Sam Walton Essay Example

so they can be successful.

3) Uses of internet: As for what Wal-Mart succeeded from the outcome, the only thing I can seen is when Wal-Mart tried to use the internet to broadcast what they have, what great deals they have going on for the week, and another great option was for customers to be able to buy merchandise online.

4) Dedication of the Workers: Wal-Mart is part of the growth mindset, because no matter what obstacles were put in their way they worked hard to overcome them. They would see items not work out to their advantage and try to fix the problem and resolve it.

5) Unique inventory system: Wal-Mart has invested heavily in its unique cross-docking inventory system. Cross docking has enabled Wal-Mart to achieve economies of scale which reduces its costs of sales. With this system, goods are continuously delivered to stores within 48 hours and often without having to inventory them

6) Own transportation system: Company owned transportation system also assists Wal-Mart in shipping goods from warehouse to store in less than 48 hours. This allows Wal-Mart to replenish the shelves 4 times faster than its competition.

7) MIS: Wal-Mart owns the largest and most sophisticated computer system in the private sector. It uses a MPP (massively parallel processor) computer system to track stock and movement which keeps it abreast of fast changes in the market. Information related to sales and inventory is disseminated via its advanced satellite communications system.

8) Good Purchasing Agents: Wal-Mart has leveraged its volume buying power with its suppliers. It negotiates the best prices from its vendors and expects commitments of quality merchandise. The purchasing agents of Wal-Mart are very focused

people.

9) “Buy America” Policy: Sam Walton received national attention through his "Buy America" policy. Through this plan, Wal-Mart encourages its buyers and merchandise managers to stock stores with American-made products.

10) Environmental Concern: Environmental concerns are important to Wal-Mart. A prototype store was opened in Lawrence, Kansas, which was designed to be environmentally friendly. The store contains environmental education and recycling center.

11) Cost Reduction method: Wal-Mart has also adopted the low cost theme for its facilities. All offices, including the corporate headquarters, are built economically and furnished simply. To conserve energy, temperature controls are connected via computer to headquarters. Through these programs, Wal-Mart shows its concern for the community.

12) Bondage between the employees: Wal-Mart has been led from the top but run from the bottom; a strategy developed by Sam Walton and carried on by a small group of senior executives led by CEO David Glass. Although recent growth has led Wal-Mart to add more management layers, senior executives strive to maintain its unique culture.

Question 2: How would you describe Sam Walton as an effective leader? What leadership theory is consistent with his leadership style?

Answer to the question number 2: Introduction Sam Walton was born in March 1918 at Kingfisher, Oklahoma, US. After graduating in Economics from the University of Missouri in 1940, Walton joined the famous retailer, J C Penney, as a management trainee for $75 per month. In his first job, Walton displayed all the qualities of a good salesman. He realized the importance of building loyalty among customers as well as employees. Walton left his job in 1942 and served the US army during World War II. When the war ended, he decided

to establish his own retail outlet.

Walton purchased a store franchise from 'Ben Franklin' in Newport, Arkansas, in 1945. This is the beginning of the world’s biggest retails outlet, “WAL-MART” How he became an effective leader

1. Stick to fundamental values Sam Walton had simple values that guided him through his life and business. He didn’t follow the latest management fad, nor did he believe in any of the get-rich-quick ideas.

2. Don’t follow the money, follow your passion Sam Walton didn’t start off his variety stores with an ambition to become rich; he simply had a passion for his craft and at each point in time, he only wanted to do it better and better.

3. Take care of your people Sam Walton took extremely good care of his employees and he gave very employee a chance to become successful with him by allowing them to purchase stock options of Wal-Mart at a discount. He treated them as associates of the business and wanted them to enjoy part of Wal-Mart’s success.

4. Commit to your business Sam was very much committed to his business. His integrity and honesty and dedication towards his work make him an effective leader.

5. Share your profits with all your associates: He always shares the annual profit to his associates. Thus the workers are very much happy and getting motivation towards work.

6. Motivate your Employees: Walton always motivate his employees so that they can give their best output to the company. Walton personally visited the entire retails outlet every week, he knows all his support staff personally, he named by the nick name of the workers, thus the employees are very much motivated.

7. Appreciate everything:

Sam Walton appreciates the worker’s success and he gives prizes best seller of the month of every retail outlet. Thus all his workers are getting heavily appreciated. His great leadership makes the workers very loyal to the organization.

8. Celebrate the success: When Wal-Mart arrange any kind of program, all the workers and the managers must be participate in that occasion. The main target of Walton is to celebrate the success with everyone.

9. Listen to everyone in the company: Walton manages the yearly evaluation system in the retail outlet, thus he can get to know the proper scenario of the manager’s attitude towards his employees.

10. Exceed your customer's expectations: By extreme good environment and comfortibility, Wal-Mart gets the heart of the customers.

Also for the competitive low prices, clients are habituated to go and shopping in the Wal-Mart outlet. There are 8 leadership theories exist, these are:

1. "Great Man" Theories: Matches with the characteristics of Sam Walton

2. Trait Theories

3. Contingency Theories

4. Situational Theories

5. Behavioral Theories

6. Participative Theories

7. Management Theories

8. Relationship Theories: Matches with the characteristics of Sam Walton. Among these leadership theories, Sam Walton’s Leadership Style is consistent with the Great man and also relationship theories.

Great Man Theory: Walton was a by born leader, he has successfully graduate and then he was a soldier, after that he had successfully started to run his business by the next 50 years, the success was in his hand, his ability and integrity made him a by born leader, some people born by leader, the leadership capability has been injected from their birth time, and some people grew a leader by the situation demand, Sam Walton is the first category person.

Relationship theory: Also he has made a very good relation with his subordinate people.

Even the floor washer’s name is known to him, he called every one of his organization by their nick name, he always take the information of all the employees, thus this leadership qualities relate with the relationship theory.

Question 3: What factor’s other then the leadership style contributed towards the survival and growth of the organization? Support your reasons. Answer to the question number 3: The factor’s other then the leadership style contributed towards the survival and growth of the organization is describes as follows:

Productivity Loop: the productivity loop reveals a remarkable simplicity behind Wal-Mart's success. The loop explains the "motion" of Wal-Mart “Genetic" makeup: The DNA of an organization refers to its internal, hard-wired character. This is in contrast to its external traits. Many executives trying to duplicate the success of Wal-Mart think that they can do so by duplicating visible competitive advantages such as Wal-Mart's everyday-low-price (EDLP) position, its low cost structure, its streamlined logistics and distribution network, its information systems prowess, and its partnerships with vendors.

Dedication of the Employee: Wal-Mart executives believe that perpetuating the company's DNA is one of their chief jobs. They dedicate the first Saturday meeting of every month to culture, asking one or two managers to give a prepared talk on what the culture means. They also lead mandatory culture training for all new managers. During training sessions at the Walton Institute, they teach trainees about everything from expense control to continuous improvement.

Private satellite communication: Wal-Mart operates a private satellite communications system that sends point-of-sale (POS) data to all its vendors, allowing them to have a

clear picture of sales at all its stores Large Profit Margin: Wall-Mart has a dedicated fleet of 2000 trucks, and on-average, stores are replenished twice a week. Cross-docking enables Wal-Mart to achieve economies of scale by purchasing full truckloads. It reduces the need for safety stocks and has cut the cost of sales by 3 percent compared with the industry average, a major factor explaining Wal-Mart's large profit margins.