Wal-Mart International Division
The International Division at Wal-Mart International Business: Strategy & Structure October 10th, 2012
Introduction I would like to begin stating the reason why I decided to choose this case and, above all, this topic. Since the beginning of my academic career field I’ve always found more interesting the “human” side of business sciences, especially those concerning the behavior of organizations in the environment in which they operate and consequentially of the people that materially make them work. This because organizations are “living structures” created by men in order to reduce the uncertainty typical of every “open system” like the real world, as opposed to what scholars call “closed system” to indicate an environment where all the variables are controllable or at least predictable (Thompson, 1967). So the reason that led this choice was not that the case itself (even if Wal-Mart still represents one of the most successful firms in the world) but the more general organizational change behind it and the question common to probably every firm: why do organizations change and what is the best solution possible? Wal-Mart Despite being one of the biggest multinational retailer corporation in the world for revenues (446.950 billion $ in 2012) and employees (2.2 million as of 2012), WalMart remains a family owned business since its foundation in 1962 by Sam Walton, and even after his death members of the family keep on having key places inside the company: one bright example is Robson Walton, eldest son of Sam and Chairman of the company at the present date since 1992. The success of the firm is mainly due to an aggressive cost leadership strategy (Porter, 1980) that ensured the company with a huge competitive advantage, but that has not been completely free from critics: low specialized labor force and the exploitation of the “arbitrage” offered by countries such as China are a few examples. The company was even accused of child labor exploitation. Being
Introduction I would like to begin stating the reason why I decided to choose this case and, above all, this topic. Since the beginning of my academic career field I’ve always found more interesting the “human” side of business sciences, especially those concerning the behavior of organizations in the environment in which they operate and consequentially of the people that materially make them work. This because organizations are “living structures” created by men in order to reduce the uncertainty typical of every “open system” like the real world, as opposed to what scholars call “closed system” to indicate an environment where all the variables are controllable or at least predictable (Thompson, 1967). So the reason that led this choice was not that the case itself (even if Wal-Mart still represents one of the most successful firms in the world) but the more general organizational change behind it and the question common to probably every firm: why do organizations change and what is the best solution possible? Wal-Mart Despite being one of the biggest multinational retailer corporation in the world for revenues (446.950 billion $ in 2012) and employees (2.2 million as of 2012), WalMart remains a family owned business since its foundation in 1962 by Sam Walton, and even after his death members of the family keep on having key places inside the company: one bright example is Robson Walton, eldest son of Sam and Chairman of the company at the present date since 1992. The success of the firm is mainly due to an aggressive cost leadership strategy (Porter, 1980) that ensured the company with a huge competitive advantage, but that has not been completely free from critics: low specialized labor force and the exploitation of the “arbitrage” offered by countries such as China are a few examples. The company was even accused of child labor exploitation. Being