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Wal-Mart Case Study Essays

Decent Essays

1. What were the main elements of the control system that Sam Walton created?

It is evident that Sam Walton believed in the importance of control systems in an organization; as he established certain strategic control systems in the company. Walton wanted everyone within the organization to be committed to Wal-Mart's goal "total customer satisfaction", and the strategic control systems were set accordingly.

There are various elements of control systems used in Wal-Mart which are:

Personal Control
An example is when there is an underperforming store; top managers visit these stores in order to lend their expertise to the employees there. Moreover, they fly on monthly basis to various Wal-Mart stores locations to check their …show more content…

Wal-Mart's control systems help achieve the basic building block and high competitive advantage:

Efficiency
One of the control systems in Wal-Mart is the financial control system that provided managers with day-to-day feedback about the business performance; where the financial performance of each store and even each department within each store can be tracked and monitored through a sophisticated companywide satellite system. This control system helps sharing profitability information and inventory turnover rate among associates; which as a result gives them an in depth insight into the retailing business and work on improving it.

Furthermore, the above control system helps identifying if there is an underperforming store in the business in order to take immediate action; where managers and associates meet to find solutions and raise performance. Besides, top managers pay routine visits to stores with lower performance to lend their expertise. Another interesting strategy is that every month top managers fly to different Wal-Mart stores in order to inspect their performance, and they meet on Saturdays to discuss financial results and future implications.

On the other hand, another control system the organization is their rewarding strategy; as they link their performance and abilities to meet goals and targets to pay raise and promotion.

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