Wal-Mart's Organizational Theory and Behavior

Final Project - Wal-Mart's Organizational Theory and Behavior

Jean K. Martin

AXIA College of University of Phoenix

There are so many organizational behavior concepts to take into consideration for the success or failure of any organization, business or company. The way these concepts are handled by management and employees will either keep the business open or these same concepts could end up in closure of this same business or organization. Management and employees are the people who will make the "win or lose" situation occur. Communication, motivation, and power and politics are some of the concepts that will cause a business to succeed or fail. Businesses must be competitive to stay alive, or these same businesses will deteriorate and die.

Communication is a must between people (i.e., employees, management, customers, consumers), and companies (i.e., suppliers, vendors, competitors) for a relationship to be established. Wal-Mart has incorporated the importance of listening to customers as a means of identifying the needs and wants of their customers and their employees whether they are internal to the company or external consumers. Wal-Mart knows what their customers want. Competitors are playing catch-up to Wal-Mart's concepts, techniques, and ideas. Wal-Mart opened the first two supercenters in 1988. These two stores were located in Washington, Missouri and Wagner, Ohio. By January 2005, 1,672 supercenters were built and became operational throughout the United States (Lindner, 2005). Over the years, the newer stores were built larger and expanded to handle a wider range of products.

Paul Lindner was the Director of Merchandising for the Daymon Worldwide Inc. who performed many years of research and study on the retail market of private industry. Paul spent most of his working day on the road traveling from store to store gathering retail information. Paul approached hundreds of stores in his travels and spoke to thousands of store managers, department managers, and the personnel of company headquarters, suppliers, vendors and customers (Lindner, 2005). Paul created a list of ideas that Wal-Mart has used or is currently in place which drives them to be such a successful retail superstore. For other competitors to be as successful as Wal-Mart, these other companies might consider incorporating some of the 50 Wal-Marts victorious ideas.

Some of Wal-Mart's booming ideas or programs are listed below, just to name a few.

(1) The "Roll Back" program is the decrease in price of a product which will draw customers to the store. Once the customers are in the store, more merchandise usually will be purchased (Lindner, 2005).

(2) The "Value Time" is the low cost items that relate to "great value" labeled at Wal-Mart (Lindner, 2005).

(3) The "10 for $10" program allows the customer to purchase a mixture of products for $10 (Lindner, 2005).

(4) The "Do Not Compete on Pricing" is a list of 850 items that Wal-Mart will not let any other retail store match or beat the price. Wal-Mart stays on top of these items daily, so they can remain the top retailer for these 850 specific items (Lindner, 2005).

(5) The "Protect the Home Turf" was once dominated by supermarkets until it was taken over by the Wal-Mart supercenters. Wal-Mart now dominates the sales in a wide rage of products such as "pet care, laundry supplies, candy, diapers, paper goods, general merchandise, etc. (Lindner, 2005).

(6) The "In-store demos" are products that are demonstrated by Wal-Mart on the weekends. After products are demonstrated to Wal-Mart customers, it is estimated that about 67% of the customers are always willing to try new things. Usually 37% of the 67% of customers will then purchase the product which was demonstrated (Lindner, 2005).

(7) The 10-Foot Rule is so important and should be incorporated into every retail store. It starts with knowing the customer when they are close enough to greet them. Wal-Mart is well-known for hiring retired senior citizens as welcome greeters. All store employees should offer their assistance to all store customers by asking if they can help find a specific item. This brings out a positive appearance within the store. This type of treatment should be present in all departments throughout the store. The most important support comes from the checkout counter who will leave the customer with a lasting impression of that store. The cashier's behavior could be the determining factor if that customer will return to that store. A policy should be in place which