Organizational Behavior Analysis: Walmart's Strategic Challenges

This report analyzes the organizational behavior of Walmart, focusing on its hierarchical functional structure and its excessive dependence on Chinese imports. The report identifies key influencers within the company's management responsible for this dependency and discusses the negative impacts, including sensitivity to dollar value changes, job displacement in the US, and potential harm to the customer base due to trade tariffs. The analysis highlights the company's growing trade deficit with China and its position in the US-China trade war. The report recommends shifting focus to other Asian manufacturing markets, diversifying operations to reduce currency risks, and potentially restructuring the executive management team to address the challenges. The conclusion emphasizes the need for a shift in the thought process of managerial position holders to navigate the intensifying trade war and maintain relevance in the US retail market. References from various sources are also included in the report.

Running head: ORGANISATIONAL BEHAVIOUR
Organisational Behaviour
Name of the Student
Name of the University
Author Note

1ORGANISATIONAL BEHAVIOUR
Table of Contents
Introduction:...............................................................................................................................3
Organizational Profile:...............................................................................................................3
Discussion:.................................................................................................................................3
Recommendation and Conclusion:............................................................................................4
References:.................................................................................................................................5

2ORGANISATIONAL BEHAVIOUR
Discussion:
The structure of the selected retail giant is observed to be hierarchical functional in
nature. The board of directors headed by the chairman, Gregory B Penner is observed to be at
the top of its hierarchy and the executive management of the company is currently headed by
Doug McMillon, the president and the CEO of Walmart Inc (Corporate.walmart.com, 2020).
The main influencers from the part of the company’s managerial position holders responsible
for the excessive dependence of the company on China for importing goods are the CEO,
Doug McMillon, the chief financial officer of the company, Brett Biggs and Dirk Van den
Berghe, the Executive Vice President, Global Sourcing and Regional CEO – Asia. The trio
have sound knowledge regarding the low cost manufacturing in the China and that influenced
them to put strong emphasis on importing goods from China (Corporate.walmart.com, 2020).
As the organization excessive depends on China for importing goods and manufacturing, the
success of the business entity is observed to be largely sensitive to changes in the value of
dollar (Bohatala.com, 2020). The strong value of dollar results in low profit margin for the
company and with sharp rise in the value of dollar in modern international market, the
company’s margin of profit has gone down rapidly (Huang & Kishor, 2019).
The excessive dependence of the company in the Chinese imports has approximately
displaced 200000 jobs in United States and that has certainly raised eyebrows of considerable
number of US diplomats and trade analysts (Epi.org, 2020). The excessive dependence of the
company has the potential to hurt the company’s customer base as well as US President
imposed a 25% tariff rate on the Chinese manufacturing goods (Industryweek.com, 2020).
Along with that, the growing trade deficit of the company with China is expected to displace
400000 US jobs and that is considered to be the fundamental factor that contributed to the
placement of the company as the epicentre of US China trade war (Epi.org, 2020). The

3ORGANISATIONAL BEHAVIOUR
company itself and various other suppliers of it, largely depends on China for importing
goods and manufacturing. As a result, the business actions and the financial growth are
exposed to frequent changes and that affects the financial sustainability of the organization in
a detrimental manner.
Recommendation:
The fundamental recommendation for the company is to shift their focus to other low
scale Asian manufacturing and import market for the management of their business activities
and for importing the goods. An important technique will be to distribute the important
operations amongst multiple nations to reduce the impact of the currency rate change on the
company’s business actions. Hence, it is understandable that the company requires to avoid
excessive dependency on China for the manufacturing and import of goods through
distributing the process amongst multiple number of nations and through operating in a
substitute low scale Asian market. It is controversial to state that there is a need of
restructuring in the executive management team of the company for tackling the challenge
arising from the excessive dependence of the company on the Chinese imports. Having said
that, a shift in the thought process of the managerial position holders is much required for the
company as trade war between China and United States in getting intensified with each
passing day. In one of the interviews, the Chief Financial Officer, Brett Biggs has clearly
stated that the company is looking for alternative options to shift their substantial import
orders and manufacturing from China as that is much required to ensure that they maintain
relevant in the US retail market (Nbcnews.com, 2020).

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References:
Bohatala.com (2020). Walmart Organization Challenges And Organizational Change
Analysis. Bohat ALA. https://bohatala.com/walmart-organization-challenges-and-
organizational-change-analysis/.
Corporate.walmart.com (2020). Leadership. Corporate - US.
https://corporate.walmart.com/our-story/leadership.
Epi.org (2020). A Conservative Estimate of ‘The Wal-Mart Effect’: Wal-
Mart’s growing trade deficit with China has displaced more than 400,000 U.S. jobs.
Economic Policy Institute. https://www.epi.org/publication/the-wal-mart-effect/.
Epi.org (2020). The Wal-Mart effect: Its Chinese imports have displaced nearly 200,000 U.S.
jobs. Economic Policy Institute. (2020). https://www.epi.org/publication/ib235/.
Huang, A., & Kishor, N. K. (2019). The rise of dollar credit in emerging market economies
and US monetary policy. The World Economy, 42(2), 530-551.
Industryweek.com (2020). Walmart’s Supplier Says Chinese Factories in ‘Desperate’ State.
IndustryWeek.
https://www.industryweek.com/supply-chain/article/22027893/walmarts-supplier-
says-chinese-factories-in-desperate-state.
Nbcnews.com (2020). Walmart says higher tariffs on China goods will increase prices for
U.S. shoppers. NBC News. https://www.nbcnews.com/business/consumer/walmart-
says-higher-tariffs-china-goods-will-increase-prices-u-n1006366.
Walmart.com (2020). Walmart.com | Save Money. Live Better.. Walmart.com. (2020).
https://www.walmart.com/.