Assignment 5: Change Management Plan

Diagnosing Change: Wal-Mart Company

Penny Williams

HRM 560: Managing Organizational Change

Dr. Allan Beck

April 28, 2019

Wal-Mart Company Overview

Wal-Mart is a US-based company with headquarters in Arkansas where it was founded in 1962. It specializes in physical and online retailing of a variety of consumer products such as groceries and other food items, entertainment products, clothes, and health products. The company also specializes in technology and entertainment and runs discount stores. Its revenues were reported to be US$500,343 million in the year 2018 (Wal-Mart, 2019). Its operating margin in 2018 was 3.5% whereas the net margin was 2% (Wal-Mart, 2019). The company owns about 4,578 and leases 780 stores in the US, and owns 2,142 and leases 4,218 stores internationally (Wal-Mart, 2019). The company has more than 100,000 employees, and is visited by more than 27 million customers each week (Wal-Mart, 2019). This indicates that it has a good number of loyal customers at home and oversees.

Current HR Practices and Policies that should be changed

One of Wal-Mart’s HR policies that should be changed is the practice of instilling foreign culture on overseas branches. There is a practice and tendency in which when Wal-Mart opens new branches oversees, it fails to incorporate the aspects of the country’s culture in such overseas branches. Instead, the company assigns its home citizens to those branches and requires them to behave they usually behave at home overseas. Besides, most employees who will be hired in overseas countries to work in those subsidiaries are usually allocated manual positions so that they do not interact with customers (Kowitt, 2018). As a result, many cases of low sales are often reported due to the culture clash. For instance, the company demanded that expatriate employees smile at customers when serving them, which is a bad sign in some cultures such in as Germans, which eventually led to low sales.

Another HR policy and practice that should be changed at Wal-Mart concerns the hiring of immigrants. There are many challenges that immigrants face as a result of bureaucratic and exploitative policies that to some extent infringe on human rights. The company hires immigrants including the undocumented ones. The problem is that after being recruited by subcontractors on behalf of the company, there are no policies that protect such workers from exploitation. Some of the immigrants are overworked since they have to work throughout the night continuously for more than two months, and their wages are significantly lowered (Smith, & Etter, 2018). Besides, there are no health coverage policies for immigrant workers, and the available healthcare coverage packages are too expensive for the casual workers to afford, which reduces the long-term health prospects of such employees. Furthermore, immigrant employees’ names are not documented in the company’s database. Instead, they are given ghost names that they are identified with during payment.

The third inappropriate HRM policy that needs to be changed is the limitation put forth that bars workers from forming labor unions. Ever since the year 2000, Wal-Mart has been accused by different labor union agencies of destroying the gains that have been made on the establishment and functionality of labor unions. The company does not want its employees to form labor unions or to be active members (Massengill, 2013). In China for instance, there were protests against the company when it banned workers unions. Wal-Mart decided to close down its four stores where workers were requesting for better employment terms. The company asked the employees to choose between retiring of relocating to other branches. There would be no rewards for employees who choose to retire, and those who would go to other branches would work under similar conditions. Besides, there are different outlets in which the company prohibits employees from forming or being members of unions through brochures placed in boxes in strategic locations in the workplace.

Reasons for the need for Change of the HRM Practices

Alignment to Market Dynamics and Customer Preferences

The agenda of aligning business practices and strategies is an important element that needs careful consideration when developing business strategies and HRM policies. In order for Wal-Mart to survive in its overseas units, it is important that the company considers how the customers in those countries view themselves, their culture, and consumer tastes and preferences. Whenever a company is investing in new regions or expanding its branches oversees, it is necessary for it to consider diversifying its workforce by offering equitable job opportunities irrespective of cultural or ethnic differences. An increase in team creativity increases with increase in diversity because each individual team member will make unique contributions that will collectively increase the team’s productivity (Hayes, 2018). As such, it is necessary for Wal-Mart to integrate foreign cultures in their overseas in its overseas units, and offer people from such cultures equitable job opportunities.

Equitable Treatment of Employees

Now that Wal-Mart employs immigrants and minority groups, it is necessary for the management to consider treating both documented and undocumented immigrants equitably like other employees. Equity theory stipulates that employee motivation is stimulated by fairness in resource distribution so that when employees perceive that their rewards or treatment is not equal to the effort, they are likely to reduce their competence to equal the rewards they get (Hayes, 2018). Wal-Mart’s HRM ought to remunerate immigrant employees the same as citizens under the same job categories and organize for basic benefits such as medical insurance coverage and quality working environment. Although the company relies on such underpayment and inequitable employee rewards to reduce commodity prices or attract shareholders, it would still do so through strategic marketing and other production techniques instead of exploiting its employees even if they are immigrants.

Employee Motivation

Wal-Mart’s HRM should consider employee motivation before restricting them from registering in trade unions or barring workers from activity participating in workers’ union activities. The main functions of the labor unions include: advocating for employees’ welfare, safeguarding employees from exploitation by malicious employers, pushing for better terms of employment, and fighting for employees’ workplace rights (Li & Liu. (2018). In the absence of labor unions, it is easy for employers to exploit employees by blackmailing them with being sacked or suspensions. In view of the above, Wal-Mart should keep employees motivated and assured of their job security by allowing them to form labor unions that can fight for their rights.

Diagnostic Tools that can be used to Determine Wal-Mart’s readiness for Change

One diagnostic tool that can determine a company’s readiness for change is Kotter’s theory, which maintains the change momentum by emphasizing on the people behind the change more than the change. It involves creation of urgency, establishing a coalition, vision formation, getting the relevant parties to action, removal of barriers, creations of short-term gains, sustaining the momentum, and setting the changes (Hayes, 2018). Another tool is the 7-s model that works by assessing the state of elements such as business strategy, structure, process systems, shared values, staff, skills, and styles (Hayes, 2018). It is suitable for diagnosing unknown problems and issues and for general organizational improvement. The third tool is the Lewin’s change management model, which involves identification of issues of concern, reversal of the decisions that brought the issues about, making necessary changes, and reinforcing the changes if there are positive outcomes (Hayes, 2018). The fourth tool is the ADKAR approach. It involves being aware of the issues that need to be changed, having the desire to make the changes through stakeholder participation, having an appropriate approach of and the ability to make the changes, and reinforcing the changes.

Two diagnostic tools that can be used to determine if Wal-Mart is ready for Change

The two most appropriate diagnostic tools are Lewin’s change management model and the ADKAR approach. The ADKAR model is convenient because it is a bottom-up approach that is often used to solve cases related to issues affecting employees (Hayes, 2018). It also involves consultations and identification of the effects of the issues that call for change. On the other hand, Lewin’s model is appropriate because it focuses a thorough assessment of organizational processes and departments to identify areas of weakness, then changes will be announcement to the relevant teams followed by implementation and reinforcement of the changes (Hayes, 2018). This tool is suitable because it has the potential to eliminate all the three issues identified because it involves a thorough investigation of different systems and departments of the organization, which can help to identify the areas that the loopholes are.

Application of Lewin’s Diagnostic Tool

The diagnostic process will start by identification of the problem that need to be rectified for the good of the company, which in this case is lack of diversity in organizational culture in overseas branches, inequitable treatment of immigrant and minority employees, and lack of the company’s commitment to support labor unions. The second step will be to form a team of experts who will investigate the matter further and determine the root causes and effects of the identified issues. The team will then present their findings to the main stakeholders of the company and the HRM department. The team with the assistance of other stakeholders will create new process maps that will detail how the issues will be eliminated at present and in the future. The process will then be tested for effectiveness and applied if successful depending on the feedback of the main stakeholders and the relevant HRM department.

Interpretation

According to the current HRM practices, it is difficult for all the changes to be implemented. For instance, the company’s CEO and other leaders would not be willing to openly accept that they have employed immigrants-some of whom are undocumented because it is against federal laws. However, allowing employees to join labor unions, and incorporation of foreign culture and workforce diversity in the company’s foreign branches would be accepted by the company’s leaders because resistance has yielded negative results in the past, including strikes and lawsuits that have tainted the company’s image. As such, the company is likely to make the last two changes and ignore the issue of immigrants.

References

Hayes, J. (2018). The theory and practice of change management. London: Palgrave.

Kowitt, B. (2018). The World According to Walmart. Fortune, 178(4), 70–76. Retrieved fromhttp://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=131888309&site=eds-live

Li, C. & Liu, M. (2018). Overcoming Collective Action Problems Facing Chinese Workers: Lessons from Four Protests against Walmart. ILR Review, 71(5), 1078–1105. https://doi.org/10.1177/0019793918784516