Case Analysis of Wal-Mart

Brief Introduction of Wal-Mart

Wal-Mart is one of the nation's leading discount retailers, and its success is built on the vision of its founder, Sam Walton. With a strategy of locating in relatively small areas, the company built a loyal following by offering many products in a single location, and by selling at prices which met, or were lower than, prices available in cities located hours away. Broadly, Wal-Mart retail store is categorized into four types, Discount Stores, Super centers, SAM’s club Neighborhood Markets. Wal-Mart consistently appeared on Fortune’s list of the 100 best companies to work for in the United States. During the year 2002 it was ranked 94 in the list of Fortune 500.

Wal-Mart is the world’s largest company in terms of sales. It is the US’s largest private employer-second only to the federal government-with around million workers.                                                                                                                                                                                                                                                                                                                              Recently it has become the largest grocer in the US. Wal-Mart has 3,400 stores in the US and 1,400 abroad. It plans to open 1,000 Supercenters (combination supermarket/discount stores) in the next five years. In 2002 it posted revenues of $246.5 billion, a 12.2% increase over 2001 and made a net profit of $8 billion, or about $7,300 per employee on an annual basis. The five members of the Walton family who own a substantial portion of Wal-Mart are all on the list of the 10 wealthiest Americans and are collectively worth $100 billion dollars.

Because of Wal-Mart’s size, its enormous profitability, and its aggressive growth, it cannot help but be a leader in defining corporate trends. For instance, Wal-Mart pioneered the use of the Universal Bar Code and insisted that its suppliers do the same, laying the groundwork for its proliferation across the entire US. Similarly, although Wal-Mart did not invent the discount store, it certainly has dictated and perfected the nature of the market.

Wal-Mart Stores, Inc. has five levels of operations. They are Corporate, Division, Region, District, and Stores. Corporate level is described as the total Wal-Mart including domestic and international. Division level is described as division one stores (like discount stores, supercentres, Neighborhood Markets) and SAM’s Club make up Wal-Mart’s two key domestic divisions. There were 41 regions in the United States in which each region contained five to six districts on average and each districts contained ten to fifteen stores. Its culture is based upon the ideology of the founder, Sam Walton with three basic philosophies:

§  Respect for the individual,

§  Service to the customers, and

§  Strives for excellence.

In addition to this, the culture of the Wal-Mart is based upon the two basic rules formulated by Walton. They are:

§  The sundown rule and

§  Ten-foot rule

Sundown rule is basically tells how Wal-Mart responses to the customer complain and request.  Generally, Wal-Mart responses to the request at the same day as they were received from the customers or from any other party. And the ten-foot rule suggests the employees to offer greetings to their customers who were within 10 feet distance.

The main problem in the case is gender discrimination in the Wal-Mart. In the case it is shown that around 90 percent of the workers in the lower level management are women and the percentage of women is sharply decreases in higher level management and just around 15 percent women are working in store manager level. If we compare the salary of the males versus salary of female, we can see that there is a high pay difference between male versus female workers in the Wal-Mart. In total, the average earnings of the males are 23,403 whereas the average earnings of the females are just 18,184. The case also describes that there is huge pay difference in the Wal-Mart between male worker and female worker though booth are holding the same position. In addition to this, the case highlights that there is not a single regions where percentage of women holding salary jobs are more than that of holding hourly job. And there is gender gap even in the hourly rate over the time.

Therefore, after analyzing all statistical data, it is analyzed that the gender discriminations is the main problem of the case.  To solve this problem, Wal-Mart should hire equal number of women in their top level management. They should pay equally to both male and female employees.

It can also be analyzed that the women have got the higher performance rating than of males. It can also be found out that the turnover ratio for women is much less than that of the males. The males are found to be leaving the job much earlier than the females. In this way we can find the females are more loyal than the males.

There is no other way other than to have a similar pay pattern. The pay pattern should be based upon the level. And, a person no matter which gender s/he belongs to. It should be equally paid if in a same position.  If the same kind of discrimination pertain in the future too then it’s certain that the employees may in demand of the union rather than of gaining frustration.

Wal-Mart should also start to give higher positions to the women. This will help in generating confidence in women. The women will start believing that they are not being discriminated and they feel as a part of the organization.