Posted: May 25th, 2022

Social Networking and Social Media

Social Networking and Social Media: A Case Study of Walmart Inc.

A Case Study of Walmart Inc.: Social Networking and Social Media

Walmart is an American-based multinational discount retailer operating in over 27 countries. It is the world’s largest company by revenues, and the largest private employer in the Fortune 500 list of companies. Walmart has shown steady growth and improvement since 1965, when it was founded as Sam Walton as a general store. This text explores Walmart’s organizational culture, structure, and digital media strategy with the aim of determining their role in the company’s continued success.

A Case Study of Walmart Inc.

Walmart is the world’s largest discount retailer, operating over 11,000 stores in 27 countries, including the U.S. Headquartered in Bentonville, Arkansas, Walmart grew from a family-owned general store in 1965 into the world’s largest company by revenues. In 2015, the company ranked 20th in the Forbes list of the world’s most valuable brands (Forbes, 2015). Walmart’s winning strategy lies in its mission of providing commodities at low prices to enable consumers live better. In 2015, the company reported sales of $485.65 billion, and is currently one of the world’s largest private employers, with over 2.2 million associates (Forbes, 2015). This text analyzes Walmart’s organizational culture, structure, and digital strategies to determine their role in the company’s continued success. It begins with a brief description of the company’s business operations, mission and purpose.

Company Description

Mission and Purpose

Walmart’s aspirations are pegged on its corporate mission of providing everyday low prices to enable consumers live better (Walmart Annual Report, 2014). Through its mission statement, the company commits itself to enhancing capital efficiency and consequently, offering low prices to customers throughout the world. This commitment to customer welfare was drawn from the company’s founder, Sam Walton, and continues to drive the company’s official purpose:

If we work together, we’ll lower the cost of living for everyone … we’ll give the world an opportunity to see what its’ like to save and have a better life (Walmart Inc., ‘Our Story section’, 2016).

Through its everyday low prices (EDLP) mission, Walmart appeals to price-sensitive consumers across the globe.

Walmart’s Business

Walmart operates through three major segments: Walmart U.S., Sam’s Club, and Walmart International. The Walmart U.S. segment operates under the Walmart brand and Walmart.com, and includes numerous formats of retail stores, wholesale clubs including Sam’s Club, and restaurants. The Walmart International segment also operates units in wholesale and retail in numerous formats, including apparel stores, restaurants, warehouse clubs, hypermarkets, supercenters, and discount stores (Forbes, 2015). Walmart’s stores in both segments deal in a variety of commodities, ranging from electronics to furniture, clothing, home improvement, shoes, toys, craft supplies, groceries, and health and beauty products, to name but a few.

The third segment of Walmart’s operations, which is the Sam’s Club, includes warehouse membership clubs in the U.S. and Samsclub.com, offering selected private-label brands in five major categories: health and wellness, home and apparel, office and entertainment, technology, fuel and other categories, and grocery and consumables (Forbes, 2015).

Section Two: Organizational Structure

Walmart adopts a flat organizational structure, with very few managerial positions between the top of the hierarchy, and the associates at the very bottom. The company runs three core divisions: Walmart U.S., Walmart International, and Sam’s Clubs as shown in fig. 1 below. Fig 1: Walmart’s Hierarchical Structure

President/CEO

Doug McMillon

President — Sam’s Club: Rosalind Brewer

President — Walmart International; David

Cheesewright

President- Walmart U.S.

Greg

Foran

District managers

District managers

District managers

Each division is headed by a divisional manager (president), stationed at the company’s headquarters. Below the divisional managers are district managers — each division is divided into several districts covering a certain number of stores (usually between 12 and 20). The districts are led by district managers, who are stationed in the field. The district managers oversee operations in all the stores in a district. The company’s flat organization structure helps to facilitate communication among district and divisional managers by reducing the number of reporting levels. Information technologies are used to facilitate communication between divisional and district managers, even with the former located miles away in the corporate headquarters (Brunn, 2006). Through communication technologies, divisional managers are able to monitor and coordinate activities in their divisions from the head office in Bentonville (Brunn, 2006). Technology has helped centralize information flow, such that information flows directly from company headquarters to distribution centers and stores, and vice versa (Brunn, 2006).

Individual stores are headed by general managers, who are assisted by co-managers and assistant managers, depending on the size of the store. All associates in a store report to the assistant manager, although larger stores may have a support manager working below the assistant manager. This basically means that associates in a particular store work in a seamless environment, where they are not separated from each other on the basis of department or functional expertise.

The company’s flat organizational structure eliminates unnecessary reporting levels in the hierarchy, and ensures that employees at the bottom levels have greater access to their managers in higher levels. This serves to boost communication between those in the lower levels and the company’s management. The company’s open door policy, which grants associates the right to share ideas and concerns with any manager without being subjected to retaliation, is based on this flat organizational structure, whose primary aim is to bring managers close to their associates (Murphy, 2008).

The organizational structure also fosters open communication and collaboration among associates. In his book, Keyes (2013) mentions that in order for there to be effective social networking in the organizational setting, the leader needs to manage communication, artifacts, and tasks. One way to manage communication is by enabling seamless communication among parties. As already mentioned, all associates in Walmart stores work together, regardless of functional expertise, under the store’s support or assistant manager. This kind of work environment fosters communication and collaboration between employees better than one where employees in different departments and different skills and expertise are separated and are not able to interact physically (Gaspar et al., 2016). With this kind of structure, “employees with different functional expertise can cooperate to solve non-programmed decision-making problems” (Gaspar et al., 2016, p. 255).

Section 3: Organizational Culture

Walmart’s organizational culture is structured around four core components, which are also identified as the company’s beliefs: service to customers; respect for the individual; strive for excellence; and action with integrity (Walmart Diversity Report, 2014).

In terms of service to customers, the company strives to remind associates everyday that the customer is the reason they are there, and they need to do the best that they can to ensure customers are kept satisfied (Walmart Diversity Report, 2014). The company commits itself to supporting associates so they can serve the customer better (Walmart Diversity Report, 2014). Moreover, it takes time to give to the community in ways that connect to the customer (Walmart Diversity Report, 2014).

In terms of ‘respect for the individual’ the company emphasizes the importance of respecting all associates regardless of age, race, gender, religious affiliations, or cultural beliefs (Walmart Diversity Report, 2014). In support of this, the company emphasizes the aspect of diversity –appreciation in its stores. In November, 2013, the company established the Office of Diversity to ensure an effective journey towards diversity-appreciation (Walmart Diversity Report, 2014). The number of women and people of color working in Walmart stores and in senior managerial positions rose significantly between 2003 and 2015 (from 11 to 23% for associates and 12 to 33% for senior managerial roles) (Walmart Diversity Report, 2014). Currently, 57% of the company’s associates are women, and 39% are people of color (Walmart Diversity Report, 2014). Moreover, 49% of management associates are women, and 29% are people of color (Walmart Diversity Report, 2014). According to Doug McMillon, the company president and CEO, diversity and inclusion are imperatives that are a real extension of what Walmart is (Walmart Diversity Report, 2014).

The company’s culture also emphasizes the aspect of communication between managers and associates, as well as among associates (Walmart Diversity Report, 2016). To facilitate collaboration and knowledge-sharing among associates, Walmart regards all associates as equal, and places them in a common work environment regardless of functional expertise. This accords associates an opportunity to interact, engage in horizontal communication, and solve non-programmed decision-making problems with their different functional expertise (Gaspar et al., 2016).

The company’s open-door policy helps to facilitate vertical communication between managers and associates. It grants associates a right to speak to any manager or supervisor, and share ideas and concerns without being subjected to retaliation (Murphy, 2008).

At face value, Walmart’s organizational culture appears well-articulated; however, its effectiveness in facilitating collaboration and fostering communication between managers and associates is questionable. There have been numerous concerns from Walmart associates about managers not providing a ‘listening ear’. For instance, the company has been a subject of scrutiny in regard to understaffed stores and low associate wages (Brunn, 2006). Brunn (2006) makes reference to an associate in a Walmart store in Florida, who on raising concern with her supervisor about missing lunch and work breaks because of a large workload, was told that if she could not get the job done, the company could find someone who could (Brunn, 2006).

Instances such as these taint the organization’s reputation and impact doubt on the organization’s belief of ‘respect for the individual’. The company’s beliefs are ideal; however, the same need to be reflected in the actual treatment of associates.

Section Four: Social Networking and Social Media

Walmart enjoys a strong presence in various social media platforms, including Facebook, Twitter, Flickr, YouTube, and Foursquare (Walmart Inc., ‘Policies Section’, 2016). On Facebook alone, the company has a following of over 26 million fans (Walmart Inc., ‘Policies Section’, 2016). In line with social theory, the company uses these platforms not only for marketing purposes, but to engage and interact with customers and other stakeholders. On Facebook, the company operates the Walmart’s Facebook feedback tab, where customers can post ideas, concerns, complaints or service complaints for prompt responses. There is an official Walmart Facebook team in place, whose job is to respond to queries and concerns raised by customers on the feedback tab (Walmart Inc., ‘Policies Section’, 2016). The team is governed by the Sundown Rule, which has to do with answering queries and responding to concerns on the same day they are raised.

To make engagement with its customers on social media more effective, the company developed a set of rules and guidelines by which parties need to abide when making postings on the company’s virtual platforms. The rules govern the conduct of associates, customers, as well as the company’s response team. Associates, for instance, are required to familiarize themselves with the rules governing the company’s social media policy, and not to respond personally to concerns or queries directed specifically at the company (Walmart Inc., ‘Policies Section’, 2016). Moreover, customers are reminded to always be polite, stay on topic, keep their postings real, and operate within the confines of the law (Walmart Inc., ‘Policies Section’, 2016). These rules and guidelines help to ensure effective and high-quality engagement between the organization and its stakeholders on social media platforms.

The main problem with the company’s digital media strategy is that it focuses more on social networking between the organization and its external stakeholders, at the expense of collaboration and networking within the organization. Knowledge-sharing among associates could be enhanced through the use of digital media, such as private blogs, wikis and instant messaging for internal communication. This would help boost employee morale as it would indicate that the organization values employees’ views and commits to engaging with them like it does other stakeholders.

Conclusion

Walmart is one of the world’s most successful companies. The company’s success derives partly from its organizational culture, structure, and digital strategy. The company operates a flat organizational structure, which ensures very few reporting levels in the hierarchical structure. This grants associates greater access to top-level management, and helps to boost vertical communication within the organization. The organizational culture facilitates success by emphasizing customer satisfaction, and respect for all individuals, regardless of race, culture, religious affiliation, or gender. Moreover, the company’s digital strategy fosters engagement and collaboration between the organization and its stakeholders. However, greater success could be realized if sufficient attention is paid to social networking and knowledge-sharing within the organization.

References

Brunn, S. D. (2006). Walmart World: The World’s Biggest Corporation in the Global Economy. New York, NY: Taylor & Francis.

Forbes. (2015). #20 Walmart Stores. Forbes Magazine. Retrieved from http://www.forbes.com/companies/wal-mart-stores/

Gaspar, J., Kolari, J., Hise, R., Berman, L. & Smith, M. (2016). Introduction to Global Business: Understanding the global Environment and Global Business Functions (2nd ed.).

Keyes, J. (2013). Enterprise 2.0: Social Networking Tools to Transform your Organization. Boca Raton, FL: CRC Press.

Murphy, A. F. (2008). Walmart Exposed: The Evil Within. New York, NY: Lulu.com Inc.

Walmart Diversity Report. (2014). 2014 Diversity and Inclusion Report. Walmart Inc. Retrieved from http://cdn.corporate.walmart.com/04/50/c9c4367040029f6b2a4aca089d2c/diversity-inclusion.pdf

Walmart Inc. ‘Walmart Policies Section’. (2016). Walmart Policies and Guidelines. Walmart Inc. Retrieved from http://corporate.walmart.com/policies

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