Internal_and_External_Factoers

Internal and External Factors Paper Many internal and external factors can effect a company. Organizations need to utilize the four functions of management in order to overcome these factors. The four functions of management are planning, organizing, leading and controlling. Wal-Mart has been able to effectively and efficiently apply these functions of management to become one of the largest companies in the world. Their ability to understand and react to factors like globalization, technology, innovation, diversity and ethics will keep them at the top. Wal-Mart has pursued globalization aggressively since opening its first international store in 1991. They understood that they needed to make this step in order to survive as a company. Planning was crucial in their decision on what markets they were going to enter. During the first five years of its globalization, Wal-Mart concentrated heavily on establishing a presence in Mexico, Brazil, Argentina and Canada. They now have a retail presence in 27 countries across five continents. They then had to reorganize their brand and adapt their business model to the cultural differences of each region. Wal-Mart acquired Woolco in 1994 in order to enter the Canadian market and sent transition teams to train and lead the existing associates on their way of doing business. They turned Woolco profitable in two years and a year later they became the largest discount retailer in the country (Gupta, 2002). Wal-Mart’s control systems and management style allow them to manage their international stores successfully regardless of their location. Technology is a marketplace for manufacturing goods and services, a distribution channel, an information service, and more in the organization of Wal-Mart Corporation. It is the successful planning and implementation of this technology into daily practices that has aided Wal-Mart in their quest to maintain the position of low cost leader. One of the most notable advancements made by Wal-Mart in regards to supply chain management was in the evolution of data mined from the universal bar code system. While Wal-Mart was not the original creator of the point of sale system which shifts power to the retailer, they have been noted to be one of the most effective at organizing collected data into useful information. Once an item has been purchased, Wal-Mart has immediate access to information regarding the sale, which would give a full detail, point of sale, product type, price, quality, etc. Combining this with advanced telecommunications, allows for high speed information transfer between branch computers and the central system in order to maintain a real-time database with complete data on inventory levels and assortment. This allows them more leverage over manufacturers as they know exactly what they need, when they need it and what lengths they are willing to go to obtain it. The threat of running out of inventory is reduced as this technology can offset spikes in demand to avoid disappointing customers. In addition, analyzed data can reveal items which are not profitable for the company and may need to be discontinued. Using this acquired knowledge, as well as advanced communication methods, the company is able to properly prepare for the future. Wal-Mart has used their power and influence to help them become one of the most innovative companies in the world. Their current goal is to give customers anytime, anywhere access by combining the smartphone, online and physical stores. They believe following this plan will give them a competitive advantage over any current competitor. Wal-Mart is also trying to green its entire operation. They are constantly looking at ways to create less waste, use more renewable energy, and sell more products that sustain the environment. Projects like improving packaging, greener light bulbs, alternative energy sources, high-efficiency store designs, reusable shopping bags and better supply chains are all ways that Wal-Mart is leading the way in innovation (“The World’s Most Innovative Companies 2010”, 2012). Diversity is one of the most controversial issues that Wal-Mart had to deal with. They are usually in the headlines in a negative light regarding employee wages and minority hiring and advancement. The facts simply contradict many of the accusations. Hispanics and African-Americans make up 35% of the employees and more than 55% of employees are women which is above the industry average. Wal-Mart also does business with over 2,500 minority and women owned business suppliers. In 2008, Wal-Mart gave over $423 million dollars to charitable causes which was double the amount of the next best company (“Wal-Mart a Proven Diversity Leader”, 2009). There have been instances of discrimination at Wal-Mart and they have made steps in order to fix these mistakes. In 2003, Wal-Mart opened a diversity office to monitor and ensure that all its workers have an opportunity to advance. They also vowed in 2004 to cut top executives’ bonuses if they failed to meet planned diversity goals in an effort to improve work conditions. The diversity office has over 140 employees working to ensure to company enforces its rules and procedures. These were all put in place to improve the relationship between Wal-Mart and its employees. Ethics have always been a major focus for Wal-Mart. They operate under three basic principle which are respect for the individual, service to our customers, and striving for excellence. They also put an ethics plan into place to create an honest, fair, and legal workplace. It is ultimately up to the individual to trust their own judgment for any situation. They have been recently been involved in a bribery scandal and are working hard to address and fix these issues. Wal-Mart had implemented an open door policy which allows any associate to voice concerns with the company or any other employee. Management and top executives monitor and get reports on any issues that may arise. Consumer demands are worldwide and companies that want to expand globally and be successful are required to adapt to the needs of their consumers. Wal-Mart has met and often exceeds those demands and has shown the ability to change with the times. The management team has had the vision and ability to effectively promote these demands through planning, organizing, leading, and controlling their business and employees. They have also been able to overcome any issue that has presented itself and also have shown the ability to learn from their mistakes. Wal-Mart has become the largest retailer in the world by using their style of management and implementing them in globalization, technology, innovation, diversity and ethics.