Wal-Mart has built their success in utilizing the Cost Leadership Strategy. This operating strategy has been proven to be successful for Wal-Mart because the Wal-Mart customer feels that they are getting their money's worth for the product they purchased. Wal-Mart has built their business around three simple beliefs and values “(1) Respect for the individual (2) Service to our Customers (3) striving for excellence”. To accomplish this, the Human Resource department is vital to Wal-Mart's success because of its internal and external customers that affect them directly and indirectly.
Human Resource Management has a lot to contribute towards making this a successful endeavor by implementing such functions as staffing, planning and organizing, and leading and controlling. The staffing functions includes recruiting and hiring of personnel, training and development of personnel, setting standards and compensation of personnel, and performance evaluation. The planning and organizing function includes establishing goals and standards and methods of communication (horizontal or vertical) also developing rules and procedures. The leading and controlling functions includes maintaining morale and motivating employees and setting standards such as quality and sales quotas. Because of Wal-Mart's use of cost leadership strategy, they have become extremely efficient at providing low cost quality merchandise to the consumer, but in doing so they have become extremely automated in their warehouse and stores, thus requiring less knowledgeable employees. This results in Wal-Mart investing less in training their employees and hiring minimum wage employees, who are likely to have a high turnover rate. Seventy percent of Wal-mart's employees leave in the first year of employment and full time employees work less than forty hours a week.
One of the strategies that I would recommend for Wal-Mart that will work with the company strategy would be the loyal solider HR strategy. This strategy would enable Wal-Mart to keep their key assets, the employees for the long term, thus increasing their loyalty to the organization and reducing employee turnover. This strategy would also providing more employees based training classes to have more skilled and knowledgeable employees. Additionally, since this is a service based industry having employees that the customer recognizes when they frequent the establishment makes for good customer service and an increase in loyalty.
Globalization
Globalization refers to when a company expands to conduct business /trade outside of their country borders. Globalization continues to provide new opportunities and markets to companies and Wal-Mart has continued to be one of the most prominent American companies in the forefront of overseas expansion. Wal-mart currently operates in 15 international markets. Wal-Mart will be extending their operations to Guyana, the third smallest country on the Continent of South America. Guyana is an English speaking country and has one of the most competitive wage rates in South America, and its labor force is well educated with a literacy rate of 96.5 percent. Not only are the people receptive to foreign businesses, the government provides several business incentives, such as a flat business tax rate, and waivers of customs duties to foreign ...
