dream of creating a store which provided the best value at
the lowest prices. A unity of purpose and a spirit of oneness was created
and maintained across the organization.
Some unique features bound the people associated with Wal-Mart together, one
of these being that Wal-Mart followed a separate calendar which was based on
'Wal-Mart time', i.e. 'week 1' in the calendar was the first week of the
company's fiscal year that started on February 1st every year.
The Foundation of Wal-Mart's Culture
Wal-Mart's culture was built on three basic beliefs or tenets established by
Walton in 1962, when Wal-Mart was first set up. These tenets constituted the
foundation of its culture in later years. They were...
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Human Resource Culture
Wal-Mart realized that employees played a very important role in the
success of a retail business and gave considerable importance to
them. To instill a spirit of equality and oneness among employees,
the company adopted the practice of terming employees 'associates',
thus creating in them a sense of belonging and involvement in
Wal-Mart's activities and success. Walton believed that if he took
care of the employees, they would take care of the customers in the
same manner. |
He tried to create a positive and cheerful atmosphere in the
company. Wal-Mart was one of the first companies to introduce profit sharing and
stock options for its employees. After it went public Wal-Mart began its "Profit
Sharing Plan". The plan offered an opportunity to its employees to improve their
income depending on the profitability of the store. Employees were also offered
stock options and store discounts.
This was to motivate them to take an active interest in the working of the
company. A system of performance linked compensation and bonus also ensured that
employees contributed their best to the organization. One of the unique features
of Wal-Mart's human resource policy was that the company did not authorize
overtime work. It did not allow store managers to overburden employees with
work.
The company was also committed to improving the career prospects of its
employees. It had a policy of recruiting more than 70 percent of its personnel
in managerial positions from the ranks of hourly workers in the stores...
Excerpts Contd...>>
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