Control Mechanisms Of Wal Mart Essay

1516 words - 6 pages

Control Mechanisms of Wal-Mart PAGE \* MERGEFORMAT 3
Control Mechanisms of Wal-MartWithout the effectiveness of control, the successes of most companies would be easily faltered. Wal-Mart, being one of the World's largest retail chains, has established itself as a global leader, and not without having a defined plan of action. Through varying efforts and countless control regulation, this retail giant has secured itself within the industry. Throughout this paper, an address will be made to the control mechanisms that Wal-Mart uses within its normal business practices. In addition, a reflection will be made on how the control functions are utilized and what measures are taken to monitor such measures within management.Control mechanisms are the functions which help maintain the processes of companies to reach their goals. Wal-Mart is a large corporation whose goals include making the products that people need available, at lower prices. The controls which are implemented at Wal-Mart are various but are strictly enforced. Wal-Mart typically uses market control; placing a monetary value upon its products. Wal-Mart also uses clan control by receiving input from its employees to achieve better promotions for the public. These controls are important to prosper efficiently in the business world; they also increase customer and employee satisfaction.Wal-Mart's success is motivated by control mechanisms that are regulated and constantly evaluated. Four examples of these control mechanisms at Wal-Mart are scale in purchasing, a cost advantage, a strong position in the value network, and minimal employee benefits. Each of these four mechanisms has put Wal-Mart in the forefront of retail giants. Scale in purchasing concerns the large volume of items bought. Because of this large volume Wal-Mart is able to purchase at a lower price and pass that savings on to the customer. That brings one to the second function mechanism, cost advantage. Because Wal-Mart has lower prices there is an advantage that customers gain by shopping there. This leads to a strong position in the value network.The fourth mechanism that Wal-Mart uses has been widely speculated upon. According to Walmartwatch.com, even though Wal-Mart has more than 680,000 associates in 14 countries outside the continental U.S. a great percentage of employees within the U.S. are uninsured and more employees are relying on state aid. Wal-Mart said 43,000 of its workers receive health coverage through a state assistance program. So, not only does Wal-Mart fail to insure 644,000 of its workers, a whopping 182,000 are left completely uninsured while another 43,000 must rely on Medicaid and other state run programs. (Media team/Walmartwatch.com., 2010) This leads to a great surplus in funding for the Wal-Mart buying processes and gives them a great advantage in supplying its customers with lower pricing.Comparison and Contrast of Control MechanismsOf the control mechanism to have been defined, one might come...

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