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Detailed Explanation to Organizational Change

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Select a corporation that has changed from a traditional organizational model to a transformed organizational model in the last five years. Identify how the changes impacted the company's diverse workforce and two external stakeholders (e.g. local communities, labor unions, environmental groups, stockholders, customers, salespersons, etc.). Analyze the changes and discuss the following:

a. The skills workers and management must develop to accommodate the changes.
b. The support systems in place to assure the changes are successfully implemented.

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Solution Summary

This is a discussion on companies that has implemented a transformed organizational model and how these changes has affected the workforce and external stakeholders.

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I have taken Wal-Mart as an example.

About Wal-Mart
Founded in 1962 by Sam Walton, Wal-Mart followed an amazing pattern of success and growth, eclipsing all other U.S. department store retailers by the early 1990's. It employs over 1 million people in the United States at 3,400 stores and 1.4 million people worldwide at more than 4,500 retail units in many countries including United States, Mexico, Puerto Rico, Canada, Argentina, Brazil, China, Korea etc. Sam Walton, the founder of Wal-Mart, opened the first Wal-Mart store in Rogers, Arkansas in 1962. The company is publicly traded at the New York Stock Exchange under the symbol WMT and has its headquarters in Bentonville, Arkansas.

Wal-Mart operates as an aggregator, distributor, and retailer of consumer goods. It organizes its business into three principal segments: Wal-Mart Stores, Sam's Club and International. The Wal-Mart Stores segment is the largest segment of Wal-Mart's business, accounting for 67.3% sales during the fiscal year ended January 31, 2005 (fiscal 2005). The segment consists of three different retail formats, all of which operate in the United States. The Company's SAM'S CLUB segment consists of membership warehouse clubs that operate in the United States, and accounts for 13% of fiscal 2005 sales. In addition, the Company owns an unconsolidated minority interest of approximately 37% of The Seiyu, Ltd., a retailer in Japan.

WalMart- A flexible organization
A flexible business form: a flat and flexible organization that promotes innovative ideas; easy to join, easy to resign; also possible to expel a member. Thus the organization's focus is on adapting and changing in response to the external environment. A flexible organization has the capability to change in response to the environment
http://www.idealist.org/media/en/hrp/docsmedia/AssessingimpactHR.pdf.

Thus in this type of organizations layers of management are not existent and the team members are held responsible for results. Decisions need to be made in accordance with business objective. For example where the objective is making customer satisfaction, decisions need to be made to attain customer satisfaction. This helps in greater responsiveness to the needs of the market. There is greater flexibility so important for global business to be successful. The multi-task multi-functional role of team members is so important in the global marketplace. Innovation is facilitated by flexible organizations. It also increases productivity.

The Case of Wal-Mart
Wal-Mart's business practices emphasize productivity, efficiency and computerization. Wal-Mart's operating costs are lower than those of its competitors. Each Wal-Mart store has an employee, often an older person, ...

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