LEADERSHIP- THE SAM WALTON’S WAY

Outstanding leaders go out of their way to boost the self-esteem of their personnel. If people
believe in themselves, it's amazing what they can accomplish.
Sam Walton

Sam Walton was the founder of two American retailers, Wal-Mart and Sam's Club. He was
the patriarch of the Walton family, one of the richest families in the world.

Sam Walton was born on 29th March 1918 near Kingfisher, Oklahoma to Thomas and Nancy
Walton. During high school Walton was very athletic playing basketball and football as
starting quarterback for Columbia’s Hickman High School. After graduation Walton started
as a management trainee at JC Penney in Des Moines, Iowa which. In anticipation of joining
the military for service in World War II he quit his job and worked at a DuPont munitions
plant in Oklahoma.

Walton joined the military in the US Army Intelligence Corps, where he supervised security
at aircraft plants and prisoner of war camps, eventually reaching the rank of captain. In the
year 1945 he left the military with the ambition of opening a department store, and so with
the help from his father in law and his own savings Walton bought a Ben Franklin variety
store from the Butler Brothers franchise in Newport, Arkansas.

From this beginning Sam Walton pioneered some concepts that are still used today to make
his business a success including a wide variety of low priced goods, keeping his store open
longer than most other stores and buying goods in large quantities from the lowest priced
wholesaler to pass on savings to customers. With cheap prices came large sales volume
which allowed him to purchase even cheaper wholesale goods from his suppliers, leading to
his store to be the most profitable franchise store in the whole six state region.

Sam’s leadership style was popular amongst his employees and he founded some of the basic
concepts that are still in use today. He believed that ‘individuals don’t win, teams do’ Sam
encouraged commitment in his employees by introducing stock options and store discounts. 
He also believed in community spirit and felt that each store should reflect his customer’s
values and support the vision they held for their community.

In November 1999, Sam Walton, the founder of Wal-Mart, the global retailing giant based in
US, was ranked among the top ten 'entrepreneurs of the 20th century' by the Wall Street
Journal (WSJ). WSJ placed Walton ninth in their list titled "Top Ten Who Changed the
World for Entrepreneurs." Walton also found a place among the WSJ's top ten list of "The
Minds That Transformed Entrepreneurship in the 20th Century." He received many
prestigious awards for revolutionizing the global retailing industry by creating very large
stores that offered goods at economical prices.
Sam followed what he called his ‘Ten Commandments of Business’;
Rule # 1 COMMIT to achieving success and always be passionate
Rule #2 SHARE your success with those who have helped you
Rule #3 MOTIVATE yourself and others to achieve your dreams
Rule #4 COMMUNICATE with people and show you care
Rule #5 APPRECIATE and recognize people for their effort and results
Rule #6 CELEBRATE your own and other's accomplishments
Rule #7 LISTEN to others and learn from their ideas
Rule #8 EXCEED EXPECTATIONS of customers and others
Rule #9 CONTROL EXPENSES and save your way to prosperity
Rule #10 SWIM UPSTREAM, be different, and challenge the status quo

Even though Sam Walton was a good manager, his real strength was to lead people
effectively. Walton was so committed to his business and so hard-working that he affected
most of his staff with his enthusiasm. It was not only this but also his ability to create
commitment for his associates, using “reward power” by showing his appreciation of and
rewarding people’s efforts. Sam Walton emphasised the importance of team-work. He
encouraged people to help each other where they can, as often as possible, as long it is for the
benefit of their personality or of the company.

One of the more recent ideas about leadership analysis was the “transformational leadership”
approach, describing how the behaviour of one person is influenced by the leader’s
personality. It states that by combining the factors like leader’s charisma, his motivation
skills, intellectual challenge for the associates and consideration for the individual will create
a work atmosphere that enables outstanding results. Sam Walton definitely was such a leader,
having those outstanding skills allowed him to “transform” his associates in the way required.
He always gave his partners high goals, but motivated them and gave them the feeling that
they really count for him, and therefore his staff were much more willing to work hard.

Walton always believed in the importance of staying involved and controlling the daily
business, and therefore initiated several traditions, as it was for example the introduction of
the so-called “Saturday-morning-meetings”, a meeting where all executives come together
once a week to discuss all problems arising in their departments.

Sam Walton’s managerial approaches and the Wal-Mart corporate culture created by him are
still key points in the company’s ongoing success. Regarding all of Sam Walton’s
management and leadership one really has to say that he was a successful leader and
motivator. Sam Walton is surely an example of a leader that was born. He led people before
he has ever had the chance to learn about leading. So Sam’s natural leadership skills and the
“high follower readiness” were another key to Wal-Mart’s success.
 Submitted to

Prof Libby Simon

Prepared by:

Kaushik Ranjan Kashyap (25)

Manas Tiwari (28)

(PGDM –IB 2009-11)