Introduction
Walmart and Amazon are among the biggest retailing and shipping conglomerates in their industries, and they are defined as oligopolists. Indeed, these two corporations invest heavily in the changes in manufacturing, infrastructure, and corporate culture. Such measures allow them to maintain their leading positions and sustain competitive edges.
However, although both companies have similarities in innovation and automation approaches, there are still differences in leadership, with polar methods of changing corporate culture.
Corporate Culture Change
The first crucial change involves a cultural change, where companies face employee pay, responsibilities, and rewards issues. In the case of Walmart, the company decided to change its culture by redesigning how its supercenters are managed as part of its plan to react to outbreak situations.Therefore, this change affects each employee directly through salaries and responsibilities. The business is implementing a new team-based operational model and granting pay raises to thousands of employees (Bariso, 2020).
The innovative operating model is the next stage in a sequence of firm investments in colleagues’ wages, benefits, training, and career possibilities, according to Walmart’s U.S. chief operating officer, Dacona Smith (Bariso, 2020). Walmart changed employee duties, such as transforming the position of an assistant store manager to a coach (Bariso, 2020). Thus, associates had greater potential for career and salary progression.
Like Walmart, Amazon has decided to change its corporate culture and give pay raises to its workers. It began informing staff members of increased pay in April 2022 (Kim et al., 2022). The modification came after Amazon’s decision to more than quadruple its base wage ceiling in February (Kim et al., 2022).
However, there is a difference between Amazon and Walmart regarding their reaction to the change. While some Amazon employees were pleased with their 90% rise in total compensation, others claimed that, when inflation is considered, their low-double figure raise is insignificant (Kim et al., 2022).
Amazon’s advertising unit’s workers anticipated a significant compensation rise when they learned the corporation was more than tripling its top basic salary this year (Kim et al., 2022). However, the employees were disappointed since the pay increase was underwhelming. Insiders claim to have observed the company’s expansion and growth and the CEO pay rises (Kim et al., 2022). However, no one from the warehouse level up to the corporate side is experiencing a significant rise.
Supply Chain Management Change
The second change that both companies have strived to implement involves supply chain management change. For instance, Amazon’s operations and technology have advanced significantly during the past five years in accordance with its goal. Specifically, the corporation has improved its trucking, warehouse, and aviation capacities (Banker, 2021-a). The company’s leadership focused on several areas to successfully implement this change.
First, Amazon has launched its own online marketplace for connecting freight carriers, known as Amazon Freight. For this, the business is creating an incubator for new trucking businesses to establish their own pool of drivers (Banker, 2021-a). Essentially, Amazon is hiring hundreds of individuals to launch their own transportation businesses and work only for the company.
The second change involves ensuring that delivery hubs are established outside of major cities, which is a way to accelerate delivery. However, while the change mainly concerns service quality and new delivery employees, not all warehouse workers have been content with the working environment (Banker, 2021-a). This was particularly evident when the first social distance policies were implemented at the start of the epidemic. In order to determine whether and when an employee was breaking the social distance regulations, Amazon used cameras and software inside its warehouses (Banker, 2021-a). Moreover, many employees feared being replaced by automation technologies in warehouses.
Similarly to Amazon, Walmart has been quite transparent about what it will require to change its supply management systems. Walmart’s senior vice president, Brett Biggs, summed up the efforts by adding that the company invests in the supply chain, innovation, automation, and improved delivery capacity (Banker, 2021-b).
However, unlike Amazon, Walmart focuses not on delivery speed but on low costs. The store will be able to increase its online product selection while lowering shipping costs and times thanks to this new infrastructure (Banker, 2021-b).
To get lane- and department-ready containers for retailers, Walmart is investing in automation technologies in distribution facilities (Banker, 2021-b). Additionally, Walmart invests in delivery and pickup services (Banker, 2021-b). Therefore, this retail conglomerate may achieve considerably better inventory positioning and execution flexibility by using capacity planning, inventory optimization, and restocking tools.
Images of Change Management
Finally, when it comes to change management images, ideally, all leaders must combine all six images masterfully, depending on the situation. However, there are situations when only several images are apparent and necessary. At this moment, it is essential to analyze the roles of leaders such as directors, navigators, and coaches. The director’s image implies guiding the team through new changes and setting the objectives and required resources (Saunders & Iszatt-White, 2020).
Meanwhile, a navigator is different in terms of attention to internal dynamics (Saunders & Iszatt-White, 2020). This feature implies that the main objective is to adjust to the change and embrace it, with little attention to external and internal factors. Unlike this approach, a coach focuses more on the team, communication, and motivation (Saunders & Iszatt-White, 2020). In this case, the similarity between all lies within prioritizing the objective, while the difference is in approaches to its implementation.
When applied to the changes of Walmart and Amazon, the director would follow the same path in terms of supply chain management change. In this situation, the manager’s responsibility is to oversee the change and ensure appropriate recruiting and retention methods lead to success.
As for the navigator, a leader of this role would follow the same path in Amazon’s corporate culture change, which can lead to failure. Here, internal and external dynamics are not paid as much attention to since there is a goal to give raises to all employees. Finally, a coach is most likely to resemble the change in Walmart in terms of corporate culture change since this role emphasizes communication between the teams.
As for the images that would help facilitate change the most, the coach image would best suit Amazon’s corporate change due to its emphasis on the motivation of employees. Moreover, a coach image would be helpful in Amazon’s supply chain management change since it will help reduce employees’ fear. In Walmart’s case, the images described above of the director and navigator best represent the change agents.
Conclusion
Hence, although Amazon and Walmart’s innovation and automation strategies are comparable, there are still disparities in the leadership styles and approaches to altering corporate cultures. Firms must first undergo a cultural revolution when it comes to employee remuneration, duties, and incentives.
Supply chain management is the second improvement that both businesses have worked hard to adopt. The coach image would best complement Amazon’s organizational transformation and supply chain management changes due to the emphasis on employee motivation and reduced apprehension. The director and navigator roles outlined above are the ones that best describe the change agents in Walmart’s situation.
References
Banker, S. (2021-a). Amazon supply chain innovation continues. Forbes. Web.
Banker, S. (2021-b). Walmart’s massive investment in a supply chain transformation. Forbes. Web.
Bariso, J. (2020). Walmart just made a change that could shape its future for years. It’s a lesson in emotional intelligence. INC. Web.
Kim, E., Stewart, A., & Long, L. (2022). Amazon’s biggest compensation overhaul in years leaves employees disappointed, with single-digit raises for some staff. Business Insider. Web.
Saunders, C., & Iszatt-White, M. (2020). Leadership. Oxford University Press.