Introduction
Walmart is known across the globe for its revolutionization of retail strategy. It has maximized the cost-efficiency of all processes, including logistics, manufacturer relations, distribution, as well as human resources (Reich, 2018). Throughout its history, the company was one of the first to introduce numerous changes that helped streamline the process and lower product costs, such as barcodes and RFID integration (Reich, 2018). However, the company fell behind its competitors in one of the most crucial aspects of store management – human resources. Nowadays, Walmart is known for its poor reputation regarding its waging strategy, low quality of customer relationships, and high turnover rates (McMann, 2019). This essay discusses the necessity of changes in Walmart’s tactical approach regarding suppliers and employees and reviews the actions that were taken and are planned to be made by the company to improve its reputation.
Tactics
Walmart’s strategy allowed it to retain the lowest prices on many products without sacrificing much of its quality. However, it also puts a significant strain on human resources management within the company. Xie and Cooke (2018) state that Walmart “has attracted much criticism/controversy in the United States about its labor standards” (p. 522). According to Neebe (2020), “Walmart employs over two million associates” (p. 67). The quality of interaction between employees and consumers is directly affected by the hierarchical relationships within the company. With such a high number of employees, the company brought various innovations in the managerial process that aim to decrease the costs of operation.
However, Walmart implemented numerous technologies that help the company’s managers to track the efficiency of low-end personnel, masking them under the promise of potential bonuses and promotions based on employee performance (Reich, 2018). Despite these stated intentions, some employees perceive these technologies as tools to discover underperforming staff members and develop strategies that increase the amount of work that an employee can perform in a certain period (Reich, 2018). Moreover, high turnover rates hurt productivity that managers track throughout these devices.
Moreover, the products at Walmart stores have an apparent issue with a visual representation. The requirements for the quality of the packaging of goods from suppliers are set intentionally at the lowest priority in order to reduce prices further (Roberts & Berg, 2012). However, it creates problems with customers’ appeal, as bland and lacking recognized features of products makes them less desirable (Roberts & Berg, 2012). Currently, Walmart has set new requirements for packaging aiming to increase sustainability, but improving packaging format should also be considered for a higher buyer’s appeal.
Action Phase
In order to improve its reputation as an employer, Walmart will need to make significant changes to the management strategy, as well as the training process of its employees. McMann (2019). argues that “if Walmart was to change its corporate strategy from cost leadership to help generate less negative criticism and high turnover rates, it would dramatically alter the foundation” of the company (p. 4). However, by decreasing turnover rates and raising the quality of employee-customer interactions, the company can increase profits by spending less on training programs and by retaining a higher number of customers.
Currently, Walmart focuses solely on sales volumes, however, by taking an in-depth look into human resources management, it can adjust its operating costs by investing in more efficient management. However, the company has acknowledged long-standing issues that adversely impact its social reputation, and has shown readiness to change its disposition towards low-end employees (Neebe, 2020). While there are changes being implemented in regards to employee livelihood conditions, the company still needs to address employee-manager relationships by implementing new policies regarding managers’ professional attitudes and leadership skills.
Employees in the company can help generate value for the products as much as does an optimized supply chain. Neebe (2020) states that “By 2025, Walmart U.S. will have put millions of associates through focused training programs like Walmart Academy to equip them with skills to improve career growth” (p. 68). The company has already launched several employee-oriented programs that aim to affect their attitude positively, and these benefits will be transferred to customers as employees will be more eager to help them.
The company has acknowledged its overly strict set of requirements towards suppliers. Neebe (2020) writes that the company “opened over 600 cases involving allegations of supply chain misconduct” (p. 68). By addressing current rules in order to make them more supplier-friendly, Walmart can benefit from a higher number of suppliers willing to put their products on the shelves of the company’s stores. Moreover, the company’s changing requirements include the need for sustainable packaging, which, in turn, can be perceived as more desirable for customers.
In conclusion, the company is able to generate more value from an increased number of suppliers, as well as decreased turnover rates. Nowadays, showing respect for employees is as important as it is for customers. By improving the working conditions for its employees, Walmart will increase its reputation with customers by changing the staff’s attitude to more positive and friendly. The company has been fixing relationships with its suppliers, and a further improvement in this field can attract more business partners willing to put their products on Walmart’s shelves.
References
McMann, S. (2019). Turnover rate: Walmart. (Honors capstone, Sacred Heart University, Fairfield, CT). Web.
Neebe, K. (2020). Sustainability at Walmart: Success over the Long Haul. Journal of Applied Corporate Finance, 32(2), 64–71.
Reich, A. (2018). Working for respect: Community and conflict at Walmart. New York, NY: Columbia University Press.
Roberts, B., & Berg, N. (2012). Walmart: Key insights and practical lessons from the world’s largest retailer. New York, NY: Kogan Page Publishers.
Xie, Y., & Cooke, F. L. (2018). Quality and cost? The evolution of Walmart’s business strategy and human resource policies and practices in China and their impact (1996-2017). Human Resource Management, 58, 521-541.