Internal and External Factors Critical Analysis
Internal and External Factors Paper XXXXXXXXXXXX MGT/230 xxxxxxxxx xxxxxxxx Internal and External Factors Paper The purpose of this paper is to explain how internal and external factors affect the four functions of management in the Wal-Mart Corporation. For any organization to survive, irrespective of its size, it must develop and implement its own management concept. Management is the process of working with people and resources to accomplish organizational goals (Bateman & Snell, 2011).
The four traditional functions of management include planning, organizing, leading, and controlling. The Wal-Mart Corporation has managed to use the internal and external factors of these functions to their advantage. With their strategic goal of seriously and rapidly expanding, the company currently employs over 2. 2 million associates, owns 8,500 stores, and serves 200 million customers weekly(“www. corporate. walmart. com”, 2012). Their strategies have minimized competitors making this company the world’s largest retailer.
The following paper will describe how the Wal-Mart Corporation has found a successful way to use the functions with internal and external factors influencing globalization, technology, innovation, ethics, and diversity in business. The globalization of Wal-Mart began in 1991 in Mexico. The economy was starting to affect Wal-Mart’s business and they had to figure out a way to bring the profit up before business was lost. They decided to branch out and open a store in Mexico and Wal-Mart currently has stores in eleven countries (Vijay Govindarajan and Anil K.
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Gupta 2002). By 1999, Wal-Mart had more than 130,000 employees working in 729 facilities outside the United States (Vijay Govindarajan and Anil K. Gupta 2002). There were many factors that played into Wal-Marts decision to globalize. The first being that it had already saturated most of the domestic markets, and the United States only accounts for just over four percent of the world’s population. Emerging markets with their lower levels of disposable income offered huge platforms for growth in discount retail (Vijay Govindarajan and Anil K.
Gupta 2002). Since the globalization of this corporation, Wal-Mart currently ranks among the top five global retailers (Matthew Boyle 2009). Although there were bad results in some countries, there are now 3,805 stores operating under 53 distinct banners in 15 markets (Matthew Boyle 2009). Wal-Marts strategic decision to globalize has allowed a continual rise in sales and profits, and has allowed the corporation to remain successful. Wal-Mart has used the four functions of management to grow and maintain a successful company through innovation, as well.
For example, as the largest retailer, Wal-Mart decided to go green and make the entire operation recyclable and reusable. In 2005, CEO Lee Scott announced the company would create zero waste and use renewable energy and products that sustain the environment. Wal-Mart proposed that the stores and clubs would use greener light bulbs, alternative energy, and better store designs to reduce waste, and reusable bags to start what is called a supply chain.
The company announced the sustainability initiative which was used to track the life cycle of every product it sells by measuring the water usage, greenhouse gas emissions and fair labor practices ("Www. todaro. posterous. com", 2010). Wal-Mart is currently hosting industry by industry meetings to debate how this customer label appears. Wal-Mart can only continue to grow their company by coming up with a plan and using the management from the top to the frontline managers to make changes to their company and enforce new ideas and innovations.
Similarly, technology is another factor that Wal-Mart seems to excel at and stay on top of concerning planning and implementing the four functions of management. The company continues to improve their electronic commerce site Walmart. com and has come up with a search engine to help customers find the products they are looking for more quickly and with more ease. The new tool uses machine learning and text mining techniques that assist the customer. If they are searching for something in particular it can bring up products that are similar even if those particular words were not searched (Leber, 2012).
This has caused eBay and Google to scramble to improve their e-commerce search results. The weakness for Wal-Mart is getting customers to start at their website as opposed to others like Amazon. The planning portion of Wal-Mart is particularly strong and is always coming up with new ways of competing and staying on top of what consumers want and need. Next, ethics is defined as the action of identifying the rules that should govern people’s behaviors and the “goods” that are worth seeking. With Business Ethics, corporations strive to uphold moral principles and standards that guide behavior in the business world (Bateman, 164).
Many organizations are finding it increasingly difficult to deal with the complexity of ethical issues hitting businesses today. As a large importer/exporter of foreign goods, Wal-Mart found itself dealing with an increasing issue of bad supplier ethics. From foreign owned to the United States outsourced companies, they needed to create a plan for setting up a standard for products that were received for sale in their stores. In 1992, Wal-Mart started their Ethical Standards Program (originally called Standards for Suppliers Program).
The Ethical Standards Program was established and exists to verify suppliers’ compliance with global standards, to strengthen the implementation of positive labor and environmental practices in factories producing merchandise for sale by Wal-Mart, and to bring opportunities for a better life in the countries where merchandise for Wal-Mart is sourced. The program’s vision was redefined in 2002 to meet public image issues, becoming the statement “sourcing ethically through a socially responsible program” (“Ethical Standards Program”, 2006).
The program works to train perspective suppliers in environmental, health, safety, and labor requirements to meet audit standards. Factories and companies on Wal-Mart’s supplier list are subject to unannounced audits to ensure they are meeting the standards set by the Ethic Committee. Through these organization and control measures, Wal-Mart has made great strides in correcting some of the worst conditions in many of the Asian countries they use as their suppliers. According to the “Ethical Standards Program” (2006) website the company also began the Factory Five Program in 2006.
The program serves as a forum in which factory management (from five factories per region in China) regularly meet with suppliers and the Ethical Standards team. Time is spent identifying and resolving complex issues of noncompliance identified by audits. They hope to share knowledge and changes that come out of this forum with others in the industry. Wal-Mart is working hard to show leadership in the ethics market and to pass knowledge and training onto others to encourage ethical practices in all heir stakeholder’s corporations. The ultimate company goal is to fully integrate labor compliance and social responsibility into all purchasing decisions done by Wal-Mart buyers. Finally, diversity is an equally tricky concept that comes into play in businesses today. As corporations expand to cover more global territory it is becoming increasingly important to have a strong diverse workforce and management team to work in this environment.
In 2002, Wal-Mart was struggling heavily under a bad public image as a corporation engaged in unsatisfactory and unfair work policies, resisting diversity practices, demonstrated social irresponsibility, and eroded economic opportunities for small local business. By 2004, management had hired a PR firm to manage the onslaught of bad press, and later restructured the company and made key management changes (Alleyne, 2012). Wal-Mart formed a number of internal affiliate groups for women, African Americans, Latinos, Asians, and the lesbian, gay, bisexual, and transgender community as part of its diversity practices.
According to Alleyne (2012), in recent years, Wal-Mart has been named among the BLACK ENTERPRISE 40 Best Companies for Diversity. By integrating a plan that showed support for diverse groups within their workforce, The company is making great progress in gaining new customer support and increasing consumer confidence in its corporation, people, and products through managers like, Rosalind Brewer, “Black Enterprise" 2012 Corporate Executive of the Year and the first African American woman chief executive officer (CEO) at Wal-Mart.
As Alleyene (2012) says, Brewer is holding one of the most powerful positions in corporate America and making big changes in the leadership of the Wal-Mart Corporation. In conclusion, this corporation has effectively used the four functions of management and the effects of globalization, technology, innovation, ethics, and diversity on these functions. Through adversity the top-level management has shown their ability to plan strategically and overcome obstacles.
Wal-Mart’s key strategy is to dominate the retail market and with the proper implementation of these functions this organization continues to be one of the largest retailers in the world. References Alleyne, S. (2012, September). Second Act. Black Enterprise, 43(2), 82-88. Bateman, T. S. & Snell, S. A. (2011). Management: Leading & Collaborating in a Competitive World (9th ed. ). New York, NY: McGraw- Hill Irwin. Boyle,M. Bloomberg Business Week. 2009. www. businessweek. com/managing/content/ovt2009/ca20091 Ethical Standards Program. (2006). Retrieved from http://walmartfacts. om/reports/2006/ethical_standards/building. html Leber, J. (2012, October). Wal-Mart dives into search technology. Retrieved from www. technologyreviews. com Salter, C. (2012, July). #9 Wal-Mart. www. fastcompany. com, (). Vijay Govindarajan and Anil K. Gupta. Strategy + Business. Global Perspective. 2002. Fourth Quarter 1999. Issue 17. www. strategy-business. com/article/13866? gko=e19cb www. corporate. walmart. com. (2012). Retrieved from http://corporate. walmart. com/our-story/our-stores www. todaro. posterous. com. (2010). Retrieved from http://http. //todaro. posterous. com
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