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Wal-Mart’s level of decentralization or centralization
The business structure of Wal-Mart is both decentralized and centralized. There are a number of managers who can easily make decisions concerning their own operations, for instance, store managers are able to make decisions concerning their operations.
They can easily make decisions concerning the number of individuals to be hired by the firm. However, there are some decisions that cannot be made by them like product selection or product reordering. Therefore, stores operations are decentralized in Wal-Mart while sourcing for products is centralized.
Additionally, Wal-Mart has consolidated its international procurement functions and besides, it has significantly minimized the application of intermediaries to globally source for its products. The operations of Wal-Mart in all the 15 nations are also decentralized.
The structure of Wal-Mart
The structure of Wal-Mart can be said to be flat. The firm is highly adaptive to changes in technology and besides, it adapts to changes in the area of information technology so as to ensure that their processes are streamlined.
Presently, the world has become very flat and this is not brought about by the availability of outsourcing opportunities or cost benefits but due to the uniformity of global consumers. This has provided firms with the opportunity to spread globally. Customers have become uniform since they are connected with information (Segal, 215).
Wal-Mart’s Organizational design
There are two main categories of organizational designs; traditional as well as contemporary designs. Functional structures, simple structures as well as divisional structures are some of the examples of traditional designs while contemporary designs include matrix, project as well as team structures (Chandler, 24).
The design of Wal-Mart is divisional structure which falls in the category of traditional design and it should be noted that divisional structures are made of distinct as well as semi-autonomous divisions. In an organization, there might be several divisions, each with its distinct goals to achieve.
Each division is headed by a manager who is charged with the responsibility of ensuring that the division is successful. Wal-Mart has numerous divisions which include Wal-Mart international, Wal-Mart reality, supercenters, as well as Sam’s club and this makes it to be a divisional structure.
Factors affecting organizational design of Wal-Mart
The organizational design of Wal-Mart is influenced by a number of factors. These include environmental, life cycle, the size of the organization, strategy, as well as business environment. For instance, the size of Wal-Mart to a great extent influences its design. When an organization is large, just like Wal-Mart; it needs a highly powerful framework for the culture and design of the organization. Organizations having many workers like Wal-Mart always need additional managers for the supervision of workers.
Organizational designs are always affected by the strategies of the business, for instance, high-growth firms like Wal-Mart usually have structures which are smaller in order to respond to changes within business environments rapidly. Additionally, business environments are also very significant determinants of organizational designs. Organizations also spend more time as well as capital in creating organizational structures in environments that are dynamic.
Besides, technology has also influenced the organizational design of Wal-Mart. Technology helps in the procedures of work and besides, it is also beneficial in the facilitation of information within firms.
Chandler, Alfred. Strategy and Structure. Garden City: Doubleday, 1962. Print.
Mason, David. Voluntary Non Profit Enterprise Management, New York: Plenum Press, 1984. Print.