Innovation at Walmart and Wegmans
Comparison between innovation at Walmart and Wegmans
The mission of Walmart is to lower the cost living and encouragesaving on its customers. The store deals with a selection ofgroceries and general merchandise. Regional vice president, whooversees district managers, each store management and otheremployees, operates each retail store. Store management includesco-managers, store managers, management trainees and assistantmanagers. Walmart has a bureaucratic structure which was changedslightly in the year 2010. The store is operated in three divisionsthat is, store operations and real estate (that have been put underone leadership) and logistics division. The store has divided itsoperations geographically into South, North and West business unitstherefore, Walmart is geographically departmentalized rather than thefunctional departmentalization. In the hierarchy of power, Walmart isheaded by the group CEO, the board of governors (which comprise thecompany’s CFO, COO, CIO and board chairperson) and the three CEO’sof Wal-Mart United States, Sam’s Club and Walmart international.Major decisions (such as merchandise price and supply chainmanagement) with the stores are made by the store management whichreduces the span of control. The store has a well-established chainof command (Massengill, 2013).
The bureaucratic hierarchy facilitates the communication andharmonization of the strategy in all the stores of Walmart Company.Walmart has stores in many regions around the world. All the storesare operating using the same values and have a common objective whichis to cater for the interest of all the stakeholders of the company(Holtom, B. C., Mitchell & Lee 2006).. The division of thecompanies into three main operation units helps each unit to focus onits area. The top management streamlines the operations off all thedepartments to the attaining the common goal of the organization.However, the long bureaucracy in the organization has somedisadvantages which include breakdown of communication, the poorrelation between the management and the employees, dissatisfaction tothe customers and low rate of innovation (Hornblower, 2004).
On the hand, Wegmans was established under the mission of offeringquality products and services and providing a positive workingenvironment. The company is overseeing by the board of governors.Unlike, Walmart, Wegmans board of governors is made up of externalmembers except the group CEO. The CEO of Wegmans acts as the linkbetween the board of governors and the company. The CEO of thecompany oversees the three five major divisions of the company, thatis finance and accounting department, consumer affairs department,legal department and store operations department (Plunkett, 2014).Each division has the head management. The top management comprisethe group CEO, the Stores president, Chief finance officer, head oflegal and secretary to the company, head of consumer affairs and thehead of stores operations.
Wegmans has 83 stores located in various regions. Every store isoverseeing by the store manager. The store manager makes the decisionin liaison with the top management. The company has a good flow ofcommand but is operations are more decentralised than Walmart.Difference in the organization design of the two stores is determinedby the size of each store. Walmart has many branches that are morediverse than Wegmans. Walmart operates under different names and somestores are franchised. On the other hand, Wegmans does not focus onfranchising its stores and, therefore, it has a very short chain ofcommand (Plunkett, 2014).
The short bureaucracy in Wegmans Company helps to overcome thedisadvantages of communication breakdown and other shortcomings ofthe long bureaucracy. The short bureaucracy in its structural designensures that its more than 83 stores are coordinated. Both Walmartand Wegmans use proper display and designing of the stores to ensurethat the customers are able to access all the materials that theyneed easily. When designing the stores, Wegmans and Walmart ensuresthat, the consumer and home products are the first to be accessed(Manners, 2004). Proper designing of the store ensure customersatisfaction. Both stores have also ensured that all jobs aredesigned as per the requirement of each business unit.
Organization design at Walmart and Wegmans
Wal-Mart is the head, the executive, the manager, and the biggestfamily-owned business that handles chains of other brands andbusinesses. It is the director, the planner, and the master of allstrategies to gain competitive advantage while at the same timeearning high profits. It claims to be greatly concerned with theAmerican consumers.
Wal-Mart is a retail giant. It has chains of products and servicesfrom almost all businesses – big and small. Companies aspire to bepart of Wal-Mart for the reason that it covers the largest number ofconsumers. Wal-Mart does what it believes would be beneficial for theAmerican consumers while at the same time advantageous for thebusiness. It is a tough business with rigid policies and it alsoexpects the rest of the vendors to adhere to what Wal-Mart desires orthey will be completely expelled from doing business with the retailgiant. It threatens businesses that do not submit to their will bytelling them that if they do not comply with what Wal-Mart proposes,the company will seek out other businesses that offer the sameservices but are willing to bend in to what Wal-Mart wishes.
Wal-Mart applies Darwinian Theory’s “Survival of the Fittest”.It takes advantage of its position in the market as well as itsmarketability to consumers. It squeezes out every strategy to get thecheapest value for the product they like to retail in their market.If business owners resist its negotiated price value, it tries tofind other businesses that offer the same products. Wal-Mart appliesselective distribution. It caters only businesses that can providethe cheapest price for their products. This simply implies that ifconsumers want to buy affordable products, Wal-Mart’s retail storeshave it all.
The way workers are managed at work is a crucial part of themanagement procedure. In a work setting in which the managementhandles a lower-level job, compensation and motivation are two of thefactors that must be implemented by the company in order to obtainthe workers’ loyalty and commitment. To obtain understanding of thecritical importance of workers in the organization is to determinethat the human element and the organization are similar. Awell-managed organization usually perceives an average worker as theprimary source of output gains. These organizations do not look toprincipal investment, but to workers, as the fundamental source ofgrowth. An effective organization will guarantee that there is asense of collaboration and spirit of dedication as well as fulfilmentin the sphere of its influence.
For Walmart, motivation is one of its most basic undertakings thatresults to the company’s success. Walmart considers all attempts tomake their workers feel as though they are part of the businessbecause they are the one of the sources of new concepts for Walmartto create. Motivation is present in all aspects of Walmart. Thecompany ensures that employees are motivated in diverse ways so as toprove that the business is not merely about profit that they mayobtain from labourers but also on crises that the employees maylikely encounter. Hence, Walmart addresses its employees as thecompany’s associates because this makes the employees feel morecommitted and involved in the company. Further, Walmart ensures thatall its associates wear their ID badge with only their first name onit. Hence, from hourly associates to managers in top position andeven to the company’s founder, everybody addresses each other bytheir first name. This does not only create harmonious and friendlyworking relationship but also a family oriented one.
Wegmans is also one of the most renowned supermarkets. Wegmans is aprivately owned company. Wegmans store emphasises innovation from itssuppliers and employees. The new company strategy comprises workingwith customers who have innovative and creative products which canamaze the customers. Majority of Wegmans customers are happy aboutthe chain’s items including organic and foreign selections ingroceries. The company likewise has wide selections of beers andother craft brews. There are ready to cook meals and wide array ofcandy selections. All products are also sold at reasonable costs.Wegmans has embraced internally acquired innovation in largedimension. In the year 2013, the company announced a partnership withthe University of Cornel in a pilot programme that will teachstudents to make hands-on cheese. This innovative idea will lead tohigh support to the local cheese industry, and create job andeconomic opportunities in the region (New York) (Plunkett, 2014). Themove will lead to low cost in the supply of cheese and increase itsefficiency that will benefit customers.
Wegmans is in the process of adopting new packaging techniques. Thecompany intends to have its products packaged in an environmentallyfriendly way and away that can differentiate its products from othercompetitors. This innovation in packaging will ensure that thecompany has a sustainable plan. Wegmans has upgraded many productssuch as refrigerated window displays, vaporized water store,cafeteria lounge and homemade candy shop (Plunkett, 2014). Since itwas founded, the company has changed its customer service to include24 hours services, inclusion of pharmaceutical department and giftcards.
Walmart and Wegmans have used job, structure, store and productsdesign to ensure that their values and missions are attained. Walmarthas a long bureaucratic structure, good job designing and hasinvested much in internal design of it stores. This design has helpedthe company to differentiate itself and position itself properly inthe market. On the other hand, Wegmans has a short bureaucracy andservices departmentation. The store embraces excellent display anddesigning of its stores. The design has helped the store to pursueits mission and offer quality services. In brief, organizationaldesign has played a big role in positioning and differentiating thebusiness of Walmart and Wegmans.
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