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The Key to Wal-Mart's Success

The Key to Wal-Mart's Success

The Key to Wal-Mart's Success
In 1962, San Walton founded Wal-Mart in Roger, Arkansas. "As in all things, in our people practices, we take to heart our core belief to strive for excellence. That means constantly looking for ways to improve, whether it's connecting executive compensation to diversity goals or improving the supplier application process. Improving these vital relationships is key to a better Wal-Mart and a better world" (People, n.d., ¶2).
The key to Wal-Marts success can be attributed by the way management evaluates performance through motivation, ethics, and conflict management.
Applying Motivational Principles
Sam Walton had a vision for building a business and four decades later Sam's vision became a successful reality. Wal-Mart's associates have enabled the organization to become the largest retailer in the world consisting of "2,700 Wal-Mart stores, 495 SAM's Clubs and 1,150 international stores currently in operation" (Divisions, n.d., ¶1). Sam's dream of a global retailer also became a reality by meeting the needs of customer's worldwide. The secret to the Sam Walton's success is attributed to the rules and principles that are used to run the organization. Sam Walton used 10 motivational principles or otherwise known as Sam's Rules for Building a Business. The rules have helped the organization focus on the principles used for four decades and

are factors of the company's success. The following 10 rules are how applied motivational principles lead to the successfulness of Wal-Mart and the other Walton properties.
"Rule one is committing to your business" (Sam's Rules for Building a Business, n.d., catg. 255, ¶2). Committing to an organization whole heartedly with absolute passion can be contagious to other employees of an organization. Employees will do the best they can and others will follow having the same passion that will make going to work everyday more pleasant rather than employees coming to work hating his or her job.
"Rule two is Share your profits with all your associates, and treat them as partners." (Sam's Rules for Building a Business, n.d., catg. 255, ¶3). Encouraging employees to be partners in an organization will result in high performance and more production. Giving employees a stake in the company is accomplished by offering discounted stock and retirement benefits can be very motivational.
"Rule three is "Motivate your partners" (Sam's Rules for Building a Business, n.d., catg. 255, ¶4). Earnings and ownership is sometimes not enough to keep the employees motivated. Thinking of different ways to motivate and challenge employees is very important. Some ways of accomplishing motivation and challenges is by setting high goals, encourage competition and keep track who wins. Mix things up by not being predictable to keep the employees challenged
"Rule four

is "Communicate everything you possibly can to your partners" (Sam's Rules for Building a Business, n.d., catg. 255, ¶5). This rule deals with empowering employees. Letting employees know more about how the organization works, the more employees will care about the organization. Having trust in an employee will gain more than the risks of information being used by competitors.
"Rule five is "Appreciate everything your associates do for the business" (Sam's Rules for Building a Business, n.d., catg. 255, ¶6). The money or bonuses that an employee receives for doing his or her job is only one way to show appreciation to employees. Just a few words of appreciation or a pat on the back can be very motivational and make the employee proud of the job that was completed. Words do not cost the company, but the gain from a few praises can be priceless.
Rule six is "Celebrate your successes" (Sam's Rules for Building a Business, n.d., catg. 255, ¶7). Go out of the box. Be silly, have fun, loosen up and everyone will follow. Make the competitors wonder if they should take the organization seriously.
Rule seven is "Listen to everyone in your company" (Sam's Rules for Building a Business, n.d., catg. 255, ¶8). Employees who are involved with the customers know the most of what the customer wants. An employer needs to listen to what the employees have to add to the quality of the business. Give employees the responsibility to come up with good

ideas that will benefit the organization.
Rule eight is "Exceed your customers' expectations" (Sam's Rules for Building a Business, n.d., catg. 255, ¶9). Give the customers what is wanted and the customers will return. No excuses should be used to cover up mistakes. Apologies must be made an not excuses. Have pride in the organizations products and guarantee satisfaction to the customer, always.
Rule nine is "Control your expenses better than your competition." (Sam's Rules for Building a Business, n.d., catg. 255, ¶10). Wal-Mart has been ranked number one in the nation for being the nation's largest retailer. A motivated group of employees and good business sense of keeping expenses low and income high is what has kept Wal-Mart to have an efficient operation.
Rule 10 is "Swim upstream" (Sam's Rules for Building a Business, n.d., catg. 255, ¶11). Wal-Mart does business differently from the competitors. Finding a niche that the competitors does not have brings success to the operation.
The biggest motivator of all for an employee is the fact that Wal-Mart has been around for over 40 years and will most likely be around another 40 years. An employee can not get any better statistics for job security. Sam Walton motivated the employees and gets back the desired results that he wanted from his motivational tactics. Employees' are proud to work for an organization that gives back so much to the employees, customers, and the communities.
Evaluating

the Organization's Ethics Program
In the past, Wal-Mart has been criticized for the organization's business ethics. Bad publicity towards wages that the female employees received compared to the male counterpart's wages was an important ethical issue. Another issue was in regard to the benefits program for the employees. Today, health benefits, promoting from within, wages and the respect for employees are important strides that has contributed to Wal-Mart's success. Wal-Mart has come a long way in regard to these issues by committing the organization to a strict ethical standards program. Wal-Mart's growth and success can also be contributed through the excellence the organization offers to the customers by meeting the merchandising needs and wants (Ethical Standards Fact Sheet, n.d.). Wal-Mart has a very diverse workforce, suppliers, and customer base. Equal opportunity is a very important issue of the organization. Commitment to treat customers and employees "with fairness and respect, to be their advocates, to be sensitive to their causes, to value their differences and to serve them as best as we can has never changed" is stated in the Equality of Opportunity Policy, (n.d., ¶3).
Some of the concerns that Wal-Mart focuses on globally are the impact of sourcing, factory workers and the communities around the world (Ethical Standards Fact Sheet, n.d.). A very important step towards Wal-Mart's ethics program is the investment

in the Ethical Standards Program. In 1992, Wal-Mart started an ethical standards program and a code of conduct which the stakeholders have a vital say in regard to he program. Lee Scott, President and CEO of Wal-Mart Stores, Inc., 2006 states,
"Wal-Mart's Ethical Standards program was established and exists to verify factory compliance with our Standards for Suppliers (code of conduct), to strengthen the implementation of positive labor and environmental practices in factories, and to bring opportunities for a better life in the countries where merchandise for sale by Wal-Mart is sourced" (Ethical Standards Fact Sheet, n.d., catg. 720, ¶2).
Accomplishing the commitment to employees, customers, suppliers, and stakeholders and addressing industry challenges by finding solutions has made Wal-Mart a leader in the retail chain industry.
Using Direct and Indirect Approaches to Conflict Management
In finding solutions to conflict management, Wal-Mart takes a preferred course of collaborating responses. "Collaborating responses are attempts to fully meet the concerns of both parties. To use a collaborating response, the parties must work together to identify solutions in which both parties can win" (Hitt, Miller and Colella, 2006, p.448, ¶4). Wal-Mart's emphasis of engraving collaborative technique's to maintain communication, feedback, and involvement of their employees, customers, suppliers, and stakeholders keep them progressing

through constant change that continually transforms the organization. The most direct approach Wal-Mart has to conflict management is the commitment to manage transformational change through the "Out in Front" program.
Lee Scott during his keynote speech at the 2006, 36th annual shareholders meeting outlined the five pillar plan of the "Out in Front' program as (1) broadening Wal-Mart's appeal to customer, (2) becoming an even better place to work, (3) improving business operations and efficiency, (4) Driving growth in the company's international business, and (5) making unique contributions to the community" (Wal-Mart Culture, catg. 619, ¶4) .
Saturday Morning meetings at Wal-Mart use many indirect conflict management responses but the thing to realize is that the use of indirect conflict management responses throughout every objective is Wal-Mart's direct response to conflict management. It states the Wal-Mart website on the Saturday Morning Meeting link "But beyond focusing on giving good news…we use that valuable time to critique our business" and "We review what we could do better and encourage suggestions about correcting those weaknesses" ( n.d., catg. 260, ¶3-4). This allows involvement of all to focus on the changes and to be empowered by being a part of the change which can inspire more ideas and maintain motivation. To drive this point the website also states, ""we discuss and debate management philosophy and strategy.

It's the focal point of our communication efforts, where we share ideas…and instead of shooting those ideas down, we try to figure out how to make them work" (Saturday Morning Meeting, n.d., catg. 260, ¶4) . This allows each person to remember they can be heard and that they need to let others be heard which can reduce the onset of conflict. Wal-Mart's morning and sometimes throughout the day cheer and their philosophy that associates can have fun while working is also another example of motivation as indirect responses to conflict management. "It's sort of a 'whistle while you work' philosophy, and we not only have a heck of a good time with it, we work better because of it" (The Wal-Mart Cheer, n.d., catg. 259, ¶7).
Wal-Mart also has the founders "Sam's Rules for Building a Business." In the 10th and last rule an acknowledgement of conflict to come, "…be prepared for a lot of folks to wave you down and tell you you're headed the wrong way" (Sam's Rules for Building a Business, n.d., catg. 255, ¶11). Acceptance of conflict and collaborative conflict management by Wal-Mart is to motivate, inspire, and encourage feedback to constantly stay on top of the focus of change together.
Makings of a High Performance Organization Many organizations spend valuable time and money trying to manage its hard resources. Although Wal-Mart is no exception, they realize that their success lies within its people. Employees, managers and suppliers

make the organization work and the organization is always working for its customers and shareholders. This ability to effectively manage the human side of the business is what separates them from others and makes them a high performance organization. The placement of an ethics program within the organization is an important element that helps it achieve a standard of high performance. Their policy of equal opportunity commits to treating employees and customers with respect and fairness, to be stakeholder advocates, to be socially responsible and to value diversity. The organization has also implemented a pattern of growth that crosses global boundaries and centers around sourcing, factory workers and surrounding communities. Incorporated in their organizational culture is their plight to strengthen positive labor, environmental practices in factories, and better opportunities for those who live in countries where Wal-Mart merchandise is sold. Organizations that incorporate good ethics in their environments usually have high levels of motivation that fosters innovation.
The company has also adopted a leadership style that promotes high performance. Their use of the collaborative system of leadership has proved vital in their implementation of management styles. Leadership plays a major part in creating an atmosphere conducive to an effective team. They, more than anyone else, create the conditions that foster a productive working

environment. Many, however, don't understand the weight they carry regarding their behavior and its direct impact on bottom line results. The organizations collaborative system of maintaining information and feedback through stakeholder involvement keeps them competitive and constantly topping the market. They implement a weekly forum of Saturday morning meetings which addresses possible changes to the current system and encourages feedback from employees. In the Saturday morning forum, ideas are encouraged and strategies are formed on how to successfully make these ideas work. This forum of open communication aligns with the organizations philosophy of creating an environment that's fun, motivating, and inspiring. With advances in technology, globalization and trends in social awareness, many organizations are finding pressures to stay competitive are taxing on employees. The challenge becomes how to maintain a status of high performance while balancing the demands that come with it.
Conclusion
Wal-Mart, like many of today's most successful organizations, has created a business culture that drive it's workforce to perform at peak levels. Through motivation, management styles and a system of ethics, it has maintained an organization that fosters high performance. Sam Walton's vision of discount retailing and business sense has made him a very successful man. Through innovative motivation, ethical culture, and Sam's caring about

the customers has made Wal-Mart Corporation the leader in the retail industry.

References
Hitt, M. A., and Miller C. and Colella A., (2006). Organizational Behavior: A Strategic Approach, 1st Edition. John Wiley & Sons, Inc. Retrieved September 26, 2007, from UOP rEsource.
Wal-Mart Corporation
Equal Opportunity Program (n.d.) Retrieved on October 9, 2007 from http://walmartstores.com/GlobalWMStoresWeb/navigate.do?catg=12
People (n.d.) Retrieved on October 9, 2007 from http://walmartstores.com/GlobalWMStoresWeb/navigate.do?catg=215
Sam's Rules for Building a Business (n.d.) Retrieved October 10, 2007 from http://walmartstores.com/GlobalWMStoresWeb/navigate.do?catg=255 The Wal-Mart Cheer (n.d.) Retrieved October 10, 2007 from http://walmartstores.com/GlobalWMStoresWeb/navigate.do?catg=259 Saturday Morning Meeting (n.d.) Retrieved October 10, 2007 from http://walmartstores.com/GlobalWMStoresWeb/navigate.do?catg=260 Divisions (n.d.) Retrieved October 15, 2007 from http://www.walmartstores.com/GlobalWMStoresWeb/navigate.do?catg=261 Wal-Mart Culture (n.d.) Retrieved October 10, 2007 from http://walmartstores.com/GlobalWMStoresWeb/navigate.do?catg=619 Wal-Mart's Ethical Standards Fact Sheet (n.d.) Retrieved on October 9, 2007 from http://walmartstores.com/Files/EthicalStandardsFactSheet.pdf
Wal-Mart's Ethical Standards Program (n.d.) Retrieved on October 9, 2007 from http://walmartstores.com/GlobalWMStoresWeb/navigate.do?catg=720

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