Decision Making at Walmart

1. By Connor Corrigan

2. Founding and Origin
 Walmart was founded by Sam Walton in 1962
 Incorporated on October 31st, 1969
 It began trading stock as a publically held company on
October 1, 1970, and was soon listed on the New York
Stock Exchange
 The first stock split occurred in May 1971 at a price
of only $47.

3. Founding and Origin Cont.
 By its 25th anniversary in 1987, there were 1,198 stores
with sales of $15.9 billion and 200,000 associates.
 By 1990, Walmart had become the largest U.S. retailer by
revenue.
 By the mid-1990s, it was far and away the most powerful
retailer in the U.S. and expanded into Mexico in 1991 and
Canada in 1994.
 In 2002, it was listed for the first time as America's
largest corporation on the Fortune 500 list, with revenues
of $219.8 billion and profits of $6.7 billion.

4. Article Overview
 This article from Panomre.com details Walmart’s
approach to the 10 decision areas of operations
management.
 Walmart’s operations management covers a variety of
approaches that are focused on managing the supply
chain and inventory, as well as sales performance.
 The company’s success is partly based on effective
performance in operations management.

5. Article Overview Cont.
 Specifically, Walmart’s management covers all of the 10
decision areas of operations management. These
decision areas pertain to the issues and concerns that
managers face on a daily basis. Walmart’s application
of the 10 decisions of operations management reflects
managers’ prioritization of business objectives. In
turn, this prioritization shows the strategic
significance of the different decision areas of
operations management in Walmart’s business.

6. Decision Making
 Decision making is one of the most critical activities in
any organization.
 Decisions might be made after months of gathering
information and deliberations or even in an instant
with little or no consideration at all.
 Decisions might be made by individuals alone,
through consultation with relevant organizational
members, or in participative groups.

7. Decision Making Cont.
 Decision making is usually left to the individuals that
reside higher up on the corporate totem poll but teams
are also used to make decisions.
 Decisions can be as simple as pricing for a small object
or as complex as a company merger.
 Sometimes decisions can have emotional influences.
Emotional influences need to be minimized for the
good of the company.

8. Walmart’s Poor Decision Making
 Walmart has quite the record of poor decision making:
 Walmart failed to understand the market in Germany and
could not compete with local firms so they left the
market.
 In Mexico, Walmart built Hige U.S.-style parking lots.
Most Mexicans lack cars, and city bus stops were far away
so shoppers could not haul their purchases home.
 Walmart using child slave labor in Bangladesh.

9. Walmart’s Poor Decision Making
Cont.
 In Brazil, families do their big shopping on payday. Isles
were too narrow to accommodate the rush.
 In Argentina, Walmart’s red, white, and blue banners,
reminiscent of the U.S. flag, offended local’s tastes.
 Walmart selling a “Razor Blade Suicide Scar Wound Latex
Costume Makeup” Halloween kit in October, 2016. This
poor decision was particularly sick and appalling.

10. Rational Model of Decision Making
 Organization members notice an issue that requires a
decision
 The decision makers then search for any and all
information relevant to the issue.
 After that, the decision makers develop and propose a
set of decision options and evaluate them for desired
effectiveness.
 When an optimal decision is identified and can be
implemented, the decision making process concludes.

11. Groupthink
 Groupthink: A mode of thinking that people engage
in when they are deeply engaged in a cohesive
in0group, when the members’ striving for unanimity
overrides their motivation to realistically appraise
alternative courses of action.

12. Groupthink Symptoms
 Illusion of Invulnerability: The belief that nothing
can go wrong within the group.
 Illusion of Morality: The self-righteous belief that
the virtues of the group are above reproach.
 Stereotyping: The categorizing of others outside your
group in ways that see their views as unacceptable.
 Self censorship: The overt restraint of group
members against offering opinions counter to the
prevailing thought in a group.

13. Groupthink Symptoms Cont.
 Illusion of Unanimity: The statement of a group
agreement while private doubts and disagreements are
suppressed.
 Direct Pressure on Dissidents: The coercive force
that obliges group members to behave and think in
similar ways.
 Reliance on Self-Appointed Mind Guards: The
protection of the group from contrary information
from outside influences.

14. Participation in Decision Making
 The first major study of participation in decision
making was conducted by Coch and French in 1948.
 They were interested in factors that would enhance
employee commitment to organizational decisions
and found support for their hypotheses that
participation in organizational decisions would make
employees less resistant to change.
 Participation has significant and consistent- but
relatively small- effects on satisfaction and
performance.

15. Questions
1. How will Walmart make up for the horrendous
Halloween makeup kit?
2. Does Walmart have a plan to boost employee moral?
3. How will Walmart fix the issue of the small isles in
Brazil?

16. Works Cited
 Kernagham, C. (2006, October). Children Found Sewing Clothing For
Wal-Mart, Hanes & Other U.S. & European Companies - National
Labor Committee. Retrieved November 14, 2016, from
http://www.law.harvard.edu/programs/lwp/NLC_childlabor.html
 Smithson, N. (2015, August 27). Walmart: Operations Management 10
Decisions, Productivity - Panmore Institute. Retrieved November 14, 2016,
from http://panmore.com/walmart-operations-management-10-decisions-
areas-productivity-case-study-analysis