Case study on human resource management of Walmart
Question
Task:
Human Resource Management Assignment: Challenges Encounter by Walmart
1. Choose an organisation in the retail sector. Provide a brief introduction about the selected company e.g., its core key businesses, market size, geographical operations etc.
2. Highlight the external and internal challenges the organisation is currently facing and will be facing in the future.
3. Discuss TWO (2) key HR functions that will be impacted by these challenges. You should provide reasons why these functions are affected.
4. Provide specific strategic HR recommendations to address these challenges. These recommendations must support the organisation’s objective.
5. Relevant theories, concepts and models must be applied to support your arguments
Answer
Introduction
This study developed in the human resource management assignment aims to evaluate the strategic function of human resource management of the U.S. largest and fast-growing global retailer store named Walmart. Before determining the issues, analyzing the background is essential that is also described in this study. Both types of challenges such as internal as well as external are also defined with suitable strategies that help to overcome the issues as well through the function of human resource management (HRM). The key factors and a set of recommendations are also defined in this study. The main purpose of this study is to determine the challenges faced by the retail store and suggest suitable solutions as needed.
Company background
The U.S based company, Walmart is known as a rapidly growing company as it sells a wide variation of merchandise at a very low and affordable price. According to the financial records, between the years 2005 to 2014, Walmart collected over 3.9 trillion dollars from net sales (Statista 2021). In the year 1962, on 2nd July this retailer company was founded in Arkansas of the U.S. and from then it has spread its span in a well-being manner. As a result, now the company has more than 10,500 stores along with e-commercial websites (Walmart.com 2021). Over the 50 years, it has built a loyal and strong customer base by stayed strong to the purpose and offers daily-based needs at low price with consistency. Surprisingly, according to McMillion the most selling item for Walmart is ‘banana’ in the year 2020. The fact is that the bananas of this store are totally organic and come from Central America or Mexico. The merchandise of Walmart is using approx 70-80% of the Chinese product along with 20% of America-based products (Son et al., 2018). The Walmart store in the Crossgate Commons is considered as the biggest Walmart as it occupying in two floors with a large area of 260,000 sqft.
Figure1: economic growth graph of Walmart by net sales
(Source: Statista 2021)
Evaluation of the internal and external challenges
External:Although Walmart is known as the most popular retailer, it also faced some challenges such as joint venture, negative reputation, stiff competition along with business acquisitions constantly in the markets of foreign (Colacicco 2018). It struggled from the competition in the market of North America as well as in South Korea. It dominates about 2% of the food market of Germany but still, a number of stiff competitors are there who raise issues. In the market of Mexico and Canada, it has tough competitors like Giant tiger, Soriana, Kmart, ShopKo, Costco whose create barriers in the path of well-establishing. Also, various cases were reported against Walmart related to exploitation of the employee such as low price and wages, sexual harassment issues (Leighton 2018). These issues create barriers to the expansion as well as ruin the cultural tradition and values for the company. In the future, it creates issues in the path of expansion also.
Internal:Besides this, the main problem that arises most from the employee is low wages. Walmart recruited a large number of employees but not paying the appropriate wages that cause problems for the employees to bear family costs as well (Pandey et al. 2021). This internal problem of low wages affects the brand reputation. The management of the corporation was reluctant many times for increasing the wages but this is not solved yet. In the future, it creates issues in employee recruitment that affects the productivity of the organization as well.
The impact on the key factors of the HR function
For overcoming the key challenges faced by this largest retailer, it has to be identified the key factors from the management that impact the most.
Human Resource Planning (HRP): The planning procedure of human resource management is the key factor as it defines the statistics for the employee management as well. According to the Transaction cost theory by Williamson in the year 1986, states that the optimum infrastructure of the organization is the factor that helps to attain the efficiency of the economic structure by reducing the exchange of the cost (Rindfleisch 2020). It also considers as the economic theory that gives a framework structure by analysis for obtaining the contractual relations for the governance structure across the supply chain. For improving economic efficiency a proper human resource planning is needed (Mishra 2017). In this case, the infrastructure of the HRP of Walmart faces the problem like stiff competitors in the path of establishing their brand value due to the lack of a proper HRP. The organization fails to maintain strategic planning in a well-being manner which is effective for creating pressure on the competitors.
Selection and Recruiting: The process of selecting and recruiting suitable employees is the key responsibility of an HRM. For maintaining sustainable growth along with the brand reputation it is important to select and recruit the appropriate employee by the HRM (Azam, and Qureshi 2021). Without a suitable employee, an organization is lead forward to the loss and also has lost its reputation as well.
According to the theory of ‘strategic contingency’, that represents the organizational theory with suggesting the effective order. It states that HRM needs to attach well to the organizational aspects in both internal and external environments as well (Shah, and Khan 2019). It assumes that departments within an organization need experts who are able to manage the labor division and creates contingencies that are strategic well. By controlling the contingencies, a good HRM can serve the base of the Intra organizational power as well. For Walmart, the facts of human resource theory are not working well as they are failed to managing the wages and sexual issues raised by the employees. It leads to arises challenges like employee exploitation.
Strategic Recommendation
The human resource strategy needs to focus more on the employees by doing everything possible for their satisfaction by reducing the expenses that result in the ability to offer the lowest cost that creates pressure on the competitors as well. They need to assess the workforce capabilities by using various parameters and go ahead proactively to face the competitors.
For overcoming the problem of low wages for the employees they should follow the theory of ‘Wages Fund Theory’ as it states that wages vary on the relevant capital amounts for the labor force’s size and worker’s payment. According to this theory, wages vary on the number of employees with the fund (Di Pietro, Monaghan, and O'HaganLuff 2021).
Walmart needs to determine the fund first then occupy the recruiting process instead of recruit a large number.
The HRM function needs to be more focused to create synergistic teamwork that makes the employees highly productive as well as creates pressure on the competitors by maintaining a high level of standard in the supply chain management. They need to develop some development and training programs that help to improve productivity as well.
Another theory of management named ‘Systems management theory’ states that the type of large business needs to work harmoniously so that the system function can be regulated optimally (Dundon, and Rafferty 2020). Based on this theory Walmart needs to be more focused on promoting the appropriate employee instead of recruiting new as well.
Conclusion
Walmart is a brand that has a large expansion globally but faces issues in the path of establishing its significance as well. This study clarifies that most of the issues arise mainly due to the lack of managing power of the existing management. By implementing the recommendations and overlooking the key factors they can easily improve the barriers for overcoming the challenges that they faced. From the above study, it can be concluded that the Arkansas-based retailer Walmart has a good infrastructure but needs some strategic changes in human resource management that improve the enhancing factors for the expansion.
Reference list
Azam, M.U.H.A.M.M.A.D. and Qureshi, J.A., 2021. Building employer brand image for accumulating intellectual capital: Exploring employees' perspective in higher educational institutes. Estudios De EconomiaAplicada, 39(2), pp.1-15. [Avaialble at: https://www.researchgate.net/profile/Jawaid-Qureshi/publication/349167953_Building_Employer_Brand_Image_for_accumulating_Intellectual_Capital/
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Colacicco, G., 2018. Internationalization decisions in the retailing sector: Walmart in South Korea. [Available at: http://tesi.luiss.it/22478/1/680911_COLACICCO_GIANLUCA_LUISS_THESIS_%
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Di Pietro, F., Monaghan, S. and O'Hagan Luff, M., 2021.Entrepreneurial finance and HRM practices in small firms.British Journal of Management. [Available at: https://onlinelibrary.wiley.com/doi/abs/10.1111/1467-8551.12493] Dundon, T. and Rafferty, A., 2018. The (potential) demise of HRM.Human Resource Management Journal, 28(3), pp.377-391. [Available at: https://www.sciencedirect.com/science/article/pii/S0148296320304112]
Leighton, P., 2018. No criminology of wage theft: Revisiting “workplace theft” to expose capitalist exploitation.Human resource management assignment In Revisiting Crimes of the Powerful (pp. 188-201).Routledge. [Avaialble at: https://www.taylorfrancis.com/chapters/edit/10.4324/9781315212333-16/criminology-wage-theft-paul-leighton]
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Shah, A.U. and Khan, M.I., 2019. HRM-Performance Perspectives: An overview of Theoratical Challenges and Prospects. Engineering Economics, 30(3), pp.382-393. [Available at: https://www.inzeko.ktu.lt/index.php/EE/article/view/9550]
Son, J., Baek, J., Park, H. and Kim, C., 2018. The localized merchandising for international retailers: A study of Tesco’s failure in Japan. Ritsumeikan Business Review, 56(5), pp.1-20. [Available at: https://ritsumei.repo.nii.ac.jp/action=repository_action_common_download& item_id=1291&item_no=1&attribute_id=22&file_no=1]
Statista. 2021. Walmart U.S. sales growth 2021 | Statista. [online] Available at:
