Organizational Culture Wal-Mart

In 2003, with sales at a quarter of a trillion, a double digit

growth rate, and employees exceeding 1.3 million, Wal-Mart
was one of the most successful companies in the world. Not
only was Wal-Mart the biggest retailer in the world, it was also
the biggest customer for companies like Disney, Procter and
Gamble, Revlon, Campbell Soup, Gillette, etc. In addition to
this, it was the biggest seller of DVDs, CDs, groceries, guns,
diamonds and a number of other products in the US. Wal-
Mart was a super-retailer where a customer could get
whatever he wanted under one roof. The company thrived on
convenience and reasonably priced products. Wal-Mart
always gave more importance to volumes than margins and
promised customers the lowest prices on every kind of goods.
Analysts believe that culture is one of the most important
determinants in making a good company a ”great‘ one. The
success of Wal-Mart has long since been attributed to the
company‘s strong cultural base.
Analyst Jim Collins observed that Wal-Mart had the kind of ”cult-
like‘ culture that is shared by all great companies. Even the
employees of Wal-Mart were sometimes referred to as —
Walmartians“ by outsiders, reflecting the distinctiveness of the
people who shared that culture. It was a wonder that a company of
such a huge size and scope could maintain its entrepreneurial spirit
so many decades after it first started, besides achieving admirable
growth rates which were poised to make it the first trillion dollar
company in the world.. Analysts attribute Wal-Mart‘s success to its
strong and pervasive culture. In spite of its huge size and
tremendous growth rate, the company retained most of the
cultural elements which contributed to its success in the early
years. Walton believed that happy and satisfied employees
performed well and were responsible for happy customers. Wal-
Mart‘s culture was essentially customer-centric and service-
oriented. It embodied Walton‘s dream of creating a store which
provided the best value at the lowest prices.
A unity of purpose and a spirit of oneness was
created and maintained across the organization.
Some unique features bound the people
associated with Wal-Mart together, one of these
being that Wal-Mart followed a separate calendar
which was based on ”Wal-Mart time‘, i.e. ”week 1‘
in the calendar was the first week of the
company‘s fiscal year that started on February
1every year.
Wal-Mart‘s culture was built on three basic beliefs or tenets
established by Walton in1962, when Wal-Mart was first set
up. These tenets constituted the foundation of its culture in
later years. Wal-Mart realized that employees played a very
important role in the success of a retail business and gave
considerable importance to them. To instill a spirit of
equality and oneness among employees, the company
adopted the practice of terming employees ”associates‘,
thus creating in them a sense of belonging and involvement
in Wal-Mart‘s activities and success. Walton believed that if
he took care of the employees, they would take care of the
customers in the same manner. He tried to create a positive
and cheerful atmosphere in the company.
Wal-Mart was one of the first companies to introduce profit
sharing and stock options for its employees. After it went public,
Wal-Mart began its —Profit Sharing Plan“. The plan offered an
opportunity to its employees to improve their income depending
on the profitability of the store. Employees were also offered
stock options and store discounts. This was to motivate them to
take an active interest in the working of the company .A system
of performance linked compensation and bonus also ensured that
employees contributed their best to the organization. One of the
unique features of Wal-Mart‘s human resource policy was that
the company did not authorize overtimework. It did not allow
store managers to overburden employees with work. The
company was also committed to improving the career prospects
of its employees. It had a policy of recruiting more than 70
percent of its personnel in managerial positions from the ranks of
hourly workers in the stores.
 
Wal-Mart was the realization of the dream of Sam Walton
(Walton), who wanted to set up a store which provided
customers ”high value, low prices and a warm welcome‘. He
initiated a ceremony in 1962 that thrives to this day and remains
the heartbeat of Walmart Culture. The ceremony of Saturday
Morning Meetings serves as model for other Wal Mart
ceremonies, all of which begin with the Wal Mart cheer- the
daily shift change meetings in the stores, weekly management
operations meetings, and five annual companywide mega
meetings that each draw more than 10000 participants. These
frequent meetings and ceremonies , part business and part pep
rally, are credited with enabling Wal mart executives to operate
a huge, complex global business on a weekly and sometimes
daily basis , moving fast to outflank competitors. But just as
importantly, they serve as a way to reinforce and personify the
strong corporate culture . Ads former vice chairman, Don
Soderquist said, “When your company gets as big as ours, you
still need to feel that this is a family, that you are in on things”
Walton‘s store was very successful. Most of the
success came from his innovative ideas. He realized
that he could obtain competitive advantage by buying
products in bulk directly from manufacturers and
offering them at lower prices to customers. He also
kept the store open for longer hours than his
competitors and took advantage of its good central
location. In the very first year, Walton earned a profit
with his cost-cutting ideas.