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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"All associates work for the customers who buy our merchandise. In fact, the customers can fire everybody in our company. And they can do it by simply spending their money somewhere else. The greatest measure of our success is how well we please the customer, 'Our Boss'. "

- Sam Walton, Founder of Wal-Mart1

"Our commitment to meeting the needs of each individual Customer can be fulfilled only by recruiting, developing and promoting the very best people we can find around the world".

- John B. Menzer, Head, Wal-Mart International Division in 2003.2

"Our family is proud of the accomplishments of our Wal-Mart Associates around the world. Without their dedication and commitment, there would be no Wal-Mart."

Rob Walton, Chairman, Wal-Mart in 20033

'Good to Great'

In 2003, with sales at a quarter of a trillion, a double digit growth rate, and employees exceeding 1.3 million, Wal-Mart was one of the most successful companies in the world. Not only was Wal-Mart the biggest retailer in the world, it was also the biggest customer for companies like Disney, Proctor and Gamble, Revlon, Campbell Soup, Gillette, etc. In addition to this, it was the biggest seller of DVDs, CDs, groceries, guns, diamonds and a number of other products in the US. Wal-Mart was a super-retailer where a customer could get whatever he wanted under one roof. The company thrived on convenience and reasonably priced products.

Human Resource and Organization Behavior | Case Study in Management, Operations, Strategies, Human Resource and Organization Behavior, Case Studies

Wal-Mart always gave more importance to volumes than margins and promised customers the lowest prices on every kind of goods. Analysts believe that culture is one of the most important determinants in making a good company a 'great' one.

The success of Wal-Mart has long since been attributed to the company's strong cultural base. Analyst Jim Collins4 observed that Wal-Mart had the kind of 'cult-like' culture that is shared by all great companies. Even the employees of Wal-Mart were sometimes referred to as "Walmartians" by outsiders, reflecting the distinctiveness of the people who shared that culture. It was a wonder that a company of such a huge size and scope could maintain its entrepreneurial spirit so many decades after it first started, besides achieving admirable growth rates which were poised to make it the first trillion dollar company in the world.

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4] Jim Collins was an analyst and writer known for his work in the field of enduring, great companies. "Good to Great" and "Built to Last" were two of his best selling books. He was also a columnist for prominent business magazines like Business Week, Fortune, Fast Company, Harvard Business Review, etc.


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