Strategic Management and Ethical Challenges: A Case Study of Wal-Mart

This report provides a comprehensive analysis of Wal-Mart's strategic management, focusing on its application of the Value Discipline framework, ethical considerations, and knowledge generation processes. It examines how Wal-Mart utilizes knowledge for strategy formulation, implementation, and control, highlighting the importance of its values in strategic decision-making. The report details Wal-Mart's strategic framework, particularly its emphasis on operational excellence, low prices, and customer relationships. It also identifies ethical challenges related to employee treatment, labor practices, and international business expansion, including recommendations for ethical decision-making. Furthermore, the report explores how Wal-Mart generates knowledge in a globalized and non-linear environment, emphasizing the role of technology and customer feedback in its strategic planning. The report concludes by discussing Wal-Mart's short-term and long-term goals, including its shift towards e-commerce and expansion into emerging markets, all driven by the company's mission to save people money and improve their lives.

Business Management
and
Strategic Management
Contents

1
Introduction................................................................................................................................1
Company’s use of strategic framework......................................................................................1
Recognising strategic decisions that presents ethical challenges...............................................3
Knowledge generation in globalised and non-linear environment............................................5
Conclusion..................................................................................................................................5
References..................................................................................................................................6

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Approach to strategic management of knowledge and organisational learning
In today’s time knowledge has become the greatest power any organisation has. At the same
time organisation keep trying that its strategic management is done with the help of
knowledge base they have on the basis of the criteria for knowledge management they have
made. In this regards a highly critical role is played by the skill development initiatives and
the employee’s commitment towards their own personal development (Uygur, 2013). Every
organisation uses their own strategic framework and tools to improve their standards of
operations. In this regards an effective, short and long term goals are made by the firm. Since
strategic decisions in today’s time is facing ethical challenges hence companies needs to
work on different parameters to enhance the standards of ethical decision making especially
when it comes to exploiting international business opportunities. Wal-Mart is one of the
biggest retail organisations in the world that is operating a chain of hypermarkets, discounted
departmental stores as well as grocery stores. This company is operating in 27 nations with
55 different names having more than 11,368 stores and clubs. Being such a large organisation
automatically enhances their need for knowledge management. This report will analyse the
different aspects of knowledge management. It will also explain the condition of the company
utilising any strategic framework. It also recognises the strategic decisions that present the
ethical challenges and hence providing recommendations for ethical decision-making. At last
the way in which knowledge is generated in a globalised and non-linear environment is
illustrated in this report.
Knowledge is an integral part of any organisation. It has a critical role in making different
strategies. Every company utilises different strategic tools and framework to make strategies
that helps in their development and growth. The way in which an organisation manages its
knowledge plays a critical role in strategizing. For instance the past experience or the data
that is collected through different operations are evaluated to know the condition of the
environment and market mood based on which future strategies are made or changes in the
current strategies is being done. Since Wal-Mart has its operations in different parts of the
world hence it is critical that they manage the KM function with at most importance.
Knowledge is utilised within Wal-Mart for strategy formulation in terms of the fact that all
the decisions are made on the basis of the information they have collected over the years
(Progressivegrocer, 2015). They implement strategy with the help of knowledge as they
check every aspect of the strategic success chances on the basis of the information available
with them. At the same time knowledge helps Wal-Mart to control its strategies. This can be

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understood in terms of the fact that knowledge that is gathered in due process allows
companies to make changes in the strategies which helps in controlling the overall strategy
making process.
Wal-Mart understands that the numbers of stakeholders that are attached with their firm is
quite large and any strategies that they make have a significant impact on these stakeholders.
In this regards the values that company has developed for itself plays a critical role in making
of the strategies. It is due to this that they make the strategy development process according
to the values of the firm. The strategic framework that Wal-Mart utilise is Value Discipline
(Tedder, 2018). Following this strategic framework this company focuses on the areas where
they are already good. In this process they select major value discipline for their firm and
ensure that they have sufficient component in their strategy so that their major value
discipline gets boosted. By doing this with the help of the knowledge they have they assess
that whether the strategy made by them aligns with the stated competitive focus. They use
this strategic framework for enhancing their operational excellence. For instance they provide
high quality products at the prices that are relatively lower than any of their competitors.
They also ensure that their strategies act as a lowest barrier to purchase. This firm focuses
internally on streamlining their processes so as to ensure that they make fewer errors as much
as possible both in terms of products as well as services. This is also illustrated from their
strategies of standardisation and enhancing of their economies of scale. These two are the
major procedures that help them in remaining ahead of their competitors.
Using this strategic framework they try to keep the feelings of their consumers as their
priority since they are most critical for the success of the company. This firm continuously
utilises the knowledge available with them to meet the requirements of their customers and
hence provide them with products that gives them maximum value. They use their knowledge
for making long-term customer relationship with their customers with the help of the
attractive and long lasting strategies. This is also illustrated in their intensive customer
relationship management process. There are other aspects of this framework like product
leadership (Boughzala, 2011). Value discipline is one of the critical frameworks that suggest
focusing, focusing and even more focusing on strengths. Since this framework suggests that
for success only one type of business model is sufficient hence it is critical that company
diverts all their energy into this approach hence minimising distractions and maximising
resources. For using value discipline as a strategic framework, this firm has brought
flexibility in their operations and strategy making process. This also helps them in controlling

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the operations however large it is. Since Wal-Mart is in the industry where the similar
product is sold multiple times and in multiple ways hence this framework adds more values
to their strategies. In their next three years strategic framework also this can be seen. For
instance they are planning to improve the in-store experience along with enhancing their
supply chain capabilities so as to lower down their costs as well as establishing meaningful
digital relationships with their customers. For this they are inviting as many customer’s
feedbacks as possible (Bashouri & Duncan, 2014). Since the currency exchange rates are
fluctuating at higher speed and there is expectation that net sales growth will remain to be flat
hence enhancing the operational excellence has become very much critical for the company.
For this each of their strategies are looking for higher use of technology.
It is to be understood that strategies are usually made keeping the mission and vision of the
company as a path bearer. The mission of the company is to save the money of the people so
that they can live a better life (Feguson, 2019). Their strategic decisions are just the
manifestation of this mission statement. This is often reflected in their strategy of lowest
pricing in the market so as to attract as many people as possible. This is the major reason for
their success over the years.
Their short term goals are to implement technology in each of their operations that can help
in enhancing the performance of the overall organisation. Its short term goals also include the
skills development initiatives that assist in improving the overall operational efficiency of the
organisation. Their short term goals include enhancing the profit margins by reducing the
errors in different operations (He, Wang & Akula, 2017). Their long term goals include
incorporating advanced technologies in organisational operation that might help them in
enhancing the overall effectiveness of the workplace which is critical for the success of the
organisation. Shifting towards the e-commerce business and reducing the stake in the brick-
mortar business is another important initiative that is taken by the company in the long run.
E-commerce market is growing every day and hence it is forcing the firms to make sure that
they have a strong strategy for their future e-commerce related initiatives. This is done by the
company to enhance the overall value of the firm and to compete with the companies that
have already excelled in the e-commerce retail market. Long term goals of the company also
include expanding in the new markets especially the emerging ones.
This company makes each of their strategies on the basis of the knowledge and experience
they had in the past. A long term planning and orientation is developed by the company to

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ensure that they do not fail to address any point that may harm the strategies made by the firm
(Madden, 2012). Strategic decisions must be scrutinized under the ethical aspects attached
with it. Since the numbers of stakeholders that are attached with the firm is quite large hence
it is essential that the firm looks towards the ethical perspective of each of their decisions as
well. This will ensure that the challenges related CSR and unethical behaviour of the people
does not arise. Since Wal-Mart is facing tough competition from their rivals hence it should
ensure that company should not lose their value in the market just because of ethical and CSR
concerns (Leidner, 2010). Company must always look for the ethical decision making. This
will improve the way in which an organisation is presenting them in the market and has a
greater impact on the success of the strategies.
Strategic decision of the Wal-Mart to not exceed the employee strength even when they
required it at various stores was one of the major ethical mistakes they have done. This is
illustrated with the fact that managers at their stores pushed the workers to work for extra
hours. Many of their employees reported that their managers wanted them to work even after
the shift timing. They closed the doors and pushed them to work even after making the
punch-out. Employees were asked to complete their given task off the clock when they were
unable to complete it on time (Frynas & Mellahi, 2015). Their strategic decisions such as not
promoting women workers to the managerial positions are one of the ethical challenges that
they faced in terms of managing the sex equality at the workplace. Even this discrimination
was seen in terms of pay scale.
Similarly in order to reduce the cost of their health benefits that they provide to their
employees, they recommended their board of directors to hire part-time employees. At the
same time they have kept their labour cost on the lower side. A battle is also going on
between the management and employees for creating a Union that could protect the rights of
their own. They discourage such practice by firing people who supported such unions (Slater,
Olson & Eibe Sørensen, 2012). They used the campaign of “Roll Back the Prices” but again
it came by sacrificing the benefits of their employees. They started using lots of third part
contractors to hire for different jobs such as hiring janitors for cleaning the stores afterhours.
This came to highlight when a federal agents from the Immigration Service raided Wal-
Mart’s 60 stores in the operation named “Operation Rollback”. Some illegal aliens filed a
lawsuit that company did not paid them for working in the night. They also faced charges
against the labour laws as they violated many of those.

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In terms of making strategies for exploiting the international business opportunities including
foreign entry strategies and international location of production there are many ethical
challenges that occur. First is the fact that company has to follow all the labour related laws
and also the contacts that Wal-Mart will make at the time of expansion needs to be done very
carefully (Bloom, Genakos, Sadun & Van Reenen, 2012). For instance in their expansion of
China, this company had to promote the Union which it does not support in any other part of
the world (Krusekopf, 2010). Along with this companies also face ethical challenges in the
form of payments that it does to the landowners especially in giving compensations for
farming lands. Human right laws and the challenges related to corruption are also playing a
significant ethical issue in the foreign market expansion. Disrespecting the culture is again a
major ethical concern that any company has to face while making an expansion.
Based on this, it is recommended that already Wal-Mart has faced ethical issues such as
Human Rights Violation and labour laws hence they must make a strategic framework where
they look at each of their strategies so that labour related laws does not come up (Corporate.
Walmart, 2019). In this regards the strategies like equal treatment to all the employees
irrespective of their differences can be an effective strategy. Along with this the strategy of
participatory management in the human resource will allow the company to ensure that all the
needs and requirements of human resource are fulfilled. In exploiting the international
business strategy it is critical that this firm uses more technology in their operations so as to
avoid ethical concerns due to human errors. They must also make the strategy of flexible
corporate structure. This is critical for the managing the challenges related to business. The
use of knowledge management systems will allow the company to make strategies that are
more accepted in different parts of the world and will be able to avoid the ethical concerns
attached with the company.
Sustainability strategy will also help the company to make use of their resources in an
appropriate manner while taking the stakeholder’s interests as their base. Cultural strategies
such as recruiting more numbers of people from the native state and incorporating the local
values in the business model can help the company is avoiding such legal concerns. In the
training program also they must make strategies that incorporate cultural training (Bourdon,
Kimble & Tessier, 2015). For instance strategies related to the communication management
requires cultural aspects to be incorporated. This can be understood in terms of language
training and cross cultural teamwork training as in both of these there is a need of putting the
local culture at the top. Strategies such as skill development initiatives especially in terms of

7
leadership development programmes will help the company to achieve the long term success
in achieving their objectives. Since Wal-Mart has lot of their stakeholders attached with their
operations hence strategy management with the help of these stakeholders is highly critical
(Grant & Baden-Fuller, 2018). Company should make knowledge management strategy that
ensures that the knowledge is generated, shared and retained. For this Wal-Mart must
promote research and development skills this will help the company to create new
knowledge. For sharing of the knowledge company should provide platform to the
stakeholders where they can share their knowledge. Each of these needs to be documented
with the help of the data management systems. This will help in avoiding ethical situations
such as international expansion. The better the strategy, the better is the chance that they will
be able to take the advantage of the strategy. For instance Wal-Mart’s strategy to acquire
Flipkart in India has helped them in grabbing the larger part of the market in the nation
(Bernon, Baker, Mena, Palmer, Skipworth, Smart & Templar, 2017).
Business environment is becoming non-linear day by day. Due to this there is fluctuation in
the impact that is posed by the factors of the global business environment. In the non-linear
environment, it is difficult to manage the operations especially when it is a globalised world.
In this even the smallest change in the environmental factors in any part of the world will get
reflected in the external environment in other parts of the world (Bhat, Sushil, & Jain, 2011).
The knowledge generation is done in terms of innovating products or services. In this process
new knowledge gets started. In today’s time everything even the small changes are recorded
and hence act as knowledge for their future operations. Since the companies like Walmart has
their business in different parts of the world hence the data related to the business gets
generated from all across the globe. When all this data gets combined it acts as knowledge for
the company. This can be done through the knowledge management systems. Since
operations are interwoven hence knowledge can be generated from any source (Mir,
Kashyap, Mir & Gritsch, 2015). For example Wal-Mart’s technology related problems
generated in any part of the world and the initiatives that is taken at the local level acts as a
knowledge base for its operations in other parts of the world. Another example is that the
initiatives taken by the management to handle more numbers of customers at any store in any
part of the world can act as a knowledge base based on which they can manage such crowd in
an effective manner in other parts of the world. Knowledge is also generated in terms of the
fact that changes in the environment in different parts of the world can be noticed and the
initiatives taken by the company in this regards acts as source of knowledge. Wal-Mart’s

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initiatives such as skill development program and innovation program also acts as a source of
knowledge. For instance the workers that are from different parts of the world have different
kinds of knowledge with themselves. This cultural differences and their knowledge can act as
a knowledge base for the company (Kabir, 2013). This kind of knowledge generation can act
as a best way of improving the employee effectiveness. Intellectual capital and social capital
has a critical role in this as it promotes people to work together while sharing their
knowledge. This is because it promotes exploration, exploitation, disclosure and
measurement through the human relationship within the organisation. This enhances the
communities of practice as everyone learns new things and shares it with others. This
improves the overall effectiveness of the organisation.
In conclusion it can be said that Wal-Mart is one of the biggest retailers in the world. The
strength of the strategy made by the company has a critical role in the success of the
organisation. The strategic framework that is used by the Wal-Mart for making its strategies
successful is value discipline. Knowledge is maintained by the organisation with the help of
data management system and it has a critical role in the development of the strategies.
Strategies such as cost management strategies and the strategies related to acquisition of
lands and properties along with human resource management create an ethical challenge for
the company. Apart from this, non-linear nature of the environment creates new challenges
for the company and the initiatives needs to be taken against it which might promote
knowledge generation.
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