Organizational Change
The two companies that have undergone similar, and fairly substantial, changes in recent years are Wal-Mart and General Motors (GM). Both are established publicly traded companies that are typically considered blue chip stocks. However, both have made the major decision in recent years to undergo corporate restructuring.
In 2009, an organizational change was announced by Wal-Mart. It was the restructuring of Wal-Mart’s global sourcing team to leverage the scale of its global merchandising operations. The purpose was to reduce costs and improve quality within its supply operations. At the same time it also announced the formation of a global dot com organization. Wal-Mart’s US operations were also reorganized. The three divisions (Logistics, Real Estate, and Store Operations) were united and reorganized into geographic divisions: Wal-Mart West, Wal-Mart South, and Wal-Mart North. According to Wal-Mart, this transformation was brought about in order to help unlock opportunities for customers, associates, and shareholders. Since the organizational change, Wal-Mart has performed extremely well. Its operating income has increased from $22.7 billion in 2009 to $26.5 billion in 2012. Its net income has also increased from $13.38 billion to $15.7 billion during the same time period.
In 2009, General Motors received a “bailout” from the United States government because it promised that there would be a substantial change within the company. The organizational changes that General Motors brought about were corporate downsizing. There was drastic restructuring within General Motors so that it became less bureaucratic. In fact, several layers of management were removed. These decisions saved money and improved the speed of decision making. Further, General Motors’ culture was changed to one of building cars that directly satisfied the needs of customers. Already, there have been positive effects within the company. It had incurred a net loss of $30.9 billion in 2008.
In 2009, an organizational change was announced by Wal-Mart. It was the restructuring of Wal-Mart’s global sourcing team to leverage the scale of its global merchandising operations. The purpose was to reduce costs and improve quality within its supply operations. At the same time it also announced the formation of a global dot com organization. Wal-Mart’s US operations were also reorganized. The three divisions (Logistics, Real Estate, and Store Operations) were united and reorganized into geographic divisions: Wal-Mart West, Wal-Mart South, and Wal-Mart North. According to Wal-Mart, this transformation was brought about in order to help unlock opportunities for customers, associates, and shareholders. Since the organizational change, Wal-Mart has performed extremely well. Its operating income has increased from $22.7 billion in 2009 to $26.5 billion in 2012. Its net income has also increased from $13.38 billion to $15.7 billion during the same time period.
In 2009, General Motors received a “bailout” from the United States government because it promised that there would be a substantial change within the company. The organizational changes that General Motors brought about were corporate downsizing. There was drastic restructuring within General Motors so that it became less bureaucratic. In fact, several layers of management were removed. These decisions saved money and improved the speed of decision making. Further, General Motors’ culture was changed to one of building cars that directly satisfied the needs of customers. Already, there have been positive effects within the company. It had incurred a net loss of $30.9 billion in 2008.
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