Report on Managing Organizational Change at Walmart: Restructuring

This report analyzes the organizational changes at Walmart, focusing on its restructuring efforts to streamline operations and integrate jet.com. It explores the company's hierarchical and functional organizational structures and the challenges posed by global business dynamics and e-commerce competition. The report applies theoretical frameworks such as the Open Systems theory, Force Field Analysis, Burke-Litwin Model, and Leavitt's Model to understand the change process. It details the stream analysis process used for restructuring, including goal setting, team building, and role analysis. The evaluation of the change process highlights the importance of stakeholder understanding and the need for communication and incentives to manage resistance. The report recommends clear communication and employee incentives to facilitate future organizational changes and improve performance.

Managing Organizational Change, Walmart 1
MANAGING ORGANIZATIONAL CHANGE: WALMART
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Managing Organizational Change: Walmart
The company
Walmart Stores Inc. is one of the biggest retail stores in the world with its footprints
witnessed in many countries across the globe. The first Walmart store opened its doors to the
public in 1944 in Arkansas, the US and later the company gradually but steadily spread its
tentacles across the globe to the current status in which its stores can be found in almost all the
countries in the world. The founder, Stuart, steered the company from inception to 1970 when he
floated its shares on the capital markets, and it became a publicly owned limited company
(Walmart 2017).
Organization Challenge: Restructuring
The retailer’s organizational challenges involve the need to restructure its US operations
in such a way that it reduces its business to four from the current six business divisions. The
restructuring is driven by the global business dynamics and a need to successfully integrate its
latest acquisition, jet.com, into the company’s folds. Walmart acquired jet.com in a bid to
increase its presence and market share in the online retail business.
The organizational structure at Walmart is both functional and hierarchical. In
hierarchical organizations structures, every employee has a supervisor except the CEO, and
decisions made at higher levels are cascaded down to the person operating the stores through this
command chain (Diefenbach 2013). On the other hand, the functional organizational structure at
Walmart means that workers are grouped into teams performing a specific function. The
organization structure needs to be reinvigorated to make the company more efficient in taking
advantages of the available opportunities (Lombardo 2017).

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Theoretical framework
Open System’s theory
The proponents of the open systems theory state that organizations exist and are affected
by the environment in which they operate, which includes the employees and the customer. In
the case of Walmart, it exists in an environment characterized by the availability of low wage
labor and expensive products. The company capitalizes on the prevailing environment to provide
high-quality products at rock bottom prices.
Force Field Analysis
The restructuring of the organization will affect the company’s labor force in various
ways. First, the restructuring inevitably results in the creation of new positions and removal of
some older ones. Second, there will be a need to integrate management teams. Finally, the lost
positions will not equal the newly created ones meaning that some jobs will be lost in the
restructuring process (Ferguson 2017).
The Burke-Litwin Model of Organizational change
The Model of Organizational change differentiates between transformational change and
transactional change. According to the theorists, the development interventions directed at
systems and management processes result in transactional change. On the other hand,
transformational changes result from efforts aimed at affecting the organization’s culture, its
mission, and leadership.
Walmart experiences weakness in both the transactional and transformational levels. To
effect changes in transactional level, the company needs to improve on its leadership and
strategy, while the transformational changes will only result from a focus on improving its
customer relations and increasing the company’s customer base.

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Leavitt’s Model
Leavitt’s Model is an organization development model which holds that in an
organization, there are various interdependent factors which are responsible for the functioning
and development of the organization. The factors are categorized into variables, and they include
Task, technological, human, and the structure variables. In Walmart, the organization faces
heightened challenges due to the advances in information technology sphere which are favoring
organizations like Amazon which can react very fast to the introduction of new technology such
as e-commerce
Change Process
Walmart uses the steam analysis process in the restructuring process to ensure that the
new system integrates successfully into the whole organization structure.
Figure 1 Stream analysis
The first step started with goal setting where the people charged with the project
identified the overall goal and objectives of organizational restructuring. Secondly, the team
engages in team building and clearly defining their roles, responsibilities, and expectations.
Third, the team determines the needs of the company and does a comprehensive role analysis to

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ensure that it will serve the identified needs. The fourth step involves researching and surveying
the issues involved with the new roles and getting feedback from the relevant people.
The next step involves the establishment of the command hierarchy for the restructured
leadership model to prevent work conflicts between the role holders. Clear communications and
reporting hierarchy are essential to ensure efficient operations of the restructured model
supporting it achieve its goals. Finally, there is a need to train the occupants of the new roles to
enhance the proper functioning of the individuals in their respective positions. The training is
especially essential in the case of the employees dealing with new information technologies.
Evaluation of the Outcomes of the Change Process
The change process has been without a hitch so far as the workers, management and the
shareholders understood the fact that change was needed to stem the poor run in profitability
over the recent past. Also, the stakeholders realized that the company was faring badly on the e-
commerce side and was lagging behind retail giants such as Amazon (Cheng 2016). The loss in
the market share meant a similar fall the company’s profitability and ultimately affected the
shareholder value. All these factors ensured less resistant to the structural changes proposed
(Noel & Hulbert 2011).
Recommendations
Changes are difficult to implement as some people who feel they might be affected
negatively by the proposed changes might resist its implementation (Managing Organizational
Change 2017). The easiest way to overcome resistance to future changes in the future is to
ensure that there is adequate communication on the proposed changes, its goals, the positive and
negative effects on the individuals and the whole organization (Wessels 2014). Once the
stakeholders buy into the idea of the proposed changes, it is easier to implement the same with

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little resistance. Another recommendation for the company is to use incentives for the worker to
encourage them to embrace changes. The recent announcement that the company will increase
the workers’ pay is a welcome incentive and will not only make changes bearable but also
motivates the employees to perform better at their tasks.

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References
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