Walmart: Analysis of Key Functions, Organizational Structure and HRM

This report provides a comprehensive analysis of Walmart, the world's largest retail store, examining its key functions and organizational structure. The report begins by exploring Walmart's core functions, including its marketing strategies, such as everyday low pricing, efficient supply chain management, and the use of technology like RFID and cross-docking. It then delves into Walmart's organizational structure, which is characterized as centralized and hierarchical, with elements of decentralization at the store level. The report also examines Walmart's human resource management practices, including planning, recruitment, selection, employee retention strategies, training, and career development programs. The organizational structure is further detailed, highlighting the hierarchical levels from store managers to hourly workers, and the use of divisional and matrix structures. The report concludes by emphasizing Walmart's focus on cost efficiency, customer loyalty, and its commitment to providing goods and services at low prices, supported by its organizational culture and values. The report uses the 4 Ps of marketing mix to analyze the product, price, promotion and place of Walmart.

ORGANIZATION

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
1. Key functions of Walmart with respect to its promotion........................................................1
2. Organizational structure of Walmart.......................................................................................5
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Walmart is the largest and biggest retail store in terms of size, value and has employed
the largest number of employees globally. They are among the most powerful retailers with high
sales turnover and generate high revenue. Company was founded by Moore Walton and James
Lawrence Walton in the year 1962. This organization serves to more than 26 billion customers in
a week and spread out in 28 countries with 11000 stores globally. The success mantra of any
organization is selling quality products at low prices and provide the best services to their
customers
1. Key functions of Walmart with respect to its promotion
The company began with an aim to provide goods to its customers whenever they
require. They keep prices of their goods and services low by directly buying goods from
manufacturer (Johnson, 2016). They attract customers by providing low priced goods. Walmart
is a major name among the one stop shopping center where everything is available from basic
utility items to all luxurious items.
Marketing
The entire system is so well structured and developed and uses an effective and efficient
system of supply chain, which helps in reducing cost of products and deliver low priced goods.
They have few chain links in its distribution channel. Success and growth of Walmart began
when company reduced its supply chain links from its distribution and started purchasing from
manufacturers.
In 1989, Walmart was awarded with the name of Retailer of Decade. The organization
commenced with strategic sourcing in which they gathered information and used that
information to find out the best possible prices of goods from the supplier (Vallesi, 2012). The
company maintains relationship with its vendors with subject to provide high volume, long term
purchase in exchange of low price goods. Smooth flow of communication, suppliers present
globally, proper warehouse facility and maintenance of partnership with vendors helps to provide
goods at minimum prices possible and also in better flow of inventories. Company attracts
customers by proving low priced goods.
The company uses concept of cross docking, which helps them to achieve competitive
advantages. It is the type of logistic operations, where products are distributed directly to a
customer from a supplier or manufacturer in no time and less charge. It is transferring of goods
1

by loading in inbound dock or truck to unloading in outbound truck with any warehouse or
storage charges. Walmart uses the same strategy of cross docking to reduce transportation
charges and eliminate some storage costs. This strategy of routing of products from suppliers to
Walmart warehouse helped in reducing cost and grab competitive advantages (Christopher,
Payne, and Ballantyne, 2013.). The company also saves a lot of cost by ensuring that their
employees travel in economy class thus reducing the traveling cost.
Technology plays a pivotal role in every industry for growth and development. Walmart
has the largest IT infrastructure among the retailers globally. They have installed technology in
such innovative ways, where they can predict demand, easy transportation routes, track their
inventory levels and manage customer relationships. The company uses universal product code,
bar code reader, central database, satellite network. They also use (RFID) Radio Frequency
Identification Tags.
Another factor to be kept in mind is that of location. They look for the best site to open
their stores where customers can reach easily. A good location means easy transportation from
distribution center where minimum cost is there for products. Walmart provides its customers’
variety of products in all types of size and shape, which means that whatever quantity an
individual desire, whatever brand he/she wants, their demands will get fulfilled under one stop
shopping mall.
Marketing mix of Walmart is conducted which contains 4 P's that is product, price,
promotion and place (Bhasin, 2018).
Product
Walmart is one stop multinational retail store providing variety of brands, which a person
needs in his life. From basic utility items to all luxury items are made available to customer at on
store. The products scope from craft, gift, stationary, movies, electronic items, home appliances,
grocery, video games, jewelry etc. They grab attention of customers as Walmart store has
number of sales personnel who are ready to help us find products in store.
Price
Walmart does not produce or manufacture any product. They buy their goods from long
term partnership suppliers in large volume and quantity so that they get effective and minimum
prices. They use different pricing strategies to price their products and also uses various
2

discounting concepts to attract customers. The company uses Everyday Low Pricing and Always
Low Price strategies to attract more people at large. The low price goods and large sales volume
help the company to generate huge amount of profits.
Promotion
Promotional mix consists of selling of products through advertisement, personal selling,
sales promotion etc. The company uses different sources of medium of advertisement like
television, newspaper. They also do store promotion of products by bundling goods of two
different brands together and offering them at discounted price. They also offer its customers
gifts during online shopping. Personal selling, where seller at store influence their customers to
buy in store. 'Everyday low price' is one of the most powerful strategy used by Walmart to
promote its products.
Place
Walmart already has more than 11000 stores, presenting in 28 countries. The store size is
more than 1,00,000 sq. ft. (Bratton, and Gold, 2017). The company is focusing on expansion and
they are planning to expand their business globally. All the stores of Walmart offer similar kind
and same brand of products.
Human Resource Management
Walmart is among the biggest companies in terms of its size, value and financial
performance. Human resource plays an important role in building and breaking of an
organization. So it must ensure that its Human Resource team are happy and satisfied. Walmart
ensures that needs and expectations of its employees (Briscoe, Tarique and Schuler, 2012). A
proper planning, selection, training, development, career planning, and job design would help to
retain employees and have better production.
Planning
Human Resource Planning is done in stratified manner. Planning is done by the top
management. Though, Walmart stores are situated in many countries so for every store, they are
required to appoint a manager to manage this large organization. Walmart uses software to track
the changing workforce. The software collects data from different stores and the results are taken
out from these data which help in evaluating trends in human resource. The trends help to
evaluate the increasing demand in particular region and decrease in demand in other regions.
Walmart store employs right quality and quantity of workers. The company hire and train its
3

employees on continuous basis. There is a good supply of human resource force in the
organization.
Organizational design
Organizational structure of Walmart is centralised and hierarchical. There lies some
decentralisation also but only at some point. All the activities are controlled by the Head of
Departments in centralised system. Every store of Walmart has a HR manager who has power to
take decisions regarding strategies required in an organization. At this point, one can see some
decentralisation concept followed by the company.
Job analysis and job design
Walmart tries to fill the gap between demand and supply of human force. Most of the
employees working at Walmart are related to sales. So Walmart employees people having
profiles related to sales like sales personnel, sales managers, store manager. Job specification at
Walmart requires skills and abilities in sales and marketing. They must have skills to perform
multiple tasks.
Recruitment
The people recruited at Walmart are usually local people who are living nearby the store.
Generally, people are recruited through direct recruitment, online recruitment, or may get select
from colleges. The online method helps people to reach the company from faraway places. They
even appoint people through references. Walmart stores are already operating globally and the
company should try to appoint more diversified workforce.
Selection
Selection process of employees depend highly upon their potential to work and conduct
sales and marketing operations. A check on the educational background, qualification, work
experience and his personal interests must be done thoroughly. A person should possess the right
kind of skills and qualities to be fit for the job. A check on the person’s knowledge to be fit for
the position. A final check on the person's willingness for the job.
Employee retention strategy
To retain the qualified employees, Walmart uses various approaches to attract its
customers. Regular changes in employees will minimise profits of this organization as they may
lose their trained and qualified employees. Walmart retains its employees by providing them
4

security, recognition, benefits, incentives, a position in organization, and appreciating their work
through appraisals.
Employee training
Training is the main part of a job. The training program generally includes teaching about
sales personnel strategies so that the company uses to promote its sales. The company prefers
traditional method of On the job training where employees are taught face to face and ensure
quality of services. The company also collects feedback from various people to ensure
performance of the employees. Walmart conducts programs to improve performance of
employees. The performance can be measured by the performance of sales personnel. Walmart
organises seminars and other programs to train its employees.
Career development
Walmart uses its own training and development program for career development to
improve knowledge, skills and abilities of employees. Career development opportunities are
identified through business processes, expansion plans and job position. When a business
expands, there are chances of more opportunities for any employee.
2. Organizational structure of Walmart
The structure of Walmart is designed in such a way that it manages to offer goods and
services at relatively low price with no concession in the quality. The structure and culture of
Walmart is based on its efficient cost, its logistics, commitment and loyalty towards customers.
Organization’s values, mission, its goal and objectives and vision makes organisational culture.
The organizational structure followed by Walmart is somewhat hierarchical based. The
structure has the features of hierarchy and functional (Burton and Obel 2012.). A hierarchy is the
one in which flow of authority is from higher level to lower level and communication flows from
lower level to higher level. The hierarchical structure has an ability to influence the entire
organization by its managers. It helps in effective controlling and monitoring. When Walmart’s
main headquarters form any policy or strategy, then those strategies and policies are passed on to
all their stores.
Walmart management hierarchy is divided into 3 parts which are as follows: store
manager, in store manager and in store hourly manager. A store manager is the one who looks
after accounts, statistics, reports of the business. He rarely visits the store but keep an eye on the
5

performance and progress of stores. In stores, manager is those who manages the entire store and
it includes general manager, co-manager, and assistant manager. Another type is in store hourly
worker who works all the time on floor and includes cashier, supervisor, and supports manager.
Delegation is distribution of tasks and responsibilities of the top level management to
middle and lower level management in an organization. Though responsibilities are distributed
but the main power remains with the higher authority only(Eagleman,2013). Walmart also used
delegation where the powers and responsibilities are distributed among managers. Delegation
flows from higher level to lower level. The main delegation is in hands of Walton family who
has all the control and authority to carry out all decisions in an organization.
Walmart uses different organizational structure at different levels. At the top level, they
use divisional structure and at bottom level, they use matrix organizational structure. The
important divisions are Walmart retail, Walmart speciality store, Walmart international, Sam's
clubs and super centres. Each store is given enough power, responsibility and resources to
perform their functions effectively with required workforce. The importance of such division is
that organization are able to easily focus on the needs and demand of its customers with them
specialise division.
The divisional structure consists of a head officer or a senior vice president. The Walmart
stores are divided into different districts located in different cities. Every store has a district
manager which is also known as market manager and his work is to manage large stores. All the
store has same type of jobs to perform such as same job analysis, description and specification.
A divisional structure is adopted by those firms and an organization operates on large
scale, when they supply their goods and services to variety of people located in different places
with almost all products which one may be required by everyone (Huczynski, Buchanan, and
Huczynski, 2013). This type of structure is usually used by large organizations which operate in
different geographical areas. The advantages of formation of divisional structure is that
requirements can be met rapidly and distinctively. Organisations are divided into different units
and sub units. Every unit and sub unit has their own managers. This structure helps employers to
concentrate on consumers’ needs, their demands, evaluating competition and encourage reaching
goals and earn profits. Walmart uses this type of structure.
The employees in an organization are structured on the category of product, market and
geographic structure. The product structure consists of people who are specialised in producing
6

particular product and these are grouped under 'product a' 'product b' and 'product c' type. Each
product type has a separate division.
In market structure, employees are classified according to the market in which they
perform. They sell products to individual and organizations. The sales and customer service
sectors are designed using market structure. Walmart also uses geographic structure where
employees are based on geographical location. To make a division, employees of one geographic
location are sorted together.
Divisional structure is well suited for the enterprises such as Walmart, as they allow team
to concentrate on single good or service with support of their managers. This structure has some
weaknesses too. This structure is good for the top level but may fail for specialist, a manager of
US Walmart cannot work for Sam's club.
CONCLUSION
Walmart is a leading retail store operating in many countries across the globe. They
operated in hyper markets discounts, groceries, e-retail etc. They sold quality goods at cheapest
price because of their strong market position. A super supply chain management system helped
to remove retailers and wholesalers, thus allowing company to directly deal with manufacturers.
This helped in removal of extra cost and added up to generate more revenues.
Walmart has been maintaining a good position in the market through its strong logistics
and distribution channel system. Walmart is now focusing on providing better online services to
its customers and other e-commerce websites. They improved their apps and websites so that
customers can easily reach them and stay connected with them. Walmart used a divisional
structure which helped to operate effectively and efficiently in different geographical boundaries.
The company used customer attractive promotional technique of Always Low Price and
Everyday Low Price to attract large number of customers.
7

REFERENCES
Books and Journals
Johnson, T.J., 2016. Professions and Power (Routledge Revivals). Routledge.
Vallesi, A., 2012. Organisation of executive functions: hemispheric asymmetries. Journal of
Cognitive Psychology. 24(4). pp.367-386.
Piercy, N., 2014. Marketing Organisation (RLE Marketing). Routledge.
Briscoe, D., Tarique, I. and Schuler, R., 2012. International human resource management:
Policies and practices for multinational enterprises. Routledge.
Bratton, J. and Gold, J., 2017. Human resource management: theory and practice. Palgrave.
Singh, M., 2012. Marketing mix of 4P’s for competitive advantage. IOSR Journal of Business
and Management. 3(6). pp.40-45.
Eagleman, A.N., 2013. Acceptance, motivations, and usage of social media as a marketing
communications tool amongst employees of sport national governing bodies. Sport
Management Review. 16(4). pp.488-497.
Christopher, M., Payne, A. and Ballantyne, D., 2013. Relationship marketing. Routledge.
Cosh, A., Fu, X. and Hughes, A., 2012. Organisation structure and innovation performance in
different environments. Small Business Economics. 39(2). pp.301-317.
Huczynski, A., Buchanan, D.A. and Huczynski, A.A., 2013. Organizational behaviour (p. 82).
London: Pearson.
Burton, R.M. and Obel, B. eds., 2012. Design models for hierarchical organizations:
computation, information, and decentralization. Springer Science & Business Media.
Online
Bhasin, H, 2018. “Marketing Mix of Walmart” [Online] Available through
:<https://www.marketing91.com/marketing-mix-walmart/>
8

9