Change is the process whereby the manager of the organization leads the team through a transition. The organization moves from its current way of doing things to an improved way of doing things that is in line with the current economic environment.
For change to be implemented, the facilitators of change who are usually the organizational leaders have to understand the current structure of the organization, as well as the challenges and problems they are facing (Jones, 2010).
Once the structure has been understood, the change to be implemented is designed, indicating how and when it is to be implemented. After implementing the change, it is important to follow up to ensure that everything is going on as planned.
In case of any failure, the facilitator should act fast to prevent the whole process from failing. This paper gives a description on how to facilitate change in Walmart, a chain store that wishes to extend its operations in China.
Summary of the existing structure of Walmart
Walmart Stores Inc. is a multinational corporation whose headquarter is located in Bentonville, Arkansas in the United States of America. Walmart was founded in the year 1962 by an American man known as Sam Walton.
It later became a corporate in the year 1969 and later became listed in the New York Stock Exchange in the year 1972. The corporation runs a chain of stores and warehouses that are located in different parts of the world. It is one of the largest chain stores in the world.
It is said to have about 8 500 stores that are distributed around 15 countries. The stores in the various countries are referred in different names, about 55 different names.
In fact, in the year 2010, Walmart was declared the largest corporation in the world in terms of revenue. In addition, the corporation is regarded as one of the largest private employer in the world (Roberts & Berg, 2012).
Walmart currently uses a matrix organizational structure. This is a structure where the employees are grouped in terms of products and functions. Employees are grouped in departments according to the products that the organization produces.
Walmart is divided into geographical regions, whereby each region has its own departments, managers and directors. Each of the regions is headed by the regional vice president. The vice president is usually based at the stores headquarters in the US, but he travels each month to the region he supervises.
Regional managers meet weekly to discuss the way forward for individual stores. There are 35 regions and each of the regions has districts that are headed by the district manager. There are different managers for the various departments, which are divided according to the jobs they are supposed to carry out.
Down the organizational hierarchy, there are lower officials who include sales executives, cashiers, stockers, and other casual workers. All Walmart departments in the various regions report to the home office located in Bentonville, United States of America (Roberts & Berg, 2012).
The existing organizational design of Walmart
As it has been stated earlier in this article, employees at Walmart are grouped according to the products and services offered. In addition, the production of the company is grouped into departments. Therefore, an employee is posted at a production department that corresponds to his or her qualifications.
There are different departments at Walmart, which include stores, production, sales, and human resource department.
The human resource department is the one that has the responsibility of hiring and firing employees. It is also the one that allocates the hired employees to the various departments where they best fit (Jones, 2010).
The success of Walmart can be evidenced by the resources it possesses. It has sufficient financial resources, as well as physical and human resources. Being a well- established corporation, it has the ability to generate enough financial resources for its projects. Its borrowing capacity is also high.
Walmart uses its financial resources by expanding its operations, investing in new projects, as well as in corporate social responsibility projects. In addition to its financial resources, Walmart also has a rich base of physical resources. It has buildings across the world where it has established operations.
Its buildings are found in the rural areas, as well as in all its roots. Further, the corporation has products that it sells in all its locations. The products are delivered through sophisticated logistics. The physical resources of Walmart help it in generating income (Roberts & Berg, 2012).
Finally, the organization is rich in human resources. It is known to be one of the largest private employers in the world. Walmart depends heavily on its human resource department to hire employees and then fit them to the jobs that perfectly march their qualifications.
It is also the function of the human resource department to motivate their employees and help them work at their best to improve the organizational performance.
The success of Walmart can be attributed to the hard working human resource that it has (Roberts & Berg, 2012). Generally, the corporation uses its human resource in executing its operations in the various departments.
Challenges of the existing organizational design at Walmart
The organization design of any company or organization is important since it helps in dealing with its contingencies. In addition, it gives the company a competitive advantage and helps increase efficiency, manage diversity, as well as improve their products and services innovative ability.
The existing organization design of Walmart has helped the corporation achieve its current success, but it is faced with a number of challenges that it needs to address in order to successfully expand into China (Chuang et al., 2011).
It is imperative to note that the Chinese market has significant differences compared to the United States of America market. The cultures of the two nations have significant differences.
Consequently, the products preferred by the Chinese people may differ from those preferred by the Americans. The marketing strategies that appeal to Americans may not appeal to the Chinese.
First, the human resource department has been faced by challenges in that the employees have complained about abuse and discontent. They actually filed complains about unfair labour practices in the court of law. This is a problem that the company should overcome.
The company should be able to treat its employees well and ensure fair labour practices. China is a country that has its own culture and, therefore, the treatment of employees there differ from the treatment of employees in America.
Walmart should, therefore, be keen to address its human resource issue for it to increase its chances of penetrating the Chinese market.
The other major challenge that faces the organization is how it can prevent the corporate issues that are likely to slow down the value adding activities. Value adding is a competitive advantage to any organization.
The methods that can be used to speed up the process are a challenge that faces any design that is based on matrix structure, product group structure or geographical region structures.
Summary of the changes in strategy developed in Week Four
Walmart has to make some adjustments to its current structures in order to succeed in the Chinese market. It is imperative to note that the Chinese market advocates for low prices for products, as well as high quality. Walmart has been able to maintain low prices.
However, it has not focused a lot on the quality of its products. As a result, it might not succeed in China unless it improves on its product quality and maintain the low prices. Low prices and high quality will be the only way that the company can win the loyalty of Chinese consumers (Chuang et al., 2011).
Walmart also needs to change its marketing strategies since the Chinese market is different from other markets where Walmart operates. First, Chinese people are known for being brand conscious.
It is the brand that usually influences their decisions; therefore, Walmart should be able to maintain its brand in the market. It should focus its efforts mainly on conducting promotions that attract masses, as well as incite the consumer emotions into buying its products. This can be achieved by use of salespersons.
Finally, Walmart needs to adjust its partial current centralization strategy that it has adopted in pursuing its operations. China is known to be a less homogeneous market. As a result, Walmart needs to decentralize its strategies and approach in the Chinese market.
This will give more freedom to allow room for decision making by the organization that is more fitting to the Chinese market. The managers will be given the freedom to enter into business deals and agreements with suppliers, thus making business operations easy (Chuang et al. 2011).
Decentralized decision making increases chances of innovation. Different employees have different ideas that can be of importance to the entire organization if they are paid attention to.
China believes in innovation and, therefore, the Chinese give all employees a chance to make their contribution in decision making. This is also a way of motivating employees to work hard since they feel they are part of the organization.
Recommendations to the current organizational structure
For the corporation to succeed in the Chinese market, it has to make some adjustments to its current organizational structure. Specifically, the marketing department needs to be adjusted to fit that of the Chinese market. It has been indicated that China is a country that advocates for high quality goods and low prices.
Therefore, the production department needs to find better ways of production to meet this expectation. The methods of production should be cheap and ensure high quality. Walmart should work in conjunction with the marketing department to find out market prices.
The market departments should conduct research to establish market prices (Jones, 2010). Further, the marketing department should change its advertisement procedures to ensure advertisements and promotions attract masses.
There should be marketing agents who will be in the field to try and incite consumer emotions to buy the products. The decision making of the marketing department should be decentralized to allow ample decision making that is accommodative to the local market.
The above recommendations will be helpful to Walmart as it expands its operations in the China market. Walmart will be able to secure the loyalty of the Chinese consumers by lowering prices and at the same time maintaining high quality products and services.
This will be helpful in maintaining a strong consumer base. In addition, the change in advertising procedures will also help the organization in winning the loyalty of consumers (Chuang et al., 2011). Decentralization of decision making will also be helpful in that it will allow business processes to learn smoothly.
Managers can strike deals with suppliers without having to follow complex protocols; hence speeding up the deals. In addition, decentralized decision making will give employees motivation to work hard.
It will also increase chances of innovation. Innovation is a tool that gives an organization competitive advantage, especially in the current economy. Embracing decentralization will, therefore, increase chances of Walmart’s success in China.
Facilitating change is not an easy process. It is a process that takes time and should be given the attention that it deserves. Walmart needs to make adjustments to its current organizational design, which is likely to face challenges in the Chinese market. The department that needs to be adjusted is the marketing department.
This department should be designed in a manner such that it is in line with Chinese market. Failure to take note of these intricate issues will lead to failure in the Chinese market.
Chuang, M., Donegan, J. J., Ganon, M. W., & Wei, K. (2011). Walmart and Carrefour experiences in China: resolving the structural paradox. Cross Cultural Management: an International Journal, 18(4), 443 – 463.
Jones, G. R. (2010). Organizational theory, design, and change (6th ed.). Upper Saddle River, NJ: Pearson.
Roberts, B. R. & Berg, N. (2012). Walmart: Key insights and practical lessons from the world’s largest retailer. London: Kogan Page.