Walmart Inc. is a multinational retail corporation of America that operates a discount department stores, grocery stores and a chain of supermarkets. It was formed in 1962 by Sam Walton and was incorporated in the year 1969. It is one of the biggest retailers in the world with its headquarters in Bentonville, Ark. It has 11,277 clubs and stores in 27 countries. Walmart’s has 602 Sam’s clubs, 153 Neighborhood markets, 891 Discount stores and 2612 supercenters. The company functions with the name of Walmart in U.S. and Canada, with the name of Seiyu Group in Japan, with the name of Walmart de Mexico y Centro America in Mexico and Central America, as Asda in the United Kingdom, and as Best price in India. In 1988, the company became the most profitable retailer in America and in October 1989, it became largest in terms of revenue. In August 2018, the company holds a minority stake in Walmart Brazil with the 20 % of the shares of the company and private equity firm holds 80 % ownership of the business (Walmart Inc., 2019). The ‘vision’ of the company is to become the best retailer in the mind of their consumers. While the ‘mission’ of the company is to save the money of people to build their life better.
An organizational structure comprises of the tasks & activities and report of the relationship between the employees. In other words, it defines that how the supervision, coordination and task allocation activities are done for the achievement of organizational goals. The structure of the company describes the activities of the business in an efficient manner. The organizational structure of the company inter- relates with the culture of the organization to attain the competitive advantage of Walmart (Worthy, 1950). The structure of the organization affects the actions of the organizations in two ways
- It gives the foundation on which operating plans and procedures are made in an appropriate manner.
- It determines the participation of individuals in the decision making process and shapes the actions of the organization.
Walmart has been structured in different ways. The company has different types of organizational structure which are described as following –
- Flat Organizational Structure – Flat structure is the simplest structure that involves a fewer layer of management. Flat organization structure comprises no middleman management between the executive and staff. This type of structure entails the number of people who are supervised by the managers in a chain of command.
- Hierarchical Organizational Structure – In hierarchical structure, the management activities are run in the hierarchical order. By applying hierarchical structure in Walmart, effective monitoring and control is achieved. This type of structure has two features –
- Hierarchical – The feature of Hierarchical comprises the vertical lines of authority and command during the organizational structure.
- Functional based structure – This feature involves the functions of the group of employees within the organizational structure of the company. Example, Walmart has a department for function of Information technology, human resource management and the function of marketing.
- Divisional Organizational Structure – Divisional organizational structure is that where the functions of the organization are divided into different divisions according to the nature of market, product line and service line. This structure separates the business units and the profit & loss is divided into each business units. The divisional structure of Walmart is divided into three parts named –Product structure, Market structure and Geographical structure.
- Product structure – The group of employees produce a number of products in the Walmart. Example – employees produce the products in the form of ‘Product A’, ‘Product B’ and ‘Product C’.
- Market structure – Walmart uses a market structure that involves the group of employees working together. The work of the employees is based on the specific markets in which the company competes. Walmart sells its products to businesses, individual consumers etc. The customer service department and sales are organized effectively under the organizational structure. When the corporate sales and customer services work together then customer service functions and customer’s sales function are well performed.
- Geographical structure – This element comprises the group of employees who work together upon a specific geographic location. Walmart uses this structure because it operates in many geographical areas and approximately in 27 countries (Fairfield, 2016).
- Matrix Organizational Structure – Matrix structure of Walmart provides the corporate affairs, merchandizing, legal, finance, characteristics and product development among the corporation. The company has a wide variety of product line that accommodates the consumers around the world. When Walmart uses the product stock in the different areas of stores then the corporation uses the Departmentalization. It is also identified in the functions of corporate structure (Owens, 1988).
These are the above flat, divisional, hierarchical and matrix structure of Walmart. Among all of these structures, it has been identified that the Divisional structure is the best organizational structure of the Walmart corporation (FERGUSON, 2019).
- Fairfield, K. (2016). Understanding Functional and Divisional Organizational Structure. Management Teaching Review, 1(4), 242-251. doi: 10.1177/2379298116661843
- FERGUSON, E. (2019). Walmart’s Mission Statement & Vision Statement, Generic & Intensive Strategies - Panmore Institute. Retrieved from http://panmore.com/walmart-vision-mission-statement-intensive-generic-strategies
- Owens, J. (1988). Matrix Organization Structure. Journal of Education For Business, 64(2), 61-68. doi: 10.1080/08832323.1988.10117330
- Walmart Inc. (2019). Retrieved from https://www.walmart.com/
- Worthy, J. (1950). Organizational Structure and Employe Morale. American Sociological Review, 15(2), 169. doi: 10.2307/2086780