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There have been the concerns on the nature of a protocol for decision making in organizations. It has also been difficult to determine whether to implement the ideas from employees or those from their seniors. These difficulties have been experienced in a number of companies operating both locally and internationally. The uncertainty of whether to rely on the ideas of employees or management has been extensively experienced in Wal-Mart. This is a large scale retail outlet that is located in the US and considered as the largest retailer and the second largest corporation. It is also supposed to be the largest employer. However, the company has made some headlines in the previous five years around bad relationships and management practices between employees and their management in terms of contribution of the ideas and their implementation (Amit & Schoemaker 2003). The headlines also were revolving around Wal-Mart’s unemployment activities, while it is considered to be the company with the policies used at Wal-Mart being less favourable to employees. There is the evidence that shows the consequences of these policies to be true. For instance, it has been observed that some of wrong consequences that have emerged include the reported reduction in income and the misuse of financial resources as well as the violations of laws related to the employees’ management, i.e. the inadequate health provision, exploitation of employees as well as the companies’ stance against a union. This has resulted into the need to evaluate the relationships of decision making process between the management and employees in the areas of ideas’ contribution and decision making in the company and comparing them with the certain cases that have been implemented successfully in other locations. This paper provides a comparison of management used at Wal-Mart and the management theories existing so that an understanding of reasons for the problems existing can be established.
1. How Does the Semco’s Approach Challenge a Prescriptive School’s Strategy
There are many ways, in which Semco’s approach of management is critical to the prescriptive school of management. For instance, according to the prescriptive school of management, the upper organs of management are involved into a decision making process. Subordinates are not allowed to make any decisions (Barney 2001). They are only allowed to follow the directions of their superiors. Conversely, the descriptive school of management puts a bigger emphasis on lower rungs moving upwards. This is criticized by Semco’s cases, since according to his argument, this is challenged by Semco’s approach. According to this approach, management should execute without any control. His idea is that ongoing transformations in the organization should include the participation of all employees without preventing them from making their own decisions. Semco argues that people should be given freedom to do what they want to, and over a long time it will be observed that their success is greater than their failures. He advocates for employees to practice trial and errors. Semco advocates for the need to forget about the top line. He advocates that the business itself has to ensure that there is the success in operations of business. The business does not simply the need to be big and successful. He also explains that there is the need to evaluate the actions of every member of the organization. For instance, all managers need to be evaluated and rated, and their ratings should be posted on the public places.
Furthermore, the prescriptive school of management focuses on a strategy formulation process proposed by Bogaert, Martens and Cauwenbergh (2004). It is the condition where the right processes are used; and also places of the high priority in content of the strategy. More care is placed on the decisions made by managers rather than the way how they make these decisions.
This is challenged by Semco’s approach, which argues that the process of hiring specific people that may follow a particular process should not be practiced. The practice of choosing the type of business that the person engages in should not be practiced in the organization. It also criticizes the practice of not taking into account what an individual wants. This has been observed to be the consequence of connection between the corporate and the employees’ needs demonstrated in the high rates of conflicts in such talents that will have a negative consequence on the company at the moment. According to the recommendations of Semco, people should be allowed to choose where they want to work and select the actions that they need to get involved in. When the employee finds a place that for the best fits his/her interests, he/she stays there.
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There is also no engagement of eye-to-eye in the planning process, and when it should take place. Managers using the prescriptive management strategy focus on planning in advance. Changing conditions are not taken into account (Brickley, Smith & Zimmerman 2005). This approach of prescriptive management is also challenged by Semco’s ideas. It proposes that businesses need to allow employees to propose new decisions and ideas by allowing them to make clear and fast decisions. The proposals should be forwarded to the boards, which converge into meetings to elaborate on the ides. All employees are allowed to attend the meetings and proposals to involve the simple criteria that control business operations. For instance, business has to be a major provider of its products and services. According to Semco’s prescriptions, there is the need to start up operations whenever a specific operation cannot be implemented. This can be done through the rigorous budgeting and planning process. There can be a possibility of forcing every one of businesses to demonstrate the continued existence.
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In addition, the prescriptive management seeks to come up with a formulation of strategies that enhance the performance. They are also focused on making the company survive, while learning is based on the experience that can contribute to the success of business and carry out a great weight. This idea is also criticized by Semco’s idea, which explains that there is a trouble in trying to engaging in such traditional ways of applying a specific strategy in managing a process. For instance, it has resulted into the young startups being forced into the molds of past cultures broken down. These strategizing cultures have been observed in the use of traditional methods, such as the secretaries sitting in corners or the actions left to the HR departments that do not have any knowledge on the challenges faced on the ground. According to Semco’s argument, successful businesses do not need to fit themselves into a tight mold. He suggests that it is possible to build a great company without applying the use of fixed plans. He also argues that the organization can be efficient without the use of power. It suggests that the faith in people is significant in ensuring all sectors of operations are being managed well.
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2. Relevance of Semco’s Approach for Management of Wal-Mart to Ensure Competitiveness
Semco’s approach is considered to be a potential technique that can be used to achieve the management goals of Wal-Mart. The philosophy of giving its people the freedom to do the actions they need to do is considered to be beneficial during a long run. For instance, Wal-Mart can allow its employees make some decisions related to the display of products and the nature of operations such as serving its customers. They will always ensure that their actions are beneficial to the organization in the long run, even if they use a different approach from the one being used in the company. In addition, the recommendations of Semco to forget about the top management are to forget about the need to focus on the growth of business but instead to focus on its survival. It suggests that pushing businesses to new levels should be avoided. They should be allowed to start fresh. Also Semco proposes that the revenue targets should not be set for businesses. This approach of management will be useful for Wal-Mart. It will ensure that the company does not focus on its profits but only on finding its natural size in order to ensure customers are being made happy. The culture of not forcing employees to expand the activities to the limits being beyond the capacity of the company will be avoidable by encouraging employees to rely on them rather than to build up.
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The proposal of Semco’s continuity to start-up is also likely to bring the positive implications for Wal-Mart. This involves the process where the company conducts rigorous budgeting and planning to ensure it continues to exist. The major decisions are made as the situations arise. For instance, the possibility of alienating more customers and the process of looking at the entire organization as well as the evaluation of performance of all managers anonymously by all employees to assess the management process provides their ratings. This practice will result into censure actions on managers. They will be compelled to perform their duties diligently to achieve the success of the company.
It is also possible to achieve the management goals of Wal-Mart by not treating employees like babies which cannot make their own decisions. This is because treating them like immature people will make them behave exactly in that manner. They cannot be able to conceive ideas or try new things or make use of opportunities. Their actions will only be focused on what they are told of. The practice of being liberal to employees is considered as a driving force for the success of management of any company. Wal-Mart can also implement these practices in terms of the not set times during office hours and allowing employees to dress casually. Employees can also be allowed not to use employment manuals. Human rules can be removed from management system. It can also eliminate the functions of the Human Resource and still become successful. Practices that can be implemented by Wal-Mart to be assured of the success include such as allowing employees to take leaves and holidays as much as they need additionally to choose how they need to be compensated. These practices make employees independent in their decisions. They believe in the trust that the company has in them. Consequently, their actions will be faithfully executed to meet the goals of the company. These practices are also significant in ensuring that employees are being treated like adults, hence, they will behave like adults. The company can also put more emphasis on the performance rather than regularity of attending a job. For instance, employees reporting to work two days per week at the beach and still bring the value to customers and other workers of the company should be recognized more. This means that those spending more than ten hours per day at their work places but still do not bring any value to the supply chain should be appreciated less.
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The practice of letting talent tae is the place used at Semco’s company that can also be applied for management of Wal-Mart for the sustainability of its activities. This involves the practice of allowing employees to work in such areas where their talent is more appreciated than where they have been assigned to work. It ensures that the company considers the aspirations of the individual. The resulting connection between the corporate needs and the talents of an individual will be demonstrated if this practice is implemented. By applying this practice on its employees, Wal-Mart will ensure employees are allowed to do what they desire and where they intend to work. Thus, it will let them work with those they intend to. This practice involves the recruitment culture where employees spend at least six months of their recruitment time floating around the company and observing businesses, coming into contact with people and trying out new jobs. This ensures that a newly hired employee finds such a place that best fits his/her desires and interests. Thus, he/she remains there.
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The other recommendations of Semco that can be implemented by Wal-Mart to increase the balance of power between employees and management are making decisions quickly and openly. The practice of abandoning to force employees to go through a complicated rigorous review and an approval process ensures that the individual initiative is not killed. This practice will result into enabling employees at Wal-Mart to come up with ideas. This ensures they are being fast and efficient in a decision making process. For instance, the company can create the practice where all employees are allowed to be present during board meetings, while proposals need to be approved by boards through the evaluation of certain criteria for their feasibility. For instance, the proposals forwarded have to ensure that a product or a service has some complex and requiring high skills as well as creating the high entry barriers. A proposal that meets these conditions is considered as feasible; thus, it is executed. The chain store can also consider a project as a minority investor in case it has not been successfully approved.
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The other practice that can be used by Wal-Mart to improve its management practices include partnering promiscuously by exploring and launching new businesses quickly and efficiently. The process of exploring new ideas can be successfully achieved through seeking help by partnering with other companies to gain the access to ideas and bring new capabilities and experiences or sharing risks. By partnering with other companies, Wal-Mart will be able to get a foundation for expansion of its activities over the years. The process of partnering can also take place between the company and its employees.
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