Decision Making at Walmart
- 2. Founding and Origin Walmart was founded by Sam Walton in 1962 Incorporated on October 31st, 1969 It began trading stock as a publically held company on October 1, 1970, and was soon listed on the New York Stock Exchange The first stock split occurred in May 1971 at a price of only $47.
- 3. Founding and Origin Cont. By its 25th anniversary in 1987, there were 1,198 stores with sales of $15.9 billion and 200,000 associates. By 1990, Walmart had become the largest U.S. retailer by revenue. By the mid-1990s, it was far and away the most powerful retailer in the U.S. and expanded into Mexico in 1991 and Canada in 1994. In 2002, it was listed for the first time as America's largest corporation on the Fortune 500 list, with revenues of $219.8 billion and profits of $6.7 billion.
- 4. Article Overview This article from Panomre.com details Walmart’s approach to the 10 decision areas of operations management. Walmart’s operations management covers a variety of approaches that are focused on managing the supply chain and inventory, as well as sales performance. The company’s success is partly based on effective performance in operations management.
- 5. Article Overview Cont. Specifically, Walmart’s management covers all of the 10 decision areas of operations management. These decision areas pertain to the issues and concerns that managers face on a daily basis. Walmart’s application of the 10 decisions of operations management reflects managers’ prioritization of business objectives. In turn, this prioritization shows the strategic significance of the different decision areas of operations management in Walmart’s business.
- 6. Decision Making Decision making is one of the most critical activities in any organization. Decisions might be made after months of gathering information and deliberations or even in an instant with little or no consideration at all. Decisions might be made by individuals alone, through consultation with relevant organizational members, or in participative groups.
- 7. Decision Making Cont. Decision making is usually left to the individuals that reside higher up on the corporate totem poll but teams are also used to make decisions. Decisions can be as simple as pricing for a small object or as complex as a company merger. Sometimes decisions can have emotional influences. Emotional influences need to be minimized for the good of the company.
- 8. Walmart’s Poor Decision Making Walmart has quite the record of poor decision making: Walmart failed to understand the market in Germany and could not compete with local firms so they left the market. In Mexico, Walmart built Hige U.S.-style parking lots. Most Mexicans lack cars, and city bus stops were far away so shoppers could not haul their purchases home. Walmart using child slave labor in Bangladesh.
- 9. Walmart’s Poor Decision Making Cont. In Brazil, families do their big shopping on payday. Isles were too narrow to accommodate the rush. In Argentina, Walmart’s red, white, and blue banners, reminiscent of the U.S. flag, offended local’s tastes. Walmart selling a “Razor Blade Suicide Scar Wound Latex Costume Makeup” Halloween kit in October, 2016. This poor decision was particularly sick and appalling.
- 10. Rational Model of Decision Making Organization members notice an issue that requires a decision The decision makers then search for any and all information relevant to the issue. After that, the decision makers develop and propose a set of decision options and evaluate them for desired effectiveness. When an optimal decision is identified and can be implemented, the decision making process concludes.
- 11. Groupthink Groupthink: A mode of thinking that people engage in when they are deeply engaged in a cohesive in0group, when the members’ striving for unanimity overrides their motivation to realistically appraise alternative courses of action.
- 12. Groupthink Symptoms Illusion of Invulnerability: The belief that nothing can go wrong within the group. Illusion of Morality: The self-righteous belief that the virtues of the group are above reproach. Stereotyping: The categorizing of others outside your group in ways that see their views as unacceptable. Self censorship: The overt restraint of group members against offering opinions counter to the prevailing thought in a group.
- 13. Groupthink Symptoms Cont. Illusion of Unanimity: The statement of a group agreement while private doubts and disagreements are suppressed. Direct Pressure on Dissidents: The coercive force that obliges group members to behave and think in similar ways. Reliance on Self-Appointed Mind Guards: The protection of the group from contrary information from outside influences.
- 14. Participation in Decision Making The first major study of participation in decision making was conducted by Coch and French in 1948. They were interested in factors that would enhance employee commitment to organizational decisions and found support for their hypotheses that participation in organizational decisions would make employees less resistant to change. Participation has significant and consistent- but relatively small- effects on satisfaction and performance.
- 15. Questions 1. How will Walmart make up for the horrendous Halloween makeup kit? 2. Does Walmart have a plan to boost employee moral? 3. How will Walmart fix the issue of the small isles in Brazil?
- 16. Works Cited Kernagham, C. (2006, October). Children Found Sewing Clothing For Wal-Mart, Hanes & Other U.S. & European Companies - National Labor Committee. Retrieved November 14, 2016, from http://www.law.harvard.edu/programs/lwp/NLC_childlabor.html Smithson, N. (2015, August 27). Walmart: Operations Management 10 Decisions, Productivity - Panmore Institute. Retrieved November 14, 2016, from http://panmore.com/walmart-operations-management-10-decisions- areas-productivity-case-study-analysis