Wal-Mart is the largest and most advanced provider of diverse retail services in the United States. As one of the biggest companies in the U.S. retail market, Wal-Mart enjoys a unique competitive advantage. Its strategy comprises three dimensions – differentiation, focus, and cost leadership (Myers, 2014). Yet, one of the most pertinent questions is whether the organizational culture at Wal-Mart supports its strategic choices. Wal-Mart’s organizational culture rests on the values of fairness, honesty, and objectivity. In the meantime, its grand strategy covers innovation, market penetration, diversification, market expansion, and new market creation. All three values support Wal-Mart’s grand strategy: the company can use its objectivity, fairness, and honesty to analyze its growth options, build effective relationships with other market players, and win the hearts and minds of its customers by providing truthful and comprehensive information about its products and services.
Wal-Mart is rightly considered as one of the most successful retail companies in the 21st century. Its global outreach, coupled with a strong focus on customers, gives the company a strong, sustained competitive advantage. Wal-Mart enjoys a solid position in the global marketplace. Its growth strategy incorporates numerous components, which reflect the complexity of the organization, its business idea, as well as its objectives and goals. The organizational culture at Wal-Mart represents a logical extension, as well as the foundation, of the company’s vision, mission, expectations, and desired strategic results. The strengths of Wal-Mart’s organizational culture were extensively documented. It could serve as a role model for other companies in the retail industry. What is unclear is the extent to which the organization’s culture supports its mission, vision, purpose, and strategic decision making.
The organizational culture at Wal-Mart has four dimensions. They are said to guide employee behaviors and strategic decisions within the organization (Lombardo, 2015). First, it is service to customers (Lombardo, 2015). Everyone working in the organization must remember that customers are the top priority for Wal-Mart (Wal-Mart, 2015). It is the key belief underlying the company’s culture and structure. Second, it is respect for individuals (Wal-Mart, 2015). Third, it is excellence: Wal-Mart (2015) emphasizes its commitment to continuous learning and strategic improvement. Fourth, it is integrity, which implies that Wal-Mart does not betray its commitment to ethical and human values (Wal-Mart, 2015). These values inform the company’s organizational, strategic, and market choices. They have a huge potential to support Wal-Mart’s grand strategy and reinforce its position in the global market.
These values include objectivity, fairness, and honesty. Wal-Mart presents itself as a company which tells the truth to everyone (Wal-Mart, 2015). It promotes the importance of fairness in every aspect of its organizational and market performance. “Be fair and open when dealing with associates, suppliers, and other stakeholders” (Wal-Mart, 2015). Wal-Mart also strives for objectivity, which enables the company to balance its corporate interests against the requirements for legal and ethical compliance (Wal-Mart, 2015). All these values support Wal-Mart’s growth strategy.
Objectivity provides Wal-Mart with an unbiased and rational view on the market situation. A company that is objective about its resources and capabilities is uniquely positioned to capture the opportunities offered by the retail market in the U.S. and beyond. Fairness lays the groundwork for establishing and maintaining quality relationships with all organizational stakeholders, from customers to suppliers and community residents. These relationships translate into a strong competitive advantage. Wal-Mart can easily leverage additional resources, mobilize communities to support its expansion to new markets, and defend its position at times of uncertainty. Ultimately, honesty is a strong argument in any competitive struggle. Consumers expose themselves to a variety of products and services, and the openness, availability, quality, and comprehensibility of information about these product and service options will predetermine companies’ success. Wal-Mart uses honesty as a source of its market advantage. Honesty facilitates market penetration, the creation of new markets, and diversification. Customers will be more motivated to switch to the new products and services offered by Wal-Mart, if they possess full information about them.
Looking at Wal-Mart’s grand strategy, it comprises five elements. They have been presented in Quadrant IV. Market penetration, innovation, creation of new markets, diversification, and expansion to other markets are the principal dimensions of Wal-Mart’s strategic outlook. The rationale behind this strategy is simple: in the recent years, slow market growth and the growing intensity of competition in the retail industry have had particularly detrimental impacts on Wal-Mart’s profits and growth prospects. The company seeks innovation and diversification to speed up its growth in the retail market. Wal-Mart intends to penetrate into new markets in ways that would build more effective relationships with customers and promote their loyalty.
In this sense, the organizational culture of Wal-Mart is ideally suited to support its grand strategy. By placing customers into the center of its business activity, Wal-Mart creates a good basis for earning their recognition and respect. Fairness and honesty promote more effective communication and relationship building between the company and its major stakeholders. Openness and objectivity will open new venues for making reasonable forecasts and engaging customers in strategic decision making. All these steps will earn and reinforce customer loyalty to Wal-Mart. The latter, in turn, will present a remarkable opportunity for the company to speed up its market expansion and growth.
To conclude, the organizational culture of Wal-Mart is uniquely suited to support the company’s strategic choices. It incorporates the values of honesty, fairness, and objectivity. Wal-Mart’s organizational culture fosters effective communication in concert with openness and accountability. It empowers the organization to make rational, objective decisions that support its corporate interests without compromising the rule of law. As the biggest retailer in the U.S. with strong global ambitions, Wal-Mart has everything needed to pursue strategic growth and continuous development. Still, it will have to revisit its cultural principles to make sure that they reflect the realities of the competitive struggle in the global marketplace.
- Lombardo, J. (2015). Walmart: Organizational structure & organizational culture. Panmore Institute. Retrieved from http://panmore.com/walmart-organizational-structure- organizational-culture.
- Meyers, M. (2014). ‘Save money live better’: An analysis of Wal-Mart’s story. Academy of Marketing Studies Journal, 18(1), 51.
- Wal-Mart. (2015). Working at Walmart. Retrieved from http://corporate.walmart.com/our- story/working-at-walmart.