From this case material we could also note that Walmart purchased substantial levels of items from its suppliers to form scale market, and with the reliable stock control system supporting make its operating costs lower than those of its opponents. It also brought in many goods from China, "the world factory" because of its low priced. So in short the company-level strategy of Walmart is low priced and low cost, with little differentiation strategy.
Managers take part in three degrees of tactical planning (Gary Dessler, 2005): the corporate-level strategy; the business-level strategy and the function-level strategy. The practical strategy should serve the overall company strategy so the commercial strategy could be applied more effectively and efficiently. As for Walmart, its corporate-level strategy and business-level strategy, even as examined above, is the reduced cost management. Then we'll focus on its functional strategy, especially its HR strategy. Aside from the above factors, Walmart creates its low priced leader on work policies that help it to achieve extraordinarily low work costs. Through low-cost HR activities, Walmart tried out to keep up its predominate competitive benefits.
Part 2: The research of HR policies at Walmart and its own integration with Corporate Strategy.
The basic premise that underlying SHRM is that organizations adopting a specific strategy require HR methods that will vary from those required by organizations adopting alternative strategies (Jackson&Schuler, 1995). Generally, there are three SHRM theoretical models in the study of this self-discipline: the universalistic guidelines, the contingency perspective of "best fit" and the resource-based configuration perspective. Here I'd not deliberate on each one of these three models to examine the HR methods at Walmart, but just choose the contingency point of view of "best fit". With this view, the individual HR techniques will be chosen predicated on the contingency of the precise context of any company. Like the Walmart has different commercial strategy with those merchants with differentiation strategy, that actually cultivates the principal contingency element in the SHRM books. What's more, we should be reminded that the individual HR tactics will connect to firm strategy to bring about organizational performance, and simply for this interaction results make the "universal best practices" may not apply so well in a specific company. Within the above part we have put great emphasis in figuring out and analyzing the principal contingency factor of Walmart's corporate strategy, so in the following part we'll take a look at the "fitness" of HR procedures in Walmart with this theoretical model, which is actually also the integration process of HR routines with the contingency factors to some extent. As there are the HR plans and activities (such as the way the company recruits, selects, and trains and rewards employees) that comprise the HR system itself, here we're able to demonstrate the integration simply by the series of the HR activities.
From the recruitment Walmart has tried its best to decrease the cost considering so big number of its employees. For instance, the brand new York Times (January 2004) reported on an interior Walmart audit which found "extensive violations of child-labor laws and regulations and state regulations requiring time for breaks and meals. " The cheap price of children labors and minors make it earn more cost competitive advantages over other companies. Walmart also confronted a barrage of lawsuits alleging that the business discriminates against personnel with disabilities, for the recruitment of these guys means providing more facilities for them and the lost of efficiency to some extent.
From training point of view, Walmart identifies its employees as "associates", and motivates managers to think about themselves as "servant leaders", that is, to cause them to become provide others while remaining focused on getting results good organization's prices and integrity. An organization's strategy necessitates behavioral requirement for success, and the utilization of HR practices in the organization can reward and control staff behavior, which means organization should put into practice HR practices that encourage the staff behaviors that are consistent with the organization's strategy (Delery, John E; Doty, D Harold, 1996). Through this training and encouragement, Walmart tried to modify the employee behaviors and competencies from what the company's strategy requires, that is to low down cost more. This reasoning also is embodied in its "lock-in" of its night time shift in a variety of stores. Through this enforced insurance plan, Walmart tried to avoid "shrinkage" action of its employees, to eliminate unauthorized cigarette breaks or quick excursions home.
From the performance management perspective, Walmart made very high demanding benchmarks and job designs. The New York Times reported Walmart experienced comprehensive violations of state regulations needing time for breaks and dishes. And there are so many cases of minors working too later, during school hours, or for too many hours in a day, for the performance appraising just drive them to do so. In the Profession management, Walmart also goes great lengths to reduce cost, there are many cases that women sued Walmart for its discriminated plan against women by systematically denying them special offers and paying them less than men. Women are pushed into "female" departments and are demoted if they complain about unequal treatment just for more cost reduction against its challengers.
From the reimbursement management point of view, Walmart has also showed very aggressive HR policies and activities to fit the "low-cost" strategy. Walmart brought in $15 billion price of goods from china, not limited to the strategic consideration of supplier chain current economic climate, but also Walmart has some factories in china, whose products are brand with Walmart name. With this method, Walmart pays much less to Chinese labors in this "world-factory" and earn some advantages, so we could just see how the Walmart corporate and business strategy is just intensely integrated with its HR plan. In 2002, working charges for Walmart were just 16. 6 percent of total sales, compared to a 20. 7 average for the retail industry all together, which recognized greatly the entire strategy. Walmart workers in California earn normally 31 percent significantly less than workers used in large retail all together. Actually, with other operating and inventory costs set by higher level management, store professionals must consider wages to increase revenue, and Walmart needs the labor costs to be slice by two-tenths of a percentage point every year. So these aggressive HR polices, are just the most "fittest".
From the employee benefit and safe practices perspective, Walmart's HR procedures are also well aligned with the corporate-level strategy. At Walmart, employees eligible for benefits such as health insurance must pay over the chances on their behalf. In 1999, employees paid 36 percent of the expenses. In 2001, the employee burden rose to 42 percent. While in the US, large-firm employees pay typically 16 percent of the prime for medical health insurance. Unionized supermarket staff typically pay nothing. Walmart was frequently accused of not providing employees with affordable access to health care, but the top professionals and HR professionals know their concentration was just to try their most to execute the "low-cost" strategy.
Finally, from the labor relations perspective, Walmart couldn't have done easier to show us the way the contingency model of "best fitness" works. Sam Walton searched for to bring great value through extreme discounting to customers, to apply its low-cost strategy. Because unionized supermarket personnel typically pay nothing, Walmart has strong anti-union insurance plan. Allegations of firing personnel sympathetic to labor organizations have been made, all new employees are shown a propaganda training video tape which said becoming a member of a union would have bad implication for the kids, and the employees should never hint a union credit card. In the UK it was reported in the Guardian that Walmart is facing the chance of a bruising legal battle with the GMB trade union in a row over collective bargaining protection under the law, for the union would not acknowledging Walmart withdrew a 10% pay offer to more than 700 personnel after they turned down a new package deal of conditions and conditions, including giving up rights to collective pay bargaining. Here there could be some hesitation why Walmart has allowed unionization in their stores in China, where unionization is required. But actually this mandatory rule is made a long time before Walmart walk into china, so why Walmart quit its persistence in not having a some unions, and its own former reason to China authorities is that it didn't have any unions in its global working. So how do we see Walmart's compromise if that constitutes a "compromise"? It's been argued that conducting business in China is particularly difficult due to higher relative need for personal interactions (guanxi), as opposed to the specification and enforcement of agreements in the West (Davies et al, 1995). Walmart China has tried every effort to build up good associations with China federal and other effect teams. So Walmart made this exemption of have unionizations is merely relative to its corporate and business strategy and HR strategy. If it ignores the Chinese government's firm guideline, its cost would just outweigh what it could save by organizing no unions in its labor relations management. And also it forgets not its basic commercial and HR strategy, for in china Walmart provides little electric power for personnel and the unions are managed by the state. So out of this we could further know how Walmart would modify its HR procedures and activities to match its corporate and business strategy contingency.
Part 3: the role of the HR supervisor in this company?
So in the above part we've assessed how various real human resource tactics and systems of Walmart "fit" the organization's competitive corporate and business strategy. Then the particular role of HR professionals in the corporation, who are HR experts with strategic and other skills necessary to build a strategy-oriented HR system. As professionals in one of the functional departments of Walmart, they have tried their finest to "fit" the organization strategy to low down cost. They made some rules and policies, for example, they use anti-union plan in its stores to reduce extra-costs from union employees; they help apply "lock-in" guidelines; they attempted to resist impairment people for the efficiency loss; they discriminate women by giving them much fewer money and opportunities to be promoted, and actually the male personnel in Walmart also got lower salary compared with industry average level. Walmart HR managers also attempted to adjust the employee behaviors and competencies from what the business's strategy requires through the actions and policies of the firm's strategy-supporting HR system, and some of which we have listed.
So in these paragraph, we've examined the role of HR mangers in Walmart using the "best fit" model, within the next we would attempt to examine their role from two other models. Huselid's (1995) work reflects what has come to be known as the "universalistic" or "best practice" approach to SHRM, which assumes that we now have certain "best" HRM procedures that will contribute to increased financial performance, regardless of the tactical goals of the organization. In cases like this, for example, Walmart HR managers refers to its employees as "associates", and promotes managers to think of themselves as "servant leaders", that is, to cause them to become provide others while keeping focused on getting results based on the organization's ideals and integrity. All such varieties of HR insurance policies just are general best practices implemented by HR team in every good companies. Regardless of Walmart used low-cost strategy or differentiation strategy, these regulations and methods would bring no extra cost, but would inspire employees to add more to the organization, and even help form even good corporate and business culture, to reduce a lot more lawsuits and form good relationships with the city and government. And then there is also a require a configurational method of SHRM, which theoretical model argues that there are specific "ideal types" of HRM systems offering both horizontal and vertical fit of HRM tactics to organizational structure and proper goals. More specifically, there are certain, specific systems of HRM procedures that bring about the highest interior consistency and complementarity (horizontal fit), as well as congruence with organizational goals (vertical fit). In the part 2, we've seen how Walmart HR professionals have coordinated a systematic type of HRM policies to check each other, to be congruent with organizational goals (Gerald R. Ferris, 1999).
Part 4: some tips to enhance the employment methods at Walmart.
Actually from the above analysis of the role of HR professionals, we knew from different theoretical SHRM models, there are still many things for HR professionals to improve. The resource-based view targets firm resources that may be sources of competitive edge within the industry. Three basic types of resources provides this competitive advantages (Barney, 1991). Individuals capital resources include specific things like the skills, common sense, and cleverness of the firm's employees. So from the situation material we just most information concerning how Walmart exploited its staff by various HR regulations to low down the price to the least level, which would definitely reduce the loyalty and dedication of these human resource in the business. And besides referring to its employees as "associates", and encourages managers to think about themselves as "servant leaders", there seems little training and other activities taken to develop its valuable human resources, while individuals capital and learning could be a core source of sustainable competitive gain (Nile & Jeffrey, 2004). As for the specific training and develop methods and forms, it would rely upon the specific and proper time, place and the right store. But what's worthy of talk about is the HR professionals should pay more powerful and long-term attention when it calculates the future benefits associated with such HR procedures.
As for the present employment practices, despite having the "contingency model of best fit", there may still many opportunities for improvement. It's very difficult to be solution whether Walmart's ambitious actions to bring cost down really get its strategy in the long term. The workers are complaining its discrimination and low compensation policies, and they bring many charges against Walmart on earth. The government and other areas are just turning increasingly more hypersensitive to Walmart's way of extreme acting, each one of these bring big damage, or a great deal larger cost, to Walmart's reputation and could very well impact its capability of long-term success. It imported a whole lot goods from China, and it even possess some sweat shops in less developed countries to create products with Walmart brand, which cultivate many problems such as business ethics, followed by the opposition of its consumers, the ultimate source of profit. So that it seems Walmart HR professional would harvest more by witnessing the long-term potential cost, and with more advanced management tools.
So from those above content we know the human resource management is of proper importance to Walmart, which is also the definition of SHRM. So the top managers aside from the HR executive should pay more attention to the everyday job management, after all, the problems that are related with work are what they must face each day. So they have to play more positive roles in training and utilizing their human resources, and maybe cultivating better group culture, which may show more cost-saving, and correspondingly help realize Sam Walton's simple viewpoint of "bringing more value to customers".
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