Walmart is the giant in grocery retailing, with over 10,500 stores and clubs, using 46 different names and currently running in 24 countries and with an associate employee base of 2.3 million in the world, making it the largest private employer in the world. In 2020 Fortune Global 500 listed Walmart’s revenue of $548.743 as the company with the highest revenue in the world. Walmart’s first store operations were in 1962. With over half a century in business operation, a spotlight on its organizational structure is not an over-emphasis in determining its long-term success. To understand Walmart’s organizational structure, let us define an organizational structure below;
What is an Organization Structure?
An organizational structure is a network that depicts how the relations in people, processes, and functions are coordinated to achieve the goals and objectives of an organization.
- It is a framework that gives clarity to the ways;
- communications are received and comprehended.
- Responsibilities are assigned and delegated.
- Positions of authorities are determined.
- The goal of an organization’s structure is to achieve its objectives and avoid disorientations of its business visions.
An efficient organizational structure is designed to enable an organization to meet its commitments to itself, investors and growth.
Forms of Organizational Structure
An organization’s structure takes two ways; Centralized or decentralized. In some cases, it can be a mix of both.
Centralized organizational structure
This structure is a hierarchy in form and functions. It tends to centralize all decisions about business process, growth, strategy, directions, goals, budget, talent hunt, and any other key decision to an executive or key leadership position. A unified organizational structure benefits from procedures and policy uniformities. It fosters consistency in tasks and processes, thereby improving quality control. Adopting this structure also has its downside. Its major disadvantage is that processes and operations may be delayed because of bureaucratic processes.
Decentralized structure
This structure spreads the decision-making power to multiple teams. The benefits of a decentralized structure are that it has a framework that fosters a fast decision-making process.
Hybrid organizational structure
This structure combines both centralized and decentralized structures.
Types of Organizational Structure
After determining the form of its structure, an organization can determine the type of structure it wants to adopt depending on its size, strategy, technology, environment, and life cycle of the organization. There are different types of organizational structures; this article will focus on just three major types that are largely adopted in big organizations. Listed below are the popular organizational structure adopted;
Hierarchy:
This structure clearly shows the chain of authority, which groups and assigns staff based on their roles to the authority in that position, usually the manager. It is not dependent on the type of product or services they render to the organization. They are usually assigned to a supervisor because this structure has multi-level chains of authority. There is a clear-cut authority in place, and everyone in the organization is aware of the central reporting authority.
Functional structure:
This structure assigns staff according to their specialty or functions to their manager, who in turn reports to their supervisor, for example, the marketing department.
Matrix Structure:
This structure is a fusion of a hierarchy and functional organizational structure. It can be a mix of more than one organization structure depending on the size, goals, and objectives of the organization. In this case, employees are classified based on their matching skills to report to more than one supervisor. For example, employees with similar skill sets may work with more than one supervisor, a project manager, and a company or department manager.
Walmart’s Organization Structure
The growth and success of Walmart as a retail giant show the functionality of its organizational structure. Walmart’s working structure has been pivotal to its growth as it has put in place a framework that supports innovations, collaboration, Uniformity, conflict resolutions, marketing, strategy formulation, talent development, and management.
The size of Walmart was one of the major determinants of its structure. With over half a decade in operation with over 10,500 stores and clubs running in 24 countries, Walmart’s organizational structure is a hybrid hierarchical-functional.
In simpler terms, it is a matrix or a mix of hierarchy and functional structure. This means that its operation and decision-making power is unified and centered on a management team at the top that decides product and services pricing and shipment as well as overall management of operations. Walmart is characterized by a hierarchical organizational structure. The chief executive officer is not directly reporting or answerable to anyone. He is at the top level. At this level, information is passed from the level to the middle management and then passed on to employees in different departments.
- In operating a Functional organizational structure, Walmart runs different departments hence the need for a functional-based organizational structure. To ensure efficient and smooth operations of different departments, managers are assigned to each department, who in turn report to the regional managers, who in turn also report to executives.
- Implementation of this organizational structure is important to increasing its sales and impact on an international level. Walmart’s choice of structure is largely based on the geographical/location of the company, its customer, and the founder’s value.
Conclusion
Walmart is an international brand, and it aims to ensure that all its stores have the same standard of services and offering worldwide. Sam Walton’s goal is to ensure customers are getting products at an affordable amount consistently.Walmart’s customer base is focused on convenience, availability, and affordability. Walmart’s goal is to ensure it keeps its promise.In conclusion, Walmart’s organizational structure is based on what works for it according to its geographical presence, customer base, and founder value.
FAQs
How to know if an organization is adopting a Centralized or decentralized structure?
In determining what type of organizational structure Walmart has, it is important to know;
If all decisions about budget, process, quality control, and talent hunt are carried out solely at the management level or; If some of the key decisions have been assigned or delegated to the lower level of the structure. It can also be a mix of the same.
