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Running head: PROFITS OVER CUSTOMERS Walmart’s Customer’s First Policy: The Case of Profits over Customer’s Patrick Carsten Troy University MGT-6681 Dr. Mankelwicz 1 PROFITS OVER CUSTOMERS 2 Executive Summary Walmart’s organizational change is the reason for the following proposal. This report has several goals, such as internal and external factors of Walmart, customer perceptions, employee interaction, benefits and rewards, promotion diversity, training, and overall culture. Current problems and future issues are the primary concern of this consulting firm. As being a permanent fixture in local communities for nearly 60 years, Walmart has established a reputation of putting customers first and providing low prices. With Walmart’s reputation shifting more towards profits, the consulting team relishes the opportunity to work with the Executive Board to help reconnect Walmart with its customer base, rev training for management and employees, build communication avenues between managers and associates, and build teamwork. The following proposal will provide recommendations and instructions to assist in the flow of change information, such as returning to the founding philosophy of customers first, training initiatives, teamwork, diversified promotions, understanding cultures, and empowering employees. To help provide future success for Walmart, this proposal will study and take advantage of the numerous opportunities in the global market place. To achieve this endeavor, the six-box model, internal and external analysis, and the readiness for change assessment. Other than issues with customers and employees, tables, and models display the need for change triggers, opportunities, and threats, Walmart’s current condition, and the functions of strengths and weaknesses within Walmart. Long-term and short-term fixes will be provided by the consulting firm to reestablish Walmart’s reputation among its customers, employees, international and local communities. Communication, Evaluation, and training plans will help reinforce values and build teamwork. The consulting team feels confident that the following proposal to Walmart will furnish great results. PROFITS OVER CUSTOMERS 3 Walmart’s Customer’s First Policy: The Case of Profits over Customer’s Introduction Sam Walton founded Walmart in Rogers, Arkansas, in 1962. Walton’s reason for establishing Walmart was to better the customer’s lives by providing them with quality merchandise at low prices. Walmart is the largest retailer with 11,500 stores in 27 countries, with over 265 million customers. The corporation is one of the broadest equal opportunity employers with over 2.2 million employees worldwide. From 1962 through 1992, Walmart has only concentrated on expanding in the United States, but as of 1993, Walmart established its international division, which was developed to broaden the Walmart brand internationally. The company donates millions of dollars to relief efforts and has bought stock in the Red Cross to help out whenever there is a natural disaster. Over the years, Walmart has tried to keep up with changes such as new technological cash registers, free Wi-Fi internet, and organic foods. Walmart was founded with customers first in mind, but over the years, profits have taken center stage. When a new associate starts, they receive minimum wage, which was $8.25 per hour for night workers back in 2013, but as of 2019, wages have moved up to $10.00 per hour. Wage increase sounds excellent, but when one looks at Walmart’s revenue for 2020, which was $564 billion, one may think wages may need to be higher. Once an associate is hired and goes through induction, he or she is told that Walmart does not have a union, and if anyone approaches them to report it to management. Teamwork is emphasized during training sessions, but once members go to the floor, it is each person for themselves. Part-time workers receive no benefits such as healthcare or vacation time until they have been with the company for a year. In PROFITS OVER CUSTOMERS 4 the past, Walmart has been sued for discrimination against women. Employees have no power to make any decisions or even consulted on changes within the store. Need for Change Awareness Triggers • Management puts profits and sales over employees needs • Low wages • Unions are discouraged • Training consists of computer-based training (CBT) • Lack of teamwork among employees • Lack of benefits or rewards for part-time employees • Diversity in promotions • Lack of international culture understanding • Lack of employee empowerment The Six-Box Diagnostic Model The awareness triggers listed above have prompted the Six-Box organizational model to be executed. This diagnostic model will provide corrective actions to the inefficiency of management and training to the lack of concern for employee needs. According to Palmer, Dunford, and Buchanan (2017), this diagnostic change model has two applications, such as categories to simplify organization problem factors and address implication actions. Deficiencies and framework diagnosis can be identified by utilizing the list below (See Table 1 for the six-box organizational model). Table 1 Six-Box Organizational Model Elements Current State PROFITS OVER CUSTOMERS 5 Purposes To save customers money through low pricing to live a better life. The live better portion is not proven through any data, but the low wages that employees receive prove to be a challenge for improving employee’s lives. Structure The organization has a two feature structure, which is hierarchy and functionbased. Under hierarchy, there is a command and authority structure where employees have supervisors and managers over them passing down mandates and directives. The function-based side is made up of different departments or functions such as HR, marketing, and information technology. Most managers do not lead by exle and, at times, do not even know the names of associates under their employ. Rewards As of 2019, the organization introduced its paid time off program for associates who are considered dependable along with a 25 percent increase in quarterly bonuses. Before 2019, the employee’s only reward was being named employee of the month. Bonuses for associates are not even close to being equal to what low-level managers receive, such as hundreds of dollars versus thousands. Helpful Coordination among employees is word of mouth, the local intranet, or mechanisms information boards. Training is conducted via computer-based training modules and one day hands-on. Relationships The employees handle conflicts among employees through face-to-face arguing. Complaints can be brought to management by nothing ever appears to change or get resolved. Leadership The store manager is the one responsible for managing the boxes, but he appears more interested in increasing profits for the store while assistant managers are left holding the bag. Although the boxes are part of the assistant manager’s duties, the store manager appears disconnected from his employees. Note. Adapted from Weisbord (1976). External Analysis An organization is affected by numerous change factors. External factors are more commonly referred to as economic factors that cannot be influenced or controlled by an organization (Horatiu, 2013). The list below outlines external impacting change factors outside of Walmart. (See Table 2, Walmart external pressure factors). Table 2 Walmart External Pressure Factors Environmental Pressures Fashion Opportunity Becoming a one-stop-shop for Threat Opening neighborhood stores PROFITS OVER CUSTOMERS 6 all household needs Mandate Decisions are to be guided by values and customers come first Geopolitical Making itself aware of all political issues within areas of operation Market decline Seeking international market potentials for growth Hypercompetition Building stores international to become the top retailer worldwide Note. Adapted from Palmer, Dunford, #038; Buchanan (2017). to compete with Dollar General and online retailers Most associates and customers feel profits come first, due to low wages for employees Late income tax returns for customers can affect sales projections and Unions Unable to understand foreign cultures and customs Loss of diversity in promotions and benefits for workers Fashion Since more convenient stores have been popping up within local communities, customer shopping has declined. The one foremost opportunity is that Walmart prides itself on being a one-stop-shop offering customers everything from food to automotive services, which entices customers to drive a little further for services. The threat is the local stores such as Dollar General offer customers the same items but on a smaller scale prompting Walmart to open neighborhood stores, which failed due to lack of customers. Online retailers also cut into Walmart’s automotive, cosmetic, homeware, and clothing revenue. Mandate Walmart was founded with the notion of providing customers with quality items at low prices, customers come first, and decisions would be guided by values. The shift from customers first to profits and shareholders has left the customer and associates feeling left behind. Although, Walmart increased its hourly wage to $10.00 an hour employee’s quality of life has not benefited. Geopolitical PROFITS OVER CUSTOMERS 7 Walmart’s marketing executives and board do their homework when it comes to the location of a store, making sure stores are centrally located by highways with le parking for customers. Management makes itself abreast of any local or state political issues or problems. Unfortunately, governmental shortcomings, such as late income tax refunds, can affect customer spending, which is reflected in Walmart’s year revenue reports. Walmart opposes its organization, becoming unionized and discourages its employees from talking to any union reps. Market Decline Walmart looks for potential where ever it can find it, and one such is the international arena, which Walmart has seen great results in most countries. Walmart lacks an understanding of foreign cultures and customs. The organization goes into a foreign country, believing it can employ the cultures from the United States but soon realizes it cannot such as the case in China, where Walmart failed and had to leave. Hypercompetition Walmart competes with a multitude of retail chains within the US, so to expand its brand, the organization branches out to the international community, hoping to become the top retailer worldwide. Walmart has had its losses in the international realm, but it has also come out on top. There are a few areas the company falls short such as benefits for part-time workers (healthcare and vacation time) and diversified promotions for women and minorities. Internal Analysis The strengths and weaknesses within a corporation can help an organization to identify pressures and functions that are positive and negative within an organization. A company’s operations are affected by internal factors such as innovation, so an organization needs to adapt and improve overall internal structure using its opportunities and threats (Shatilo, 2019). Internal PROFITS OVER CUSTOMERS 8 changes within an organization provide the company with the control tools needed to improve lives and relationships among the whole team. Table 3 Walmart Internal Pressure Factors Organizational Pressures Growth Strength A. Local communities worldwide support B. Solid future growth plan Weakness A. Loss of job satisfaction for associates B. Profits replacing customer satisfaction Integration and collaboration A. Flexible working hour for A. Conflicts and lack of students and disabled teamwork between associates employees and management B. Organizational values B. Senior associates believe shared by all associates they are in-charge of new employees Identity A. Worldwide recognized A. Customers seeing a decline organizational brand label in associate and customer B. Company is known for low interaction pricing B. Un-unionized New broom A. With new leadership brings A. Lack of diversified new ideas and change promotions B. Creativity to increase profit B. Lack of input from margins and sales employees during the decision-making process Power and politics A. Strenuous safety policies in A. Upper Management place to protect employees and appears to unapproachable to customers associates B. Some managers stepping in B. Mangers are disengaged to help associates on the floor with employees benefit and with stocking and reward needs rearrangement Note. Adapted from Palmer, Dunford, #038; Buchanan (2017). Growth Due to the support of the local communities, Walmart has been very successful and grown to one of the top retailers in the world, with over 2.2 million employees. The executive board shows excellent promise for increasing and expanding Walmart’s future endeavors through PROFITS OVER CUSTOMERS 9 the use of technology. Walmart has a few areas that have the potential to slow growth, and one such area is employee job satisfaction because workers feel management is more concerned about making profits for shareholders over employee’s needs. Integration and Collaboration Flexibility is one of the first things mentioned to new employees, especially if the worker is a current student. The majority of the associates employed by Walmart share the founder’s values of Walmart, and that is, “Customers come first.” Even with shared values and norms, employees still have conflicts such as not working as a team among each other and at times with current management. Most conflicts come from associates who have worked for the organization longer feel they have the right to boss junior associates around or treat them as inferior. Identity The organization’s symbol and brand are recognized worldwide and have a reputation as a place to buy quality items at low prices. Customer interactions from employees have been on a decline due to associates seeing Walmart as just a job and not a family. From day one, when one is hired, new employees are told that the organization does not have a union and does not want one. If approached by a union representative, employees are encouraged to report it to management. New Broom When a new leader or Chief Executive Officer (CEO) is hired, he or she comes with new ideas and challenges for change. A few CEOs have been promoted from within the organization, which have started at the bottom and worked his or her way up to the top management, which can provide him or her inside perspective on sales and profit areas. One PROFITS OVER CUSTOMERS 10 area of contention is the lack of diversity in promotions for women and minorities. When it comes to the decision-making process, employees are given a voice to provide input. Power and Politics The organization has strict safety policies in place to protect employees and customers; if violated, an employee can be terminated for cause. At times when the workforce is low, management will set in to help rearrange items and help with display construction and placement. Store managers give the appearance of being unapproachable due to the store manager’s lack of interaction with store workers. Once a new associate is hired and is part-time, vacation and healthcare benefits do not go into effect until after one year of employment. Managers are disengaged when it comes to employee rewards such as employee of the month, which is not equally distributed, or bonuses which part-time employees do not get until after one year of employment again. Table 4 Walmart Internal Function Factors Organizational functions Management Marketing Accounting/Finance Information systems Strength A. Most top management promoted from within the organization B. Most managers have local store experience A. Globally recognized brand name B. Global supply chain A. Record sales for the past 40 years B. Share earnings at a record high A. Using robots to fill and track online orders B. Use of intranet and bulletin Weakness A. Lack of people skills among individual managers B. Lack of diversified promotions A. Not conforming to international cultures B. Specialty sellers pose a competitive disadvantage A. Not using funds to provide proper training and support low wages B. Thin margins of profit A. Robotic online tracking and filling still in trials B. Corporate changes are only PROFITS OVER CUSTOMERS 11 boards to inform associates of changes Research and development A. Bring new products onto Walmart’s brand label B. Learn from competitors mistakes Note. Adapted from Palmer, Dunford, #038; Buchanan (2017). passed during meetings and then just post on bulletin board A. Shrinking bottom-line margins B. Business model can be copied easily Management Most top management promotions for the organization are from within the company. One reason for promotions from within is due to the expertise that comes with running a local store. Most new and younger store managers look good for Walmart’s image, but most of these managers do not even know their employees by name. In contrast, older managers take the time to interact or outrospection with subordinates. Unfortunately, the majority of the promotions to top-level executive positions are not diversified enough to be comprised of women or minorities, which is backed up by the 32 lawsuits from women claiming discrimination. Marketing The organization has a worldwide brand name and has been in business for close to six decades of providing low prices every day to customers. Walmart has global supply chain connections, which helps the organization move products throughout the world. With Walmart breaking into the international market and establishing stores in different countries, the lack of conforming to local cultures and customs can and will lead to store failures such as the store in China. Another area of contention for Walmart is online specialty retailers selling the same items and cutting into Walmart’s profit margin. Accounting/Finance Walmart Corporation has been showing record sales for over the past four decades, and share profits are at a record high. Since 1999 sales growth has been falling due to competitors, PROFITS OVER CUSTOMERS 12 which leaves not much funding for the training of employees. With more and more competitors getting into the online market, profit margins have been falling since 2001. Information System The organization has invested in robotics to fill and track online orders to free up associates to assist customers. Walmart uses its intranet, which is connected to all stores allowing top management to be able to correspond to each of its store managers directly. As far as the robots filling and tracking online products, this endeavor is still in its testing phase. Meetings are used to pass down vital information from top management but are only mentioned once and then posted on the bulletin board. Research and Development New products such as housewares and apparel are being brought in from R#038;D to be added to Walmart’s private signature brand label to increase profit margins. Social trends and new technology for supply chains are high on Walmart’s radar. Walmart also reviews product and procedure strategy failures from competitors to learn from their mistakes. Since the Walmart model can be easily copied and then repeated by competitors, the effect is shrinking bottom-line profit margins. Cultural Web Cultural Web is a tool commonly used to determine and spot issues within an organization, which can provide needed changes that should accrue in an organization. Walmart’s globalization failures accrued due to constraints within cultures and local institutions (Kaelberer, 2017). The below are the seven elements of diagnostics: The Paradigm PROFITS OVER CUSTOMERS 13 The four fundamental beliefs Walmart lives by are as follows: service to customers, respect for the individual, excellence achievement, and action with integrity. Providing quality service to customers is Walmart’s number one priority, along with increased profits. Per Walmart, its success is directly related to its customers and employees. As associates achieve success, the benefits are reaped by the organization. As far as integrity is concerned, Walmart believes in honesty, and decision-making should be impartial and fair. Rituals and Routines Treating each other and customers with respect is ingrained into each new employee during indoctrination. Walmart has a “10-foot rule” in place requiring associates to greet any customer that is within 10-feet of them and ask if they require any assistance. Walmart is one of the only all-in-one stores with multiple departments, which include automotive, grocery, electronics, hardware, clothing, and consumables. Stories As the founder of Walmart, Sam Walton believed in providing customers with quality merchandise at a low cost, which would enhance customer’s lives. Sam Walton believed that customers came first within any business strategy. As an equal opportunity employer, Walmart’s hiring philosophy is hiring those people who can do the job no matter the handicap or disability. Military veterans had a preference when it came to getting hired at Walmart. Symbols Walmart’s blue and yellow logo colors are well known within the United States, along with their smocks and tan pants. One of the most common symbols of Walmart is its slogan, which is “Save Money, Live Better.” One of the most common symbols that can be found at PROFITS OVER CUSTOMERS 14 Walmart is its front door greeters, which provide pleasantries and also function as security by checking carts as customers leave the store. Control Systems Even though Walmart is a publicly-traded company, the Walton family still holds a significant amount of stock in the company. Still, as of 2014, the family does not hold a controlling interest. Walton family members hold numerous executive-level positions within the organization. Stores are made-up of a multitude of different departments and divisions within each store that have their objectives and goals. However, managers are required to update inventory and submit reports daily, which provides a sense of responsibility and constant control among employees. Power Structures When one talks about power within an organization, employee empowerment comes to mind providing employees a say in the decision-making process, which links the employee’s failure and success with the company. Unfortunately, Walmart managers make all the decisions which are passed through the assistant managers to employees to carry out. One bad decision made by management is item placement reorganization or moving items to different shelves each month, which only confuses customers. Organizational Structure The organizational structure at Walmart is a hierarchical functional structure. The hierarchical structure is the command and authority side of the organization, which passes rules and instructions down to management and supervisors to disseminate to associates. The functional side of the Walmart structure has numerous employees who have different job functions such as information technology (IT), human resources (HR), and marketing. Walmart PROFITS OVER CUSTOMERS 15 can control, influence, and monitor its associates through mandates and policies from corporate, which are passed to management at the regional level then to each local store. Hofstede’s Model Power Distance Index Due to a hierarchy structure at Walmart, employees accept the unequal distribution of power. The position each employee holds determines the level of power he or she has within the store. Individualism versus Collectivism Walmart employs individualism and collectivism among its associates and management. The collective side or teamwork is encouraged most among associates meaning even if one works independently; the collective job efforts benefit the overall organization. Task assignments are assigned to each person individually, meaning each isle has only one person stocking shelves. Masculinity versus Femininity The two categories are displayed by the assignments assigned to each person to complete. Although each employee is required to lift the same amount of weight and perform the same duties, men are usually assigned to tasks that require heavier lifting. The areas in the store that require less lifting are assigned to women. Uncertainty Avoidance Index No one likes uncertainty in his or her life, so one method employed is avoidance. Walmart is no different such as management rearranging items on shelves every other month, which causes anxiety, stress, and conflicts among customers and employees. Long-Term Orientation versus Short-Term Normative Orientation PROFITS OVER CUSTOMERS 16 Both orientations are encompassed at Walmart, which believes in the tradition of customers first. However, it still believes for an organization to progress into the future; they need to change when change is needed. Walmart has made several changes with its stores by incorporating credit card readers for customers and call-in service for items to be bagged by employees and placed in customer’s cars for them. Indulgence versus Restraint Indulgence relates to people having fun in their lives, which can relate to Walmart employees having fun with one another and conversing, but Walmart requires employees to work and not stand around and talk. Walmart employs the use of restraint through its regulations that no phone calls or phone use during working hours. Organization’s Assessment for Readiness to Change The hiring of an outside consultant firm to audit and furnish recommendations for change shows that Walmart’s executive board is taking its shortcomings seriously and is willing to make the necessary changes within its organization. Walmart’s change assessment can be found in Appendix Table A1. Successful change is measured by an organization’s readiness to change, along with those involved, who are empowered and motivated to change (Austin, Chreim, #038; Grudniewicz, 2020). Walmart’s management shows that profits are its main concern over employee needs, which the organization recognizes that it needs to go back to its founder’s philosophy, such as “customer’s first.” Identification of strengths and weaknesses has been reported to Walmart’s executive board, along with threats and opportunities of providing more in-depth training for its employees. Due to low wages and unequal promotions for women and minorities have been recognized and marked as areas of change resistance. Employee empowerment can lead to team cohesiveness, better training, and new cultural understanding. PROFITS OVER CUSTOMERS 17 Recommendations The consulting firm hired by Walmart has formulated first-order and second-order recommendations to assist the organization in overcoming current issues and problems. The external and internal factor tables are the areas used to pinpoint issues requiring attention and change. For future success and growth, the organization is highly encouraged to implement the below recommendations and solutions immediately and without resistance. First-Order First, for this organization to be successful in future growth, it needs to reinstate its founder’s philosophy, which was putting customers first and providing quality merchandise at everyday low prices. Once values and norms have been established, management needs to outrospection with its employees to re-establish a family environment as the company was meant to be from its conception. Second, the lack of teamwork or conflicts among employees is an infection that can spread and corrupt new associates, which can lead to low job performance and must be remedied by implementing team building sessions each month. Third, even though funding supports computer-based training (CBT) to introduce new employees to the way the organization was founded and operates, on-the-job training needs to be a week-long with a senior associate and not one who just started working the prior week. Fourth, although there are promotions from within the organization to top-level executive positions, the lack of diversity in those promotions need to be addressed as the 32 lawsuits from women for discrimination have pointed out. Finally, the employee low wage scale needs to change with the times. However, the organization increased the minimum wage to $10.00 per hour; the cost of living in most areas is higher, so an increase to $15.00 per hour is suggested to offset the cost of living expenses to provide for a better quality of life for employees. PROFITS OVER CUSTOMERS 18 Second-Order First, the Executive Board needs to reexamine benefit plans for part-time employees; once a new associate is hired, he or she should not have to wait for a year to receive healthcare and vacation benefits, meaning once the three-month probationary period is completed benefits should be activated. Second, before Walmart engaging in placing a store in a foreign country, the international marketing division needs to research the customs and cultures of the prospective country before groundbreaking accrues. Third, there needs to be a means to empower employees, and such a way is to give them a voice in the decision-making process by asking for inputs on basic changes that affect employees. Finally, management needs to address the discouragement of a union present within the organization because it is only a matter of time before a union gets a foot in the door. Implementation Plan An implementation plan is a description of detailed actions that show how an organization can achieve requirements and project objectives through planned out steps along with participants who will complete each step within a certain timeline. Policies and laws will be fully enforced by Walmart’s technological prowess (Zimmerman, 2004). The below table is an implementation plan to help Walmart attain transformational change within its organization. Dates for the plan are Monday through Friday, and the timeframe is based on an eight-hour daily work schedule. Table 5 Walmart Implementation Plan Task Name 1. Identify the timeframe when management shifted its priorities Accountable Parties Executive Board and management Dates 05/04/20-05/05/20 Timeframe 08:00 – 12:00 1:00 – 5:00 PROFITS OVER CUSTOMERS 2. 3. 4. 5. 6. 7. 8. 19 from customers first to profits and hire more people-oriented managers Form a council to explore the benefits and drawbacks of unionizing the organization and increasing wages across the board Form training team consisting of one assistant manager, supervisor, and associate to promote change and team comradery Create a vision that focuses on teamwork, employee empowerment, diversifying promotions, and understanding of international culture Communicate the vision through face-to-face meetings, company intranet, and meetings daily Create a reward program to recognize productive associates and increase benefits for part-time employees Launch training programs that provide more on the job training and hold team building seminars Insert organizational changes into the current culture to promote employee buy-in for future success staff Management and Supervisors 05/06/20-05/08/20 08:00 – 12:00 1:00 – 5:00 Management, Supervisor, and associate 05/11/20-05/13/20 08:00 – 12:00 1:00 – 5:00 Executive Board 05/14/20-05/20/20 08:00 – 12:00 1:00 – 5:00 Management and supervisors 05/21/20-06/17/20 08:00 – 12:00 1:00 – 5:00 Executive Board and management staff 06/18/20-06/19/20 08:00 – 12:00 1:00 – 5:00 Training Team 06/22/20-07/01/20 08:00 – 12:00 1:00 – 5:00 Executive Board, management, and supervisors 07/02/20-07/22/20 08:00 – 12:00 1:00 – 5:00 Note. Adapted from Kotter’s Eight-Stage Model (1995). Resistance to Change Plan The manifestation of resistance to change can appear in multiple forms, such as rebellions, foot-dragging, or sabotage, so managers must be able to predict and come up with strategies to combat or minimize sources of resistance. People usually resist change because they fear the unknown over the known (Moutousi #038; May, 2018). The table below emphasizes the spheres of concern and corrective actions: Table 6 Resistance to Change Plan PROFITS OVER CUSTOMERS 20 Areas of Resistance Change uncertainty Fear of failure Loss of control Plan to Address Resistance Provide a clear step-by-step plan Create a training learning curve Encourage employees to voice opinions and participate in the process and take ownership More work Provide incentives for hard workers Ripple effect Minimize disruptions to customers and other departments Note. Adapted from Palmer, Dunford, #038; Buchanan (2017). Change Uncertainty When people are uncertain about what and how the change will affect them, and then resistance becomes the natural response. Most people, by nature, prefer to keep things the same rather than veer towards the unknown. Managers should create a process that has timelines, simple steps to follow, and is transparent. Fear of Failure Fear of failing in an endeavor can make anyone feel as if they cannot accomplish anything or feel they are stupid. Changing a known process can trigger anxiety and prompt employees to question their ability and skill-set, leading to self-doubt. Managers should provide reassurance through education programs, information, training, and systems to support employees. Loss of Control Change causes people to feel like everything around them is changing, and they have no control over the situation. One feels as if we are no longer in charge of our destination, but controlled by another. Managers should provide employees with choices and encourage employees to participate in the change process by assuming ownership. More Work PROFITS OVER CUSTOMERS 21 Most people only like doing the job or work assigned them, but change adds extra tasks to an already heavy work schedule. Those who have to test out the change plan before implementation is overworked and overloaded. The way leaders can combat these feelings is to recognize hard workers and their families by providing extra incentives or perks such as meals or bonuses. Ripple Effect Meaning once a change goes into effect, the disruptions from one department can be felt in other departments. The longer the disruption, the wider the ripple expands and can affect customers and even the community. Management should coordinate with all areas affected to include outside parties to minimize disruptions. Communication Plan Change initiatives for Walmart will be designed through a communication plan that will consist of points pointed out that need attention throughout the organization, such as the strategies and goals the company is trying to achieve, training, wages, teamwork, compensation, diversity, company culture, and employee empowerment. One way to connect with each group or echelon of an organization through conversations and message structures is through a healthy communication plan (Van Hove, 2016). Once areas of concern are identified that need change, the question becomes, how will these changes be accomplished? According to Vilkas and Stancikas (2006), organizations achieve change through guidelines and conceptualizations during the planning stage of change up until the time of implementation. The below table will address how communications issues will be handled: Table 7 Walmart’s Communication Plan PROFITS OVER CUSTOMERS Communication Plan 22 1. The training team will provide all correspondence addressing times and locations for management and employees to attend. All parties will be informed of training sessions via email for two weeks, 48 hours, and 24- hours before training, and dates and times will be posted on the company’s bulletin board. 2. Information in regards to changes within the organization will be disseminated to those parties directly affected three months before changes going into effect. 3. All Executive Board members and managers will be notified via private correspondence from the training team lead monthly if employees do not attend training sessions. 4. When addressing unionizing Walmart, the steering committee assigned to do research will provide the Executive Board with its findings, either positive or negative, within three months of the committee concluding its investigation. 5. During orientation, all new employees will receive procedures and policies detailing the vision, mission, and goals of the organization along with wages, benefits, and rewards for part-time or full-time employees will be presented on the first day. For the next two weeks, management will interact with each new employee to make sure they understand their benefits. 6. Times of meetings addressing changes will be communicated via email, text message, and phone call if employees are off for a significant time. 7. A committee will be assembled to address employee’s concerns or ideas about the coming changes, and a response will be provided to the employee within one week or five working days. Note. Adapted from Palmer, Dunford, #038; Buchanan (2017). Evaluation Plan The way to describe how to monitor change progress is through an evaluation plan, which evaluates how well a change initiative is working and how to use said results to better a program. According to Lavinghouze and Snyder (2013), an evaluation plan looks at and clarifies the why, how, and what of a program. An evaluation plan needs to be partially constructed from the beginning of the planning phase and during the decision-making process so measures can be PROFITS OVER CUSTOMERS 23 refined (Lubejko, 2016). The table below discusses how data will be collected, measures used, timeframe, and how results will be shared: Table 8 Walmart’s Evaluation Plan Data collector ➢ Training team members will conduct training sessions, and local store managers will hold meetings to address concerns and implementation of changes. Surveys will be sent out to all participants’ management and employees alike via email following the training to see if the training was effective. All surveys and training reports will be sent to the consulting team for review and Evaluation. Measures ➢ ➢ ➢ ➢ ➢ ➢ ➢ ➢ ➢ Where associates provided information about the changes promptly? Was management open to employee’s suggestions about changes? Were concerns and questions quickly answered by management? How satisfied are employees with the current state or environment at Walmart? How would associates rate ongoing job satisfaction? What communication methods were used in information dissemination? Was adequate training received to meet the desired outcomes? What additional training should be offered to meet employee’s needs? Did revenues change during the transformational period? Timeframe ➢ Surveys and questionnaires will be emailed or handed to managers and employees after each training session or meeting and will be asked to return completed forms within 48 hours. Results ➢ The final results of the change initiative will be sent to the Walmart Executive Board and shared with local store managers and store associates. Promoting transparency builds confidence and a dialog of communication between the Executive Board, managers, and associates, not to mention customers. Note. Adapted from Lavinghouze #038; Snyder (2013). Data Collector The consulting team lead will obtain data from the training team lead that will collect all surveys and questionnaires regarding the results of the training program, job satisfaction, communications, and revenue changes. Upon data collection, a review and evaluation of the PROFITS OVER CUSTOMERS 24 data will be compiled into a report which will be sent to the Executive Board for review and dissemination to the organization. Measures Walmart’s evaluation plan regarding communication dissemination, question and answer sessions, training program, job satisfaction, and revenues will measure the success or failure of the change initiative at Walmart. The surveys and questionnaires will be useful in helping the Executive Board, managers, and associates on areas of training that need to be refined, improved or kept in place after the first six months. These measures will also help the Walmart finance department adjust revenues. Timeframe Timing is imperative when obtaining crucial information from management and associates where surveys and questionnaires are concerned. Questionnaires and surveys will be handed out or emailed to managers and associates after each meeting or training session and asked to be filled out and returned within 48 hours. The short turnaround allows the consulting team to record and document information from recipients, while data is still fresh within the minds of the participants. Results The results will be collated and reviewed by the consulting team and then sent to the Walmart Executive Board to be distributed to local mangers and associates, providing a dialog of transparency within the organization. Conclusion The reason for this report was to identify why Walmart was established and areas that need to be changed to reset Walmart back on its original path of putting customers first over PROFITS OVER CUSTOMERS 25 profits. The first area reviewed was triggers that identified areas that were lacking in structure and needed to be changed for future growth. The six-box model showed the current state of Walmart as an organization and areas that could use changes such as management values, wages, lack of training, little to no teamwork, and minimum diversity among employees. The primary recommendations that influenced areas that needed changes came from external and internal analysis. The cultural web for the Walmart organization discussed internal and external issues that can assist in identifying problem areas for the organization and community. The foundation for a strategy plan for Walmart came from a multitude of opportunities and strengths. Walmart’s reputation and image hinged on the Executive Board’s willingness to change, so an assessment plan was established to assess if the change plan works. Future endeavors and success are subject to an organization’s ability to change, so an implementation plan has been created. Employee resistance is a common factor when the company changes its functions, so opposition to change plan has also been established. Change is hard on employees, so a communication plan was developed to help employees understand why the organization is enacting changes, help workers adapt, and what they are expected to do during and after the change process. Finally, with all the changes recommend to Walmart, an evaluation plan was developed to monitor each step of the process to make sure the changes are effective. PROFITS OVER CUSTOMERS 26 References Austin, T., Chreim, S., #038; Grudniewicz, A. (2020). Examining health care providers’ and middlelevel managers’ readiness for change: a qualitative study. BMC Health Services Research,20(1), 1–14. https://doi.org/10.1186/s12913-020-4897-0 Horațiu, D. (2013). External Factors for the Monetary Policy Transmission Mechanism. Annals of the University of Oradea, Economic Science Series, 22(1), 435–444. Kaelberer, M. (2017). Wal-Mart goes to Germany: culture, institutions, and the limits of globalization. German Politics and Society, 35(1), 1. Lavinghouze, S. R., #038; Snyder, K. (2013). Developing Your Evaluation Plans: A Critical Component of Public Health Program Infrastructure. American Journal of Health Education, 44(4), 237–243. https://doiorg.libproxy.troy.edu/10.1080/19325037.2013.798216 Lubejko, B. G. (2016). Developing a program evaluation plan: Options and opportunities. The Journal of Continuing Education in Nursing, 47(9), 388-389. doi:http://dx.doi.org.libproxy.troy.edu/10.3928/00220124-20160817-02 Moutousi, O., #038; May, D. (2018). How Change-related Unethical Leadership Triggers Follower Resistance to Change: A Theoretical Account and Conceptual Model. Journal of Change Management, 18(2), 142–161. https://doiorg.libproxy.troy.edu/10.1080/14697017.2018.1446695 Palmer, I., Dunford, R., #038; Buchanan, D. (2017). Managing Organizational Change: a multiple perspectives approach (3rd ed.). New York, NY: MCGRAW-HILL. PROFITS OVER CUSTOMERS 27 Shatilo, O. (2019). The Impact of External and Internal Factors on Strategic Management of Innovation Processes at Company Level. Ekonomika / Economics, 98(2), 85–96. https://doi-org.libproxy.troy.edu/10.15388/Ekon.2019.2.6 Van Hove, N. (2016). An S#038;OP Communication Plan: The Final Step in Support of Company Strategy. Foresight: The International Journal of Applied Forecasting, 42, 5–10. Vilkas, M., #038; Stancikas, E.-R. (2006). Modeling of Planned Change of Organizational Work Processes in Terms of Process’ Internal Structure. Engineering Economics, 49(4), 76–86. Zimmerman, A. (2004, Jun 07). Walmart plans changes to wages, labor practices. Wall Street Journal. Retrieved from https://search-proquestcom.libproxy.troy.edu/docview/398866409?accountid=38769 PROFITS OVER CUSTOMERS 28 Appendix Walmart Change Assessment Table A1 Organizations Readiness to Change Assessment The purpose of this diagnostic is to assess whether a specific organizational change initiative, project, or program has been well planned. Before you begin this assessment process, therefore, you must agree on a description of the proposed change or changes: Assessment Question Scores “1” through “7.” Ranking 1. The change proposal has been financially justified as giving an adequate return on investment. 2. The assumptions on which the financial justification is based have been fully defined. 3. The costs of the proposed change have been realistically predicted-that is, all possible costs have been identified. 4. The costs of disruption to the present systems have been specifically identified 5. The leadership of the proposed change has been identified. 6. The leaders of the proposed change are willing volunteers. 7. A comprehensive implementation plan for the proposed change has been prepared. 8. All of those who could comment on the plan have had adequate time to study it. 9. Care has been taken to ensure that the risks inherent in the proposed change have been identified and assessed. 10. Outside comment from impartial specialists has been invited on the wisdom of the proposed change. 11. Consideration has been given to the new skills that will be required for the effective implementation of the proposed change. 12. All those who could inhibit or stop the No financial justification Full financial justification Assumptions not defined Costs not identified Assumptions clearly defined All costs identified Disruption costs not identified Change leaders not identified Change leaders are not willing volunteers No comprehensive plan No adequate comment Risks not identified or assessed No external comment invited Disruption costs identified Change leaders identified Change leaders are willing volunteers Comprehensive plan prepared No consideration of skills requirement Potential Full comments available Risks identified and assessed Comprehensive external comment invited Full consideration of skills requirement Potential 7 6 6 6 7 7 7 6 5 6 5 6 PROFITS OVER CUSTOMERS proposed change have been identified. 13. A strategy has been devised for winning over all those who could inhibit or stop the proposed change. 14. The proposed change can be linked directly with the strategic plans of the organization. 15. Those responsible for the proposed change have studied the nature and outcomes of similar initiatives in other organizations. 29 blockers not identified No “winning over” strategy identified No clear links with strategic plans No other organizations visited or reviewed No allowances made for customization blockers identified Comprehensive “winning over” strategy identified Clear links with strategic plans 6 7 Several other organizations 7 visited and reviewed 16. Although based on similar initiatives Realistic elsewhere, the need to tailor the proposed allowances made 5 changes to the local context is recognized. for customization 17. Clear success criteria and success No success Comprehensive measures have been identified. criteria or success criteria 6 measures and measures identified identified 18. Procedures have been established to help No learning Comprehensive the organization learn from the experience of procedures in learning 6 implementing these changes. place procedures in place 19. Top management is deeply committed to No top Full top the success of the proposed changes. management management 7 commitment commitment 20. The overall leadership of the proposed Uncertain overall Superior overall change is able and willing to exercise decisive leadership leadership 7 leadership. TOTAL: 125 Scoring: 20-40 – Considerable anxiety should be experienced about the proposed changes. 41-80 – Much work needs to be done to develop an effective change program. 81-100 – The proposal is well developed, but change management can be improved. 101-140 – This is a well-planned change proposal. Action: Where are the main problems and blockages, what can we do to address those? Identify those items that you scored with five points of less, or use the average item scores for the group or team as a whole. Select five lowest-scoring items. Prioritize these, then brainstorm appropriate actions to address each of them in turn to improve readiness: PROFITS OVER CUSTOMERS Problem items: 1. Management putting profits and sales over employee needs. 2. Lack of benefits for part-time employees. 3. Lack of employee empowerment. 4. Lack of diversity in promotions. 5. Discouragement of Unions. Note. Adapted from Exercise 4.3 (Palmer, Dunford, Buchanan, 2017). 30

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