Business Problem Paper and Presentation

Running Head: BUSINESS PROBLEM PAPER AND PRESENTATION

Business Problem Paper and Presentation

University of Phoenix

MBA 510 - Managerial Decision Making

Professor Daniel A. Puente University of Phoenix Faculty

Due April 28, 2008

Business Problem Paper and Presentation

In the following pages, discussion will take place on the Wal-Mart Corporation, more specifically issues that have arisen with employee retention within the company. This work will illustrate both statistically and comprehensively the problems that Wal-Mart is facing with employee retention, including a list of optimal solutions for the problem. Dependent and independent variable will be identified, the null and alternative hypothesis, primary and secondary data sources, sample size requirements, and an explanation of the production of samples. Recommendations and observations will be given throughout the paper based on research on the different aforementioned points that each of the four authors of this paper will researching and writing. Finally, a 15-slide Microsoft PowerPoint presentation that gives an overview of the team project, including problem definition, conclusions, recommendations, and sources for primary and secondary research data.

Independent and dependent variables

Wal-Mart is loved in some communities and hated in others. Wal-Mart has created over 1.6 million jobs, many of which pay low wages (Hexhunterkid, 2006). Inadequate pay can be a major factor driving and organizations turnover rate. A high turnover rate can be very costly to any organization, as the organization is constantly spending funds to train new employees. The higher the turnover rate the more funds are spent on training a higher number of new employees each year. These are unnecessary costs that Wal-Mat can invest in other areas of the business.

Wal-Mart’s turnover rate is the dependent variable. The dependent variable is defined as the variable that is being predicted or estimated (Lind, Marchal & Wathan, 2004, p. 431). Several independent variables can be found that influence the dependent variable. Independent variables are the variables that provide the basis for estimation, such as the predictor variable (Lind, Marchal & Wathan, 2004, p. 431). Many different factors can contribute to the turnover rate at Wal-Mart Corporation. Examples could include the expensive health care costs, the inadequate pay, employing mainly part time positions, better offers within the industry, bad management, or bad company policy. The independent variables for the purpose of this paper will be inadequate pay, high benefit costs, and lack of full time employment.

The null and alternative hypotheses

A hypothesis is a statement about a population parameter for the purpose of testing (Lind, Marchal & Wathan, 2004, p. 317). This paper will focus on Wal-Mart Corporation and its turnover rate. Every organization needs to be aware of its costs and make an effort to reduce costs as much as possible. If an organization can reduce cost, it can potentially increase profits. Wal-Mart needs to determine the impact of its costs due to its high turnover rate. The null hypothesis is that the Wal-Mart’s highest cost is its costs due to the organizations turnover rate. This paper will attempt to prove the null hypothesis is true. In hypotheses testing, alternative hypotheses also exist. The alternative hypothesis is what will be concluded if the null hypothesis is rejected. The alternative hypothesis is that the cost associated with turnover is not Wal-Mart’s largest cost. A hypothesis testing is used to determine if the hypothesis is a reasonable statement (Lind, Marchal & Watha, 2004, p. 318).

Wal-Mart employees receive wages that are lower than the average for the industry. In 2004, associates n California earned an average of 31% less than the industry average. Wal-Mart employees received an average of $9.70 per hour compared to $14.01 at large retailers (Dube & Jacobs, 2004). Such low wages cause Wal-Mart associates to receive government assistance. The families of Wal-Mart employees use an estimate 38% more non-healthcare related public assistance than the average of families for large retailers (Dube & Jacobs, 2004). After reviewing numbers as drastic as these one can easily understand why