Organisational Theory: Wal-Mart's Management and Leadership Analysis

This case study analyzes the management practices, leadership styles, and organizational structure of Wal-Mart. It delves into the management styles employed by the CEO, including authoritative and affiliative approaches, alongside the application of Henri Fayol's management principles such as division of work, discipline, and unity of direction. The study examines the functions of management—planning, organizing, staffing, directing, and controlling—as implemented by the CEO. Furthermore, it explores the organizational structure, including divisional, functional, and flat structures, and their impact on achieving higher performance and cultural change. The analysis extends to the leadership styles, specifically transformational, transactional, and situational leadership, and their effects on power dynamics, influence, and conflict within the firm. Different types of motivation used at Wal-Mart are also discussed. The study provides a corporate example and literature review for justification, offering suggestions to increase organizational performance.

Organisational
Theory and Practice
1

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................4
Explain management style, principles and functions of management used by retail firm CEO.4
Discuss various steps taken by CEO according to their organisation structure for achieving
higher performance and cultural change bought by CEO...........................................................5
Explain the leadership style used by CEO of relevance company..............................................6
Analyse the effects of power, influence as well as conflict at the chosen firm..........................7
Discuss the different types of motivation used at chosen firm...................................................8
Corporate example and literature review for justification........................................................10
Provide suggestion based on discussion & debate which increase organisational performance.
...................................................................................................................................................10
CONCLUSION .............................................................................................................................11
REFERENCES..............................................................................................................................12
2

INTRODUCTION
Management style refers to a method which helps in managing organisation employees
and different activity (Adeoye and Adekunle 2020). It includes different functions of
management such as planning, organising, staffing, directing and controlling use for successfully
achieving organisational goal. This report is related to Wal-Mart, which is an American retail
company launched in 1962. Its headquarter is in Bentonville, Arkansas, U.S. It has around
11,510 stores established all over the world. It deals in almost all types of products such as
electronics, movies, clothing, pet supply, home improvement, jewellery, health and beauty. It
also deals in serveries such as pickup today, financial service etc. In context of selected firm its
leaders use different management styles for properly controlling and managing its resources and
workers. CEO of Wal-Mart (Doug McMillon) follow different management theories for facing
different situations and effectively achieving organisation goal. This report include different
management styles, functions and motivational theory used by CEO of selected firm for
managing their workforce. Every leader in an organisation have its own different style for
managing their employees properly. In relevance of chosen firm, transformational leadership
style is used by their leaders for enhancing skills of their employees. So that they work with their
full efficiency and achieve organisational goal.
MAIN BODY
Explain management style, principles and functions of management used by retail firm CEO.
Management style: In context of company, their CEO (Dong McMillion) use different
management styles for managing different activities and human resource in an organisation.
They use authoritative management style, which means providing a long term goal and direction
to their employees for smooth functioning of organisation. Because of this style their employees
are focusing on a clear direction. They are felling free and comfortable while performing any
task. Another important management style used by selected firm is affiliative management style.
CEO of selected firm use this management theory for creating a good relationship between
manager and employees in an organisation. By using this theory manger focus on avoiding
3

conflicts in organisation. Which helps in smooth functioning of business (Ayman and Lauritsen
2018).
Principles of management: It play an essential role in an organisation. CEO of selected firm
use different principles given by Henri Fayol. Which helps him in managing all its internal
activities of an organisation. Principles used by selected firm in organisation are discuss below:
 Division of work- In context of company, their CEO use this principle for enhancing
productivity and efficiency of their employees. In this principle all work is divided into
teams which reduce stress level of their employees. It will enhance their workers
accuracy and speed (Martínez-Costa and et. al. 2019).
 Discipline- It is consider as core value of any management. Which helps selected firm to
enhance performance level of their employees. Good behaviour of employees helps them
in building their careers.
 Unity of direction: This principle of management used by selected firm for their workers
to work for a specific goal and task which will make their work simple and help in
achieving organisational goal.
Functions of management: In context of selected firm their CEO use five important function of
management for properly managing their human resource and different activities of an
organisation. These are discuss below:
 Planning- First important function of management used by CEO of selected firm is to
make a clear plan that helps in achieving organisation goal. This plan includes all actions
and strategies which are used for smooth functioning of organisation.
 Organizing- It refers to a process which help CEO of selected company to established a
relationship between workers to work with their full efficiency towards achievement of
specific plan
 Staffing- It refers to selecting a right person at a right job in an organisation. For success
of any organisation its important that their employees have good knowledge and skills
(Holweg and et. al. 2018).
 Directing- This function of management involve guiding and motivating employees
towards achievement of organisation goal. In context of selected firm, their CEO use
different techniques to motivate their workers towards achievement of specific plan.
4

 Controlling- this is the last important function of management used by selected firm
CEO for analysing work performance. In this function manager compare actual
performance with stranded plan. And take corrective action if required.
Discuss various steps taken by CEO according to their organisation structure for achieving
higher performance and cultural change bought by CEO
Organisational structure refer to a system related to activities are control for achieving
organisation goal (Hale and et. al. 2019). It helps in defining roles and responsibility of different
people working in an organisation. An organisation structure define flow of information between
high-level, middle level and lower level employees in an organisation. In context of selected firm
it use different organisational structure which helps in smooth flow of information. which are
discuss below:
 Division structure: It refers to a structure which divides different organisational
functions into product. Each division of functions contain all necessary resources which
support organisation growth. CEO of related firm use this structure for maintaining work
of various products. because selected firm deals with a large variety of different products.
In this structure the whole business is divided into different business units. Divisional
manager of selected firm control all operational activity. This structure helps in taking
right initiative & faster decision making. Wal-Mart deals in different kinds of products
and always try to enter in new product market. So their CEO simply add a new division
for product without interfering existing structure.
 Functional structure- It refers to an organisation structure in which all employees
having similar kind of knowledge are grouped together in a same department. In context
of selected firm their CEO place all employees who perform similar task in different
departments, such as finance department, human resource departments, marketing
departments etc. this type of structure helps in quick decision making & better flow of
information in organisation (Garcia, Hipel and Obeidi 2019).
 Flat organisation structure- It refers to an organisation structure with some levels of
managements. In context of selected firm, CEO follow this structure in an organisation at
a time of performing special task. In this type of organisation structure employees are
free to provide their ideas to higher authority which helps in decision making. They have
5

no need to follow organisation hierarchy and free to communicate with their higher
authorities. This organisation structure increase productivity of their employees.
Culture- Organisation culture refers to a group of values, behaviour, belief, experiences and
future expectation in an organisation which will transfer from generation to generation (Fallatah.
and Syed 2018). In context of company its organisation culture helps their employee in facing
different challenges. CEO always try to adopt new changes which make them innovative & takes
benefits of different future opportunities.
Impact on employees: In context of Wal-Mart, its organisation culture influence their
employees behaviour towards organisation. It helps in motivating employees towards
achievement of goal and enhance their learning & communication skills. It increases their
efficiency and productivity towards organisation.
Explain the leadership style used by CEO of relevance company.
Leadership refers to an art of guiding and motivating people towards the achievement of
common goal (Coleman and Stern 2018). Leaders use different leadership styles for providing
directions and successfully implementation of plan of an organisation. Its very important for any
organisation to select best leadership theory in their organisation. In context of company, their
CEO use transformational, transactional & situational theories for motivating and guiding their
employees towards achievement of organisational goal. Leadership style used by CEO of Wal-
Mart are discuss below:
Transformational leadership style: This type of leadership theory is also known as
relationship theory. In context of selected firm its CEO use this leadership style for motivating
their employees towards any task and want them to perform it with their full efficiency. By using
this leadership style, CEO of company create a vision for guiding their employees. According to
this leadership style they also have power to change operations of organisation. CEO is not only
focus on their employees performance but also helps employees in their further growth by
enhancing their skills and knowledge (Coleman and Stern 2018).
Transactional leadership style: This type of leadership theory is also known as
exchange theory. It mainly focuses on role of supervision, organisation and performance of team
in an organisation (arroll and et. al. 2018). Dong McMillion use this leadership style for
performing a specific task. For motivating their employees towards completion of specific task
6

reward and punishments are used. It will encourage their workers to work with their full
efficiency and productivity for getting rewards.
Situational leadership style- In relevance of company its CEO face different
challenging situations in an organisation. And he try to select its own leadership style which suite
the situation best. This type of leadership is defined by its leaders flexibility. It helps CEO in
facing any challenging situation occur in an organisation and smooth functioning of organisation
work.
Analyse the effects of power, influence as well as conflict at the chosen firm
Power- Power implies ability of an individual to change others behaviour and this ability
rely on several factors such as personality, knowledge and even authority (Harvey, 2017). If
formal recognition, is receive by power along with organisation backing it is termed as authority.
It is applied to interpersonal influence that lies either outside or within the relationship bounds of
formal organisations. Power comes with its consequences that could be positive or negative.
Positive effect of power leads to good relationship between managers and employees, which will
help managers to influence their employees in order to accomplish their goals. Negative effect of
power tends to create conflicts, superiority complex due to which employees find it difficult to
connect with their seniors. In context to power, Wal-Mart managers tries to maintain friendly
relationship with their subordinates that leads to completion of work on time and due to this
managers can easily mold the behaviour of their employees. Effect of positive power helps them
to attain potential customers and they have build a brand image.
Conflict- Conflicts are said to be clash of interests who basis may be different but it a
component of society. These basis could be class, personal, racial, caste, international and
political (Woodrow, 2017). Conflicts in entities occurs when more than one person or groups
oppose to ideas, goals, philosophies and disagree with each other while making decisions for
their operations. It is a part of universal principles that manages organisations as entities cannot
avoid conflicts. In an organisation conflicts may be intergroup, intergroup,interpersonal and intra
personal. Positive effect of conflict give birth to new ideas, change creativity and it can act as a
problem solving tool. On the other side demotivation, quitting of staff, anxiety or stress and non
productivity are negative side of conflicts. With conflicts, Wal-Mart employees have rethink
their decisions and they tries to get more collective view of any challenging situation. Company
7

employees have overcome their tensions and frustrations that help Wal-Mart to work in
systematic manner, as it bring cohesiveness in team.
Influence- Influence refers to change or affect something or someone in an indirect way
(Antino, Rico, and Thatcher, 2019). In an organisation influence is always two-way exchange, as
managers have influence their subordinates to do right things for achieving pre determine goals.
In this regard subordinates cannot do right things if they cannot influence what is goes in their
organisation. Organisational Influence comprises of trust, proposals, understanding, agreement
and commitments that will leads to high performance and satisfaction for both managers as well
as employees. Formal inside and outside are formal aspects that works for inside work groups
and informal inside and outside are informal aspects that operates from outside the entities work
groups. Positive effect of influence encourages high performance, more sale, productivity and
provide answers readily. And negative effect of it may leads to risky choices and make actions
difficult. If talk about Wal-Mart they have use influence as a tool through which they have
capture market by influencing more customers with their new strategies. They have also boost
their employees to work hard by influencing their activities and behaviour.
Discuss the different types of motivation used at chosen firm.
Motivation- Motivation can be define as mental process that guides, initiates and keeps
goal oriented behaviour (Bratton ed., 2020). It includes biological, social, emotional and
cognitive forces that triggers the behaviour of an individual. Wal-Mart with the aid of motivation
tries to improve performances of their employees and boost them to work hard to attain set goals.
They utilises following two motivation theories to enhance the working of their company-
Maslows hierarchy of needs- This theory states that there are five categories of human needs
which rule action of an individual (Harvey, 2017). These needs in context to Wal-Mart as discuss
underneath-
Physiological needs: These needs refers to those necessities that are required for human
survival and Maslow has addressed that physiological needs should be given importance before
human proceed to next level for their fulfilment. In this regards Wal-Mart has cater canteen
facilities, homes facilities, health insurance benefits to their employees and enough rest time to
their workers so that they can work efficiently.
8

Safety needs: Safety needs gives emphasis on safety and security of job. Wal-Mart has
provided lockers to their staff members and they have given time to time increments to their
employees so that they can feel safe in terms of financial factor.
Love and belonging need: These talk about relationship and friendship. Company has
maintain healthy work environment so that employees can develop relations with each other.
Esteem needs: Esteem needs give importance achievement feelings and prestige. Wal-
Mart has provided training to its workers in order to build self confidence in their working and it
will make them independent.
Self- actualization needs: These needs discuss about creative activities and achieving
individual full potential. Company has divide its structure in different departments so each
individual of each section can realise in which filled they are good at and work accordingly. This
will also help them to improve skills in which they are not good at (Bellé, Cantarelli and
Belardinelli 2018).
Herzberg- Two factor theory- This theory of motivation says that, there two factors that cause
job satisfaction (motivation factors) and dissatisfaction (hygiene factors) to employees. Hygiene
factors includes safety,salary, working condition and environment which detached individuals
from their jobs (Woodrow, 2017). On the other hand motivational factors provides job
satisfaction and motivate workers for their personal growth. Wal-Mart in this context, have
provided minimum wages to each worker, arranges weekly fun activities to create social
relations among its employees and tries to make workers friendly on job working conditions. In
relation to motivation factors they keep rewarding their staff members for the work they have
done, keeps promoting them so that they can get recognition in company and this has made them
loyal towards their work as well as for the company. Further they keep on providing various type
of trainings to their workers for their advancement and heads of each department is responsible
to supervise all those members who are under them, which will uplift their work.
Corporate example and literature review for justification
Defining and communication of vision: In context if Wal-Mart it use different
leadership styles which helps in smooth functioning of company work. But aspirational
leadership style is best from all of these leadership styles used by company CEO. By using this
leadership style CEO of selected company influence their employees to make a balance in their
9

professional and personal life. Which increase their performance towards achievements of goals.
This style helps in developing vision for effectively achievement of organisational goal. In
context of company, their CEO leadership is known for its innovations and for quality in their
work. This leadership style reduce wastage of resources of company and focus on providing
good quality products at a reasonable price to their customers. According to this objective of
selected company, it can be analysis that Wal-Mart face some problems. Because in review of
some customers, they complain that quality of goods and services provided by the company is
not so good.
Provide suggestion based on discussion & debate which increase organisational performance.
From the above discussion on different leadership and motivational theories used in an
organisation, there are some suggestion which helps CEO of selected firm in achieving
organisation goal. These are discuss below:
 Vision & mission- If company wants that their employees work with their fill efficiency,
so its important for company to clearly communicate its vision to their employees.
Workers of an organisation are work for achievement of company goal if vision of
company is not clear to them, then its not possible to achieve it (Ayman and Lauritsen
2018).
 Organisational culture: Wal-Mart needs to improve its values and beliefs in its
organisation. Selected firm is always criticized on low wages provided to their
employees. Suggestion for this problem is to implement an effective measure for
increasing individual respect in an organisation. Company needs to communicate
properly with their employees and for motivating them provide different kinds of benefits
to them. Which helps in creating good organisational culture.
 Organisation structure- Wal-Mart use hierarchical organisation structure in its
company. It create a gap between top level management and its workers. For an effective
decision making its important for company to use horizontal organisation structure. It
also improve organisation culture and maintain a good relationship between management
and employees.
10

CONCLUSION
From above discussion its can be analysed that for success of any organisation its
important to select a best leadership and motivational style. It discuss different leadership styles
used by a comopany for guiding and motivating their employees towards any task.
Transformational and transactional leadership style helps relevance company in enhancing
efficiency and productivity of their employees. Maslow's hierarchy need theory makes
organisation in better understanding of their employees needs. Which helps in motivating their
employees towards organisational goal. There are many aspects which help organisation in
making strategies for development of organisation. There are also some recommendation for
organisation which help in maintaining organisation culture and reduce wastage in company. All
these tools and techniques used by management of an organisation increase efficiency of their
workers and provide good quality of products to their customers. Which helps company in
creating reputation & brand image in market. A good brand image build customers loyalities
towards company.
11

REFERENCES
Adeoye, O. A., Islam, S. M. and Adekunle, A. I., 2020. Optimal capital structure and the
debtholder-manager conflicts of interests: a management decision model. Journal of
Modelling in Management.
Ayman, R. and Lauritsen, M., 2018. Contingencies, context, situation, and leadership.
Bellé, N., Cantarelli, P. and Belardinelli, P., 2018. Prospect theory goes public: Experimental
evidence on cognitive biases in public policy and management decisions. Public
Administration Review. 78(6). pp.828-840.
Bratton, J. ed., 2020. Organizational leadership. Sage.
Carroll, B. and et. al. 2018. After leadership. Routledge.
Coleman, K. and Stern, M. J., 2018. Exploring the functions of different forms of trust in
collaborative natural resource management. Society & Natural Resources. 31(1). pp.21-
38.
Coleman, K. and Stern, M. J., 2018. Exploring the functions of different forms of trust in
collaborative natural resource management. Society & Natural Resources. 31(1). pp.21-
38.
Fallatah, R. H. M. and Syed, J., 2018. A critical review of Maslow’s hierarchy of
needs. Employee Motivation in Saudi Arabia. pp.19-59.
Garcia, A., Hipel, K. W. and Obeidi, A., 2019. Classifying metarational stabilities in
conflicts. Journal of Systems Science and Systems Engineering. 28(3). pp.265-284.
Guhr, N. and et. al. 2019. The impact of leadership on employees' intended information security
behaviour: An examination of the full‐range leadership theory. Information Systems
Journal. 29(2). pp.340-362.
Hale, A. J. and et. al. 2019. Adapting Maslow's hierarchy of needs as a framework for resident
wellness. Teaching and learning in medicine. 31(1). pp.109-118.
Hart, M. L. and Vavatzanidis K.,2020. Information systems outsourcing and organisational
structure.
Holweg, M. and et. al. 2018. Process theory: The principles of operations management. Oxford
University Press.
Martínez-Costa, M and et. al. 2019. The effect of organisational learning on interorganisational
collaborations in innovation: an empirical study in SMEs. Knowledge Management
Research & Practice. 17(2). pp.137-150.
12