1. INTRODUCTION
1.1 REPORT INTRODUCTION
The report is to show the analysis and the insight of Walmart organization and the problem that they faced in the past 12 months. This report will emphasize on Walmart’s latest problem and inspects its leadership skills that can deal with the problem. See the success and effectiveness of the leadership skill in Walmarts, many theories and frameworks are being used to get the beneficial result for the report. This report shows how leadership at Walmart be improved and solved the problem.
1.2 AIMS AND OBJECTIVES OF THE REPORT:
1. To understand the theories that are concerned about the case study.
2. To examine if the leadership in Walmart are good enough or if there is something that may be improved or to do in their leadership theory.
3. To apply the theories to the organization while they are dealing with the issue.
1.3 LEADERSHIP AND CONTEMPORARY ISSUES
“The leader has no involved with seniority or the position in the hierarchy of a company” – Kevin Kruse (Forbes, April 9, 2013). The leader is not just a name or word that to describe one person to be; it indicates their action and ability toward the positioning in the company. When people are thinking about leadership, they represent leader as the characteristic, but actually, the leader position must be able to inspire, motivate, creative, taking the risk and solve the problems in an internal and external with the company and intelligent to rule the company.
The excellent leader or CEO must know how to motivate and influence people in the proper direction for the best results.
Every people have their thought and an emotional, if the leader can build the trust with the employee, Is the ways to help to rule the company easier because when people trust they always listen and following the same direction as the leader. The employees are an essential part that runs the company and makes the company complete. The leader must understand the pressure of the employees and make everyone in the organization feel comfortable to work in the company. Usually, managers are essential for making sure what the business needs to do to achieve, and setting out clear objectives in order to reach those goals. It can be anything from building profit margins, to deal with consumer awareness(Andrew Arnold, July 18, 2017). Leaders are the person who rules the company and made the company go forward. Every Leader should allow employees to work on their own and adequately lead them. The employee will help bring more vision to the organization. The leader has to know the right time to build impression to all employees.
The contemporary issue considered Walmart’s stumbles with online sales because Walmart is lack of managing products fulfillment. The decrease of the online growth happens because the company ran out of some items in online fulfillment centers – CEO Doug McMillon (Money.CNN, February 20, 2018). Walmart is announced to reduce the profit margins from the standard more than expected by intending to compete with the Amazon company (Chris Isidore, February 20, 2018).
1.4 HISTORIES AND BACKGROUND OF WALMART
Walmart is an international retailer that roots based in the United States of America. Walmart is a store for mostly middle to lower class people. Now, Walmart is nearly the greatest public corporation in the world according to Fortune Global 500. Walmart has more than 2.5 million employees. Headquarter of the Walmart is in Bentonville, Arkansas. Sam Walton formed the company in 1962 and incorporated on October 31, 1069. The company opens a new company every annual year, and in the 1990s, Walmart is the nation’s No.1 retailer. Walmart defined as a convenience and one-stop service shopping with the lower price that everyone can afford. After the achievement in 2015, The Company employs 2.3 million around the world and give more than two million customers per week and opens more than 11,000 stores in 27 countries. In 2017, Walmart’s launched online store with free two-day shipping on more than 2 million items, no membership required. To 2018, The Company modifications the name from Wal-Mart Stores, Inc. to Walmart Inc. “Even the corporate name has changed, what won’t change is that Walmart will be there for customers—saving them money and time and helping make every day just a little bit easier” – Walmart’s CEO (Doug Mcmillon, December 6, 2017).
1.5 CASE STUDY – CONTEMPORARY ISSUE OF WALMART
Walmart is the nation’s largest retailer in the world at present and has been inventing enormous gains in online purchases, but these still shows only a section of its $500 billion in daily income. Walmart knew from all over the world by its prices and how the product is delivered to the customers, although the main point of Walmart is selling to a middle and lower range of people with the lower salary. Walmart still creates another way of shopping by making it online; the store will make a lot more advantages from the Internet. Recently the contemporary issue in 2018, The online growth start to decrease more than the headquarter anticipated, but the online sales increase 23% compared to a year ago, but it lower than the 50% growth. Some of the slowdowns in growth were because the company stock had not complete and ran out of the product, said CEO Doug McMillon. The company is announced the smaller profit margins, as it needs to decrease some prices more than expected in order to have a lower or Equivalent prices to Amazon, Walmart had also increased its own transportation cost due to the pricier fuel and the expense of the free two-day shipping campaign that just announced in the online store. The result in the income process drop around 42 percent for the fourth quarter, this includes the holiday, which many people come shopping. The stores in the United States were up to 2.6 percent in the quarter which this is larger than what the company had forecasted a while ago. The news had spread that Walmart has low margin then it expected to earn the trade. Walmart gets only 7 percent lower in the first quarter of the trading.
This case shows that leadership in Walmart can be improving in order to be more effective. Many issues that are happening in 2018 can be improving. The leadership in Walmart can lead the employee to an upper class. The next section will be about leadership skills that Walmart has published in the organization, this organization has some leadership skill that they can improve and show to the employees (Money CNN, 2018).
2.THEORIES
2.1 TRANSFORMATIONAL LEADERSHIP
Transformational leadership theory is the research correlating to positive performance outcomes including individual, group, and organizational level variables (David Burkus, March 18, 2010). This kind of leadership will leads the employee by focusing on motivation and inspiration the employee by using the trust to motivate the employee. The Transformational leadership characteristics must be a positive attitude, ethical and have a positive mindset.
Idealized influence Walmart CEO performs as a role model on their followers seek to emulate. Everybody in the team respects the leader. The leader in the organization will focus on the needs of their team and individuals first and work effectively. Most of the Transformational leader put their mind on the members of the team and influence each other to reach the goal.
- Intellectual Stimulation – They challenge themselves in order to bread their usual ways of working and always encourages everybody in the team to be more creative rather a being in the same point of working, solving the problem by their own and help is from the leader. They support new ideas from their supporters and never blame the mistakes on one of the members.
- Inspirational Motivation – The aim of this leadership is not to punish or tell one of the members to do something, The leader inspires them to challenge themselves by providing the vision and passion that the Transformational Leaders have for them, this vision is the same as the leader poses. This leads to the same finish line or a goal of the organization.
- Individualized Consideration – The character of the leader in this subject is to perform as a mentor or a trainer. They also open-minded to the follower, giving the flow of communication by listening to one another so they can give an advice or suggestion to bring up their followers.
The Transformational leadership is a leadership style that inspires the positive transformations to the follower. Transformational leaders are usually energetic, enthusiastic, and passionate. Not only are the leaders concerned also involved in the process; they also focused on helping every member of the group to succeed as well (Kendra cherry, 2018).
2.2 CHARISMATIC LEADERSHIP THEORIES
Charismatic Leaders usually guide by using charm and self-confidence. Their personality attracts attention and gains admirers (Biz Fluent, 2017). Charismatic leaders often use other people as representatives to influence the followers. Most followers will appreciate their leader and listen to their leader very effectively. The charismatic leader has good intention and has much power to lead people to the direction they want.
Figure 2: Charismatic Leadership Model
This form of leadership identified Sam Walton. Lussier and Achua (2009, pp 337) tell the abilities of a charismatic leader to:
- Garner strong personal attraction from followers.
- Articulate a compelling and evocation vision.
- Enhance followers’ self-conception.
He had all of those qualities, and all these qualities using to establish and expand Walmart. This qualities always helps Walmart in building good followers and every employee will be persuaded to build up themselves in a good way. The following quality that every leader should have in order to lead the organization forward, Walmart is a tremendous organization. Leading this large company is not easy at all if they miss one of those qualities that require.
2.3 TRANSACTIONAL LEADERSHIP THEORY
This leadership style known as managerial leadership, Focuses on the role of supervision, organization, and group performance(very well mind, 2017). This leadership style usually implements and focus on the tasks that the follower do and gives rewards on the right side where they achieve to go or any punishments for the follower who done wrong to motivate the followers.
The expectation of Transactional Leadership:
- Every people usually perform to the max when the leader has an apparent command.
- The Rewards and Punishments from the organization motivate every worker.
- The primary goal of every follower is by obeying the commands and instructions of the leader.
- Everything needed to be carefully seen to ensure that their best quality meets the expectations.
Figure 3: Transactional Leadership model
3. ORGANIZATIONAL ANALYSIS
3.1 TRANSFORMATIONAL LEADERSHIP APPLIED IN WALMART
Walmart transformational leadership style that leads the entire organization by the current CEO Doug McMillon. He uses transformational leadership to leads in the entire organization while the previous leader has used this leadership style. Walmart is such a massive company and comprises 270 million customers annually and more than 11,700 stores fewer than 65 banners in 28 countries and e-commerce websites in 11 countries. (Walmart, 2014)CEO Doug McMillon has paid the enormous amount of attention to the entire problem that happens in the organization, which the problem has come frequently. He pays attention to every detail that goes to make Walmart success in the future.
Doug has many of vision that is leading the company to a prosperous future; he embodies in the transformational leadership to communicate with the follower or the employees in the company. To understand the follower needs and how to give practical advice to the employees in the organization. Doug McMillon always knows to deal with the consequences that were going to be the big problem in the organization. Giving goals to the employees and lead them in the right way where they want to go, support every one another to walk in the same way to the same goals. He has much passion that will give the follower the power to walk forward the company.
From the past, Doug McMillon went on to serve in successful senior leadership roles in all of Walmart’s business segments. He remains a merchant at heart and understands where customers around the world are heading next. (Walmarts, 2014). As the information says Doug McMillon has a very clear-minded vision, he understands all the process and where the customer stands in. He can predict how to deal with the customer wants and needs. He supports all customers and employees over the organization and in e-commerce.
3.2 CHARISMATIC THEORIES APPLIED IN WALMART
Once, The problem came in the organization, Doug has to change his leading style. Everyone understands the point of doing this; Doug knows every problem that was going to happen in the company. The slowdown in growth happens because the company ran out of stock for some items at its online fulfillment centers, said by CEO Doug McMillon. He teaches the employee about how to deal with a higher volume and learn how to deal with a higher level of ordering from the customers and what to do when it is in the peak period. CEO Doug McMillon tries always to bring something new to Walmart by motivating the entire employee with many exciting things. In this situation, he tries to bring back Walmart’s online market to compete with the leading competitor such as Amazon. Walmart is killing Target and making Amazon sweat, Said Doug McMillon.
Previously CEO, Doug McMillon said “having been here a long time, I think I had the feeling that I knew what responsibility felt like” (Fortune, 2015). Doug McMillon prevents the entire problem that the company is going to faces in the future by also leading himself to a very high standard of responsibilities. He arranges every set of mind to the employee in order to revise the goal in the organization; everyone in the company needs to have the same goals and work effectively for the goals.
3.3 TRANSACTIONAL LEADERSHIP STYLE APPLIED IN WALMART
Walmart performs transactional leadership in many cases by running in day-by-day business at the stores. Doug McMillon CEO of Walmart says that while performs this kind of leadership will also affect the company’s manner. The case study shows that when applying transactional leadership to the Walmart store will serve a substantial motivating factor, and it is a useful example of how to manage the employee in the store. Walmart can handle much international operation by promoting this leadership style. Decision-making capabilities of organizational leadership are significant in organizational success(Accessed, March 2013). Many of the decision-making is also coming up from the CEO, which he has done it effectively.
Walmart has a right balance of standards and freedom. They control the standards for the freedom of others. Those entire store managers have their own decision to assign the product stocking. When there was any problem in the store by the self-assigns stock of the store manager, there was some loss of the autonomy of that person. Still, the top manager of the branches needs to quickly realize the adverse problem that is going on in the store and make more autonomy to the store managers in order to manage themselves. The company also gives knowledge to every employee in order to develop the supply chain of suppliers.
Same as last COO Bill Simon, he was built-up as a head of the division known as “a competent executive with strong ideas of his own”- Walmart (Walmart, 2011). He was the award for his capabilities in his strong ideas, rewarded with promotions, and similar to every people in the company. Once they have done a satisfying work for the organization, they will receive a reward and a promotion for what they have done.
4. CONCLUSION
Walmart’s itself uses excellent leadership skills in the organization. The let everyone join the company as his or her employee. The current CEO works very hard in order to collect information about the company and make an excellent Transformational Leadership. Doug McMillon strives in many aspects to make a warm atmosphere; the employee will have a perfect time working with the CEO that is leading in persuasive ways. He also creates a perfect environment for everyone working in the company. They can always ask for an active consultant. Also, It is a very creative style of leading Walmart to its own goals. The report has shown the contemporary issue of Walmart in the last few months; Walmart has faced many issues that might affect the e-commerce selling. Although the company looks very big and never going to fall by anything, there is still some problem. This issue caused by not having enough flows of information in every part of the supply chain when the order is overwhelming there are not enough products in the stocks for delivering to the customers. CEO of Walmart can solve this by increasing flows in communication through every part of the manager line, Walmart can also create a workshop for every employee to get involved in it in order to improve the effectiveness in every part of the organization. This way could be beneficial because the CEO already uses good leadership skills.
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