Abstract
This paper discusses the issues relating to an organization where research has been done to solve the issue. In this case, the study focused on Walmart Company. Walmart is an American retail company that operates chains of supermarkets. One issue faced by Walmart is cultural challenges during its merger and acquisitions, which was solved by Walmart’s adaptation of its products to the local taste and using the freshness, using the store design, transforming working cultures, and using the low pricing policies. On the issues of expansion overseas, the company appeased the customers by providing locally available goods, including coconut juices, mushrooms, and oats. The company has struggled to compete with its competitors, such as Amazon and InstaCart, and new subscription services Walmart +. However, this was solved by Walmart strengthening its in-store and online grocery stores and broadening the financial services offerings. And the use of big data analytics and offered longer free trials and discounted membership to solve the subscription services issue. The company also faced sustainability issues, including selling shoddy products, reducing waste, and threatening endangered species. The company has solved this by introducing 100 percent renewable energy, zero waste, and selling green products. The company has faced ethical issues regarding worker’s compensation, gender discrimination, and worker exploitation. This was solved by maintaining a global hotline and email address where the workers reported the case of discrimination and other issues. Lastly, the company has been affected by the Covid-19 pandemic, but it was solved by safeguarding the employees by giving them time to get vaccinated with paid three days off and bonuses.
Introduction
In a period of global political and economic volatility, it is vital to analyze the issues faced by multinational companies and the extent to which they solve them. We live in rapidly changing times where businesses compete on a global stage and adjust to the changing employee demands and behaviors. Organizational issues tend to be a challenge for firms, affecting their daily operations. Organizations need to acknowledge issues and identify the source of the problem. However, it takes time to find out where issues come from and develop solutions for every issue but having solutions is essential for an organization that wants to thrive and develop healthily. This paper discusses issues relating to an organization where research has been done to solve the issue. In this case, the study will focus on Walmart Company.
Walmart Inc.
Walmart is an American retail company that operates chains of supermarkets. Walmart is suitable because it represents many transnational companies that have encountered issues maintaining a competitive advantage. Walmart participates in retail and wholesale business as it offers merchandise and services assortment. The company uses the Everyday Low Price strategy and offers one-stop shopping for groceries, entertainment, and crafts. It provides assortments appreciated by customers who shop at the company’s online or mobile apps or in a store (Walmart, 2021). The company functions with three primary store formats in the United States, and each store is custom-tailored to the neighborhood. The company’s competitors include Rakuten and Sears Holdings Corporation, Target, Amazon, and Costco ( Walmart, 2022). Additionally, the company is operational in fifty countries, including China, Mexico, Germany, South Korea, the USA, and Brazil, with more than nine hundred and fifty employees globally.
Issues and Solutions
Merger and Acquisition Issues
The global issue Walmart faces is cultural challenges during its merger and acquisitions (M& A), more precisely on cultural issues that happen through the post-acquisition. While the organization had promising forecasts for the success of mergers and acquisitions, the M &A failed because of cultural challenges which occurred because of the human resource neglect issues, including cultural sensitivity and appreciation (Zhang, 2021). Walmart has demonstrated to be an instance of how international corporations abandon human resource apprehensions and fail to consider cultural issues. This is enhanced by a case in the Argentinian market where Walmart was faced with insensitivity to the cultural ideal of Germans, South Koreans, and Latin America (Matusitz, 2016). This has contributed to employee demotivation, making Walmart incapable of competing with other retailers.
However, research conducted by Philippou (2018) showed that the cultural challenges during M & A were solved by Walmart’s adaptation of its products to the local taste and using the freshness, using the store design, and transforming working cultures. In the past, Walmart has shown how international businesses abandon human resource distresses and tend to be thoughtless of cultural matters regarding the business M& A. Walmart adopted practices in the workplace, initiating the working culture to suit the cultural norms. Also, Walmart solved these issues by becoming more observant of human resources subjects during the mergers and acquisition deals formation using approaches from the American stores. The company found it compelling within Latin America to develop a culture blending to succeed in other countries. However, some shareholders found that this trial and error approach could not harmonize every culture even with necessary adaptations. When Walmart bought its store in Argentina, it was faced with cultural challenges, and the company used the low pricing policies blueprint and using the shopping procedures to be successful. The company chose to replicate instead of modifying, which was detrimental to Argentina customers.
Expansion Overseas
The global issue also faced by the company includes its expansion overseas. Walmart entered Hong Kong in the early 90 and began operations in two years. The company started its operations in Indonesia but experienced rioting where its units were damaged and later exited Jakarta. In South Korea, the company experienced challenges due to merchandise as the customers asked for local taste. Its stores were situated far made the premise not accessible to many people (Hunt et al., 2018). In addition, the weakest overseas business has been Walmart in Germany, as the company has experienced the closure of many stores and experienced losses. This is because of staffing issues and implementation issues about the company’s distribution systems.
A study conducted by Izadpanah (2020) stated that Walmart appeases Korean customers by providing locally available goods, including coconut juices, mushrooms, and oats. Adjusting to the realities of the Korean market taught the company the essence of developing relationships with the local communities. The company gained a competitive advantage and outdid its competitors by its service levels and establishing a German function distribution management to solve the expansion issues.
Competition
While the company is the world’s largest company, it has struggled to compete with its competitors, such as Amazon and InstaCart. It has faced issues with its new subscription services Walmart +, in retaining its members. The company has experienced issues with its grocery, which is the growth engine of a business, and its losing share rapidly. Additionally, most of the shoppers in the USA are choosing to select Publix and Albertsons, showing a decrease in customer traffic at Walmart (Saphores & Xu, 2021). The popularity gained by Instacart during the pandemic made Walmart not keep up with the rising customer demands, leading to a decline in the company’s leading position. Walmart has received benefits amidst the Covid-19 pandemic, with the profits and revenue increase in the company’s fiscal year by about eighty percent (Leone et al., 2020). However, its competitors have also benefited, including Amazon and other regional grocery giants such as Texas. InstaCart proved to be a competitor amidst the Covid- 19 pandemic because the online grocery company would store and deliver groceries at the buyer’s door on the same day.
However, to solve the issue of competitive rivalry, Walmart strengthened its in-store and online grocery stores and broadened the financial services offerings. To counteract rising competition from Amazon and InstaCart, the company expanded its Omni-channel presence with in-store pickup and online ordering (Jindal et al., 2021). Additionally, the company reduced its prices, making the customers drawn to the low prices, brand selection, one-stop conveniences, and curbside services. The company opted to expand its financial service offerings compared to its competitors. The company collaborated with Green Dot, Money Gram, and Jackson Hewitt to improve store traffic (Schmidt, 2018).
Big Data Analytics
Amidst the competition faced by Walmart, the company used big data analytics to enhance the groceries sales revenue. Using big data analytics was to optimize the customer’s shopping experiences when browsing on the internet or when they visit the stores. Big data analytics intended to redesign the worldwide websites and develop inventive applications to tailor the customer’s shopping experience alongside enhancing logistics efficiency (Singh et al.,2017). The company uses and NoSQL and Hadoop technologies to give the consumers real-time information and centralize it for efficient use (Grover et al., 2018). Walmart used data mining to determine the points of sales data. It helped the company determine the patterns which could be used to give product recommendations to the buyers based on what product they can buy together (Project Pro, 2021) This has enhanced the company’s conversion rates. The company collected information on what type of groceries the customers buy, where they live, and the most like product in stores. The events are apprehended and analyzed using big data procedures to deduce significant data to enable the consumers to experience personalized shopping encountered, leading to competitive advantages.
Additionally, the company initiated a new subscription service Walmart+, whose function was to allow shoppers to use smartphones to scan and purchase goods at the company’s stores. Walmart experienced improvements regarding the members who renewed the subscriptions. However, the company states that the services needed enhancements in their renewal rates (Rey, 2021). The company experienced issues with the subscription services, including retaining the members who use the discount programs.
Walmart has solved the issue by offering longer free trials and discounted membership to solve the subscription services issue. After the Walmart + launch, the retailer considered other perks, including branded credit and availing product deals. According to Rey (2021), the company felt the pressure of developing its program because, as of 2020, more than half of the company’s spenders had Amazon Prime membership
Sustainability/ Environmental Issue
Food and Water Watch and the Institute for Local Self-Reliance stated that Walmart has perfomed poorly on sustainability issues. Walmart has been faced with the issue of vending substandard products as it reduces the durability and quality of goods (Spicer & Hyatt, 2017). The company has issues regarding the reduction of waste. The company has faced charges of lagging behind on renewable energy. At its present pace, the company has taken a long time to attain its goal of operating 100 percent of renewable power (Cheng, 2018). The company states that the slow progress on renewables is because of costly technology. Between 2005-2010, the company’s greenhouse gas emissions increased by 14% and there are expectations that there will be an increase in the gas emissions (Crawford & Smith, 2019). In addition, Walmart has voraciously consumed land and has expanded more than one thousand supercenters in the US, increasing its footprint by one-third. The issues faced in this were that the stores were enacted in land that had not been developed before and threatened the endangered species. The company controls above 50 % of grocery sales, which has triggered mergers between other dairies and food processors. On the sustainability issues, the company has degraded organic. When the company speaks about organic, it refers to organic processed food allocated on the shelves, such as Kraft Macaroni and cheese. Organic milk has received criticism since they come from cows that have been raised in factory–farm environments. The company claims to increase the locally produced food, but its model favors specific large suppliers, not small farmers when they purchase local produce ( Lovera, 2012).
100 percent Renewable Energy
Presently, Walmart electricity is supplied by renewable energy globally. Walmart’s Global Responsibility Report in 2015 states that 10 % of Walmart products are renewable products made locally. According to Solar Energy Industries Association, Walmart has adopted the on-site installed solar capability compared to its competitors in the USA (Bonugli, 2017). For instance, in Texas, Walmart has bought more than half of the electricity produced from the wind power facility in Texax for a decade (Makower, 2015).Additionally, there exists a utility-scale wind turbine in Calif which produces a megawatt of power in the distribution centers’ yearly electricity use. While the company pushes to lower the prices of its products and those of the customers, it could enable the reduction of solar prices for other customers. The company worked to innovate technology and minimize installation costs to develop a policy environment that reflects the true energy cost.
Zero Wastes
In 2014, Walmart diverted 82.4 % in all stores and distribution centers in the United States. Outside the USA, the company has attained 68 % of waste diversion, and by 2025, it targets on getting rid of landfill waste from the Walmart locations. Getting to zero waste has made the company find solutions for recycling the materials (Neebe, 2020). The company’s most recent efforts in waste removal include enhancing the streams of recycled materials obtainable for the supplier to utilize in packaging and products. In 2014, the company initiated the Closed Loop Fund, which sought to capitalize in the reusing infrastructure, and due to that, there were more recycled materials in the company’s supply chains (Rincón-Moreno et al., 2019). In 2013, the company convened a supply chain summit to converse how to supsurge the number of recycled products in the United States. As part of the effort, Walmart launched a food waste and damage reduction campaign by setting goals to reduce food waste in the emerging market stores.
Greener Products
The consortium created the sustainability index as an assessment tool used by Walmart Suppliers to determine the sustainability performance of their products. According to Maamoun (2020), The company will purchase 70% of the goods sold in US stores from suppliers who strictly utilize the sustainability index to determine and share the product’s sustainability. Walmart has been evaluating ways of communicating sustainable products to the customers, which made the company launch a leader’s sustainability page on its website, identifying products from the firm’s sustainability leaders. This is beneficial to the company as the customers are environmentally conscious and are aware of green products; hence it is easier for the company to bring green products to the market (Elder & Dauvergne, 2017). This makes the products cheaper, and customers save their money while reducing environmental impacts.
Ethical Issues
Despite the company being the largest private employer globally, the company has faced ethical issues regarding worker’s compensation, gender discrimination, and worker’s exploitation. The company was against developing a worker’s union that could enable the workers to work in improved conditions and a platform to air their views against the company (Caraway, 2018.) For example, in 2013, Walmart was sued by National Labor Relations because of its low salaries. It showed that Walmart violated employees’ rights and ill-used workers by offering wages less than minimum salary and denying them overtime. Another instance is a suit about Bangladesh workers who strike because they worked seven days a week for six months with no off days (Njoroge, 2016). Additionally, despite the pressure from employees, they illegally disciplined workers who participated in the strikes, which eventually led to employee turnover.
In a study conducted by Oklahoma University, Walmart has reduced the unemployment rates in the USA. After the lawsuits regarding the worker’s compensation, the company improved the worker’s living standards and welfare. A study conducted by Norway fund ethics found that Walmart had made numerous efforts to enhance its workers’ working conditions and suppliers (Unglesbee, 2019). In 2009, Walmart used third-party auditors to monitor workers’ and suppliers’ working conditions. Additionally, the company focused its efforts on countries with high abuse risks. It maintained a global hotline and email address where the workers reported the case of discrimination and other issues and worked with the government to enhance the company’s working conditions (Unglesbee, 2019).
Covid-19 Pandemic
The Covid- 19 pandemic’s emergence made Walmart close more than 60 stores to sanitize the stores against the virus because the Omicron variant disrupted the retail industry. The spike of the cases led to the company closing the stores and limiting access to customers. For instance, in Maryland, a Walmart store was closed because the community was experiencing high coronavirus cases from two Walmart workers, making many people contract the virus (Naidu & Kaye, 2022). The centers for disease control and prevention recommended that retailers close the areas used by someone who was infected and avoid using the areas before being disinfected. In some cases, the stores were forced to be shut.
Access to Vaccines
Walmart has prioritized health and safety for its employees, and almost 90 percent of the campus office associates have been fully vaccinated. According to Morris (2021), the company reintroduced a vaccine incentive for frontline associates by providing $ 150 after an associate is fully vaccinated. To ensure that the decision was easier, the company ensured that they take a step away from work to be vaccinated by availing the booster shots at the Walmart pharmacies and Sam’s clubs in the US for both the walk up and pre-scheduled appointments. The company safeguarded people within the facilities including the stores and supply chain facilities in the bid of reducing the spread of coronavirus. Additionally, all associates must complete a daily health screening before entering the Walmart building. The plastic shields with enhanced sanitation at the stores and club’s entrances remained in place.
Keeping the worker’s safe
After the company receiving grievances regarding risky working conditions, the company developed strategies of safeguarding employees’ safety by mounting protective Plexiglas barriers at registers and minimizing the buyers entering a store at a given time. Segal, E. (2021) states that The company issues a mask directive for every in-store worker in the high-risk regions and vaccine obligation for the staff. The workers who were not needed to get shots were incentivized through cash bonuses and paid offs if the vaccine affected them.
Conclusion
In conclusion, the issues faced by Walmart include the merger and acquisition, expansion overseas, competition, sustainability issues, ethics issues, and the emergence of covid 19. However, the country has solved the merger and acquisition issues by adapting its products to the local taste and using the freshness, using the store design, and transforming working cultures. Amidst the competition faced by Walmart, the company used extensive data analysis. The company has also improved the worker’s welfare and living standards and increased the employment rates in the USA. In a period of global political and economic volatility, it is vital to analyze the issues faced by multinational companies and solve them.
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