Modernizing Structure

Modernizing Structure

Modernization is an integral component of organizational development especially in the modern period where competition has intensified. Organizations may fail to achieve their full potential due to poor modernization strategies. Modernization requires careful execution of change management process. Lack of adequate modernization strategies can create divisions amongst staff members which may be detrimental to the organization’s performance. Nonetheless, some of the organizational structures may still resist change. The management may find it difficult to drive changes among employees in some of the areas. This paper will analyze the characteristics at Wal-Mart that have resisted change over time.

One of the characteristics at Wal-Mart that have resisted the trends towards widening the span of control, flattening the structure and forming collaborative and flexible teams is its labor relations practices. Wal-Mart’s labor relations practices have remained relatively the same over time. The company’s labor practice have been regarded asocial over time, contributing to high rates of employee turnover. Since its inception in the 1950s, the company has largely received negative publicity owing to its harsh labor policies. Wal-Mart is known for keeping its labor costs at minimum wage levels to the detriment of employees. In the 1970s, employees’ efforts to get unionized were dashed after the company adopted strict policies to curtail the same. Over the years, the company has been accused of using unorthodox means to keep employees from forming unions. For instance in 2005, employees at one of its Canadian stores entered in a trade union but the company refused to negotiate with the union.

Wal-Mart’s business model has also resisted the trend towards modernization. The company’s business model has traditionally been based on moving a large variety of items at low prices. Wal-Mart sells general merchandise that is highly moving at low prices. The company capitalizes in profits through moving of large number of items. Over the years, new and effective business models have emerged giving the once highest selling retailer in the U.S. stiff competition. For instance, the emergence of online stores such as Amazon has given Wal-Mart stiff competition due their lower prices charged for general merchandise. Wal-Mart’s low pricing which has traditionally attracted customers to the stores is no longer attractive due to the emergence of online stores which are much cheaper. Wal-Mart can no longer rely on pricing as its major strength. There is need for Wal-Mart to focus more on its customers and establish what they actually need. Wal-Mart can then focus on filling any niche identified. The traditional business model which emphasize on pricing and merchandising is thus broken.

Related: Self-Esteem

The last characteristic is the company’s organizational structure. Traditionally, the company has followed a divisional structure. In this structure, the entire organization is divided into several semi-autonomous divisions or units. Each division is headed by a manager who is in charge of its performance. The managers work harder since their direct effort counts to the success or failure of the division. The various divisions at Wal-Mart include Wal-Mart international, Wal-Mart Realty, Wal-Mart Special Stores, and others. The divisional structure is more of a traditional organizational structure. Contemporary designs such as team structure, project structure, matrix structure, and autonomous internal units can bring desired changes in the organization and aid in regaining competitiveness. A matrix structure would be effective in bringing overall change at Wal-Mart. In this structure, specialists from various departments are assigned a task to work on a particular project.

To conclude, modernizing an organization requires careful change management strategies. Modernization can improve the performance of an organization if well implemented. A key part of the process lies in ensuring that the management as well as employees support the change process.

References

Denning, S. (2011, Feb. 23). Wal-Mart and the futility of traditional management. Forbes. Retrieved from http://www.forbes.com/sites/stevedenning/2011/02/23/wal-mart-and-the- futility-of-traditional-management/#178ae3753fae

Greenhouse, S. (2015, June 8). How Walmart persuades its workers not to unionize. The Atlantic. Retrieved from http://www.theatlantic.com/business/archive/2015/06/how- walmart-convinces-its-employees-not-to-unionize/395051/

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