Analysis of Walmart's Action Control System and Recommendations

This report provides a comprehensive analysis of Walmart's action control system, examining its effectiveness across strategic, tactical, and employee levels. At the strategic level, the report assesses Walmart's compliance with corporate laws and governance principles, suggesting the implementation of a nomination committee and diversification strategies. Tactical and operational controls are evaluated, with recommendations for adopting a feed-forward system and team-based reward plans to enhance competitiveness. The employee level controls are also considered, highlighting existing initiatives and proposing enhancements such as standardized performance forms, staff handbooks, and regular social events to foster engagement and improve overall performance. The report emphasizes the importance of these controls for achieving organizational goals and objectives, and also includes references to academic literature that supports the analysis.

Running head: ACTION CONTROL SYSTEM FOR WALMART 1
Action Control System for Walmart
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Institution

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7. 1 Control at Strategic management level
Walmart is in compliance with requirements of the corporate laws given by compliance
with Company Act and US SEC rules. It has embraced best practices utilizing the corporate
governance principle. It is suggested that Walmart has to embrace the nomination committee to
guarantee meaningful deliberation on future needs of its leadership. Shareholders need to elect
directors with competence and required knowledge and skills to meet future needs. The firm
should both diversify product mix and engage in service business. Walmart’s nomination
committee should have three non-executive directors and should be meeting thrice a year to
ensure effectiveness. Walmart should take the advantage of its clear mission statement to drive
its future diversification. Diversification will see Walmart boost the variation and scope of
business hence become more competitive but this will need no additional non-executive directors
hence no additional costs (Merchant & Van- der -Stede, 2012). The firm should induct the newly
elected directors. The firm should monitor and evaluate the performance of each director through
the board. They need to use performance-based compensation packages for executive directors.
Having CEO and chairman in Walmart gives effective control at the top. I am gratified by
Walmart’s use of stock options based on prolonged period of investment to evade short-termism.
Walmart should use measures like EPS and ROI to guard on incentives attachment to few
financial performance measures. Balance scorecard should be used to integrate broader
performance to drive sustainability in growth. Walmart to use productivity measures including
sales per square of occupied area, quality of work life measures as employee turnover and repeat
business from customers as a measure of customers’ satisfaction. Such controls will guarantee
achievement of goals and objectives.
7.2 Controls at Tactical and Operational Management level

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Walmart will be more competitive at its conventional part when it adopts stringent
controls to attain target of sales. The rolling sales budget will be effective done per month and be
reviewed duly at the level of management. Walmart must adopt feed forward system instead of
its current feedback well designed for quarterly review of real sales against budgeted sales. This
will unravel variations to inform corrective measures (Korhonen, Laine & Martinsuo, 2014). The
workload will hence rise in the tactical management. Implicit cost will ensue to demonize
individuals since extra burden requires probe for full account. Walmart will need to segregate
duties and restrict over decision-making authority. The Walmart should adopt team rewards
plans rather than current individual sales reward. Wider performance criterion should inform the
group reward based on volume of sales and quantity of clients handled and received complaints.
7.3 Control at Employee Level
Walmart has effective initiatives that will help propel it if well managed. The company
has correct recruitment and selection, better policies for hiring, standard application form for
employment, and many other proper schemes. Small alterations are proposed. Walmart needs to
usher in standard performance form for evaluation, handbook for staff, and written affirmative
action schemes agreed and signed by each employee and standard administrative controls.
Besides people control, Walmart should introduce regular firm-wide sponsored social events,
meetings, orientations programs and occasional training, effective employee engagement in
decision making process and group reward systems (Davila, 2005). These novel controls require
time, cost and effort. Walmart will benefit after establishing them as they will only consume less
resources. Walmart operates within relative sturdy surrounding and hence, establishing these
control will only be one time effort and cost albeit enduring gains.

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References
Davila, T. (2005). An exploratory study on the emergence of management control systems:
formalizing human resources in small growing firms. Accounting, Organizations and
Society, 30(3), 223-248.
Korhonen, T., Laine, T., & Martinsuo, M. (2014). Management control of project portfolio
uncertainty: A managerial role perspective. Project Management Journal, 45(1), 21-37.
Merchant, K.A. & Van der Stede, W.A. (2012) Management Control Systems, 3rd edition,
Prentice-Hall.