Operational Issues, Essay Example

Abstract

Wal-Mart marks one of the biggest retailers in the world. It serves continents as Asia, Europe and South America and plans to expand even in the near future ( Bianco & Zellner 18). It attempts to penetrate into hypermarkets in every country it enters but faced with operational issues that make acquisitions and joint venture with local businesses became a problem. Wal-Mart faced with several operational issues, but this paper will focus on the supply chain and the human resource management.

Operational management as discussed is the organizing and controlling of business activities for achievement of the provision of goods, services to customers. It is an area that oversees and predicts the activities of the business thus plays a crucial role in decision-making. Operation management is an area that ensures the business operations are effective, and efficient to meet customer’s needs and requirements. Organization operations hold a fundamental role in any business, and failure to carry out operational management properly would mean failure of the business. Wal-Mart is no exemption in analyzing the operational issues facing it.

Current supply chain at the Wal-Mart

There has been a poor relationship with suppliers of Wal-Mart in International Market. Wal-Mart Company is not applying standards in the US with local suppliers. The relationship among retailers and manufacturers is quite different from the USA, where in the US, Wal-Mart sets the prices and standards, and suppliers have to follow the rules and regulations. Wal-Mart is, therefore, able to buy and sell cheaply making it the biggest retailer in the United States. However, in some countries, the manufacturers ban Wal-Mart to sell products at the price below cost. Local suppliers in such countries refuse to give significant discount or sell products to Wal-Mart. These, together with irregularity of delivery by the supplier’s inventory control problems, lead shot in products on the shelf. Wal-Mart sets the tone with its venders for buying and selling using sales representatives. There is a report that revealed that 100,000 independent manufacturers’ representatives started a public information campaign to fight Wal-Mart’s effort. They aimed at removing them from the selling process. They did this claiming Wal-Mart eliminated manufacturer’s right to choose how it sells its products. They claimed that as their suppliers committed themselves to improving employee productivity, improve their facilities and machinery, Wal-Mart is there being tough on them (Rock 53). In fact, vendors forced to shift their operations to China or elsewhere to get lower cost. This is if they still want to be associated with Wal-Mart. Some manufacturers forced to lay off workers after Wal-Mart cancelled orders because another vender cut its price a few cents more.

The company currently handles such cases by trying to adopt the regulations within those countries affected. It tries to adjust its buying and selling prices in order to fit into the system. Wal-Mart only dumps suppliers if the prices and qualities do not meet standardize. Wal-Mart appears to be a jeopardy customer to its suppliers despite their efforts. However, it is, trying its best to create a strong supply chain in the international marketplace.

Current Human Resource Management at the Wal-Mart

Wal-Mart faces significant challenges in human resource management especially to do with social issues involving unfairness in employment. Wal-Mart is a large store, which will do anything just about to get bigger, however, its employment problems seen in headlines. There are cases of Illegal immigrants mopping its floors, Sex discrimination, and low wages that lead workers to strike.

The greatest issue arises from unions and community groups. The unions complain that Wal-Mart stores not only take advantage of the staff’s income, but they do not pay for their health insurance covers and any allowances. This is disgusting since the workers work hard to give the company high performances, with poor pay and low or no benefits at all. Employees also complain of not paid for overtime working hours (Rock 93). It is embarrassing that in February 2004, employees who forced to work overtime between 1994 and 1999, without pay, brought complain. A ruling brought forward, and Wal-Mart forced to pay these workers for their overtime hours.

Another problem of Wal-Mart is its lack of human capital due to its rapid growth. Wal-Mart argued that it could not claim to be an international company when the managers in the foreign countries do not speak the language of that country. Again, Wal-Mart cannot maintain local employees’ as in the United States employees. Employees including managers lack experiences in the company’s culture, though they slowly adjusted the issue.

Sexual discrimination is another eternal problem where women employees ignored in terms of promotion. Some of women staffs told they unsuited being managers since the working hours are too long. They may end up being at work at times they should spend time with their children. Available data show that, the percentage of women employed by Wal-Mart decreased from 76 % to 64 % since 1996 Besides when employees promoted to higher-level jobs, the only favor done to women was transferring them to other stores located elsewhere. This results in women resigning from such jobs due to their inflexibility to relocate.

In the olden days, the issue of discriminating women because they need to take care of the families could have been necessary. It is, however, not appropriate now since newer ways of caring for the family has developed, and women supposed to contribute in raising their families. With the growth of the company, newer ways to get in touch with the evolving communities and the world in general needs finding. Mangers, for example, hired locally and developed to meet the standards of Wal-Mart. The women in this case have given chances to develop careers in management.

Conclusions

Wal-Mart, being one of biggest retailers in the world is a company of interest to study. It affects several people either directly or indirectly through its services. The operation issues facing the company not only affect the people involved directly, but it also affects the entire world in general. For example, the issue of sex discrimination calls for an alarm. The problem unions solved where Wal-Mart is trying to reduce the numbers of full-time employees to facilitate the workers in joining unions. Wal-Mart has solved the problem of domineering in the management field across international branches company by initiating decentralized management(Wal-Mart Stores, Inc.). Authority from headquarter and International operation have allowed individual country leaders to have the freedom to manage the business in operations and merchandising.

Works cited

Bianco, A., Zellner, W. “Is Wal-Mart Too Powerful?” Business Week, 38 (52), (2003). pp100.

Rock, J. “Can Wal-Mart Succeed in Foreign Soil?” Weekly Corporate Growth Report, 2001, pp115-37.

Wal-Mart Stores, Inc. Retrieved April 12, 2004 from http://hoovers.com