Walmart's Bureaucratic Structure

Walmart a name known globally they are a true empire. They are known as one of the largest company in the world. Sam Walton founded Walmart opening the first store in 1952 and Arkansas since then in has grown. According to Snyder Walmart is located in over 27 counties they have over a 11,000 stores and over two million employees. Walmart stands by the mission statement “We save people money so they can live better.” Walmart is known for is super low prices, and they compete with anyone who tries to enter their market. Walmart has a very formal and bureaucratic structure. There is a very clear hierarchy and commands come from the top and flows to the bottom. Although Walmart is so successful they have received lots of backlash due to some

This article talks about Walmart’s plan to get rid of The zone management positions. Walmart’s goal is to limit bureaucracy and put the power back into the hands of people in charge of Walmart (ex. CEO). Walmart has a hierarchal bureaucracy, there are different levels of leadership/power you can kind of see that being played out in the article. Walmart uses rational-legal authority, according to the text “rational-legal authority rest on a belief in the legality of patterns of normative rules and the right of those elevated to authority under such rules to issue commands.” (Scott & Davis, 2007, pg.47) Walmart function most like the hierarchal system because power comes directly from the head which in this case happens to be Walmart’s CEO. For example, in this article Walmart explains that their goal in ridding of the management position “is meant to reduce bureaucracy and put more power in the hands of people running Wal-Mart’s 4,500 U.S. stores.” (Dudley, and Townsend, 2015) Walmart wants to reduce some of the levels in their hierarchy in order to give the leaders at the the top more

Transaction cost refers to the cost of going through the market to provide a certain good/service compared to having it provided within the firm. “Transaction cost, then, are the costs of contracting, taken broadly. They include the costs of planning, adapting, and monitoring task completion and are the economic equivalent of friction in physical systems.” (Scott & Davis, 2007, pg. 225) We see this in the article that I mentioned above. There is a cost to everything and the cost of Walmart outsourcing for resources has a negative affect on the economy, businesses, and employment. According to the article, “These outsourced workers laboring on Walmart behalf toil at the bottom of a complex hierarchy of intermediaries and in alternative employment schemes that leave them vulnerable to significant worker rights abuses and unsure where to seek redness." (Jamieson, 2012) Walmart begin outsourcing for laborers so that they could pay low wages and keep their cost down low the cost unfortunately happens to fall back on American