Module 2: Applying Organizational Design to a Case

Master of Business Administration, Nexford University

BUS6110 Organizational Strategy

Dr. Michael Simms

December 6th, 2023

Organizational Structure and Characteristics of Walmart

Organizational design, or redesign, is about ensuring that the form and framework of an

organization align with its strategic goals. This process includes evaluating the organization's

desires and requirements, identifying the disparity between its current state and its desired future,

and developing organizational practices that effectively close this gap (CIPD, 2023). In the face

of unparalleled changes in the retail sector, propelled by technological progress, a corporation

such as Walmart Inc. is consistently exploring new and inventive strategies to sustain its

competitive advantage. According to Jessica (2023), Walmart operates under a hierarchical

functional organizational structure. This structure is characterized by two key elements:

hierarchy, which refers to the vertical chain of command and authority, and function-based

grouping, where employees are organized into specific functional areas (like departments for

human resource management, information technology, and marketing). This structure enables

corporate managers at Walmart to effectively guide and influence the organization. However, it

presents limitations in terms of organizational agility, as it hinders the ability of lower-level

employees to swiftly modify business practices, primarily due to extensive communication

channels and protracted approval processes.

Strategies or Model Used for Recommendations

The Star Model of Organizational Design is a framework that helps in guiding decision-making

and behavior within an organization. It is a popular model in organizational design due to its

strategic approach that effectively connects competitive advantage to strategy, and then to

structure, people, lateral processes, and reward mechanisms (MBA Knowledge Base, n.d.). The

Star Model, developed by Jay Galbraith, guides the organizational redesign at Walmart, focusing

on strategy, structure, processes, rewards, and people. This framework steers the strategy towards

embracing digital transformation in retail, reshaping the organizational structure for greater
adaptability, and refining processes through enhanced digital literacy and data analytics. The

rewards system aligns with this strategy, emphasizing flexible work arrangements and incentives

for continuous learning. The people dimension focuses on building a workforce skilled in

navigating a technology-rich environment. Overall, the Star Model ensures an integrated

approach to Walmart's organizational redesign, aligning every aspect with the challenges and

opportunities of technological advancements. Walmart has initiated investments in advanced

technologies like artificial intelligence and machine learning to enhance its supply chain

management. These technologies provide Walmart with a deeper, more precise understanding of

its supply chain dynamics, allowing for real-time monitoring of order progress, identification of

potential delays or bottlenecks, and facilitating proactive corrective measures. This technological

integration empowers Walmart to make more informed decisions in managing its operations

effectively (DataHawk, 2022). Walmart would benefit from implementing strategies that reward

tech-savvy employees, foster an environment conducive to innovation and experimentation, and

focus on the training and development of its workforce.

Recommendations for Organizational Redesign Due to New Technology Advancement

 Walmart should focus on integrating digital technologies across all business operations.

This involves forming agile, cross-functional teams that are dedicated to digital

innovation. These teams would work on developing and implementing digital solutions

that improve customer experience, streamline operations, and keep Walmart at the

forefront of retail technology. A key advantage of cross-functional collaboration is the

capacity to expedite go-to-market strategies by pooling efforts and resources (Starmind,

2022).
  The organization needs a leadership structure that is agile and responsive to the fast-

paced changes brought about by digital advancements. This involves training current

leaders and nurturing new ones to lead in a digitally driven environment, emphasizing

skills like adaptability, digital literacy, and a forward-thinking mindset. According to

Cascade Team (2023), Cross-functional teams are notable for their agility and

adaptability.

 In the era of digital transformation, flexible work arrangements are becoming

increasingly important. Walmart should leverage remote working technologies to offer

more flexible working options. This not only caters to the changing preferences of the

workforce but also allows the company to tap into a broader talent pool.

 To keep pace with technological advancements, all employees must be digitally literate.

Walmart should invest in comprehensive training programs that upskill employees in

areas such as digital tools, data analytics, and e-commerce. This ensures that the entire

workforce can contribute effectively in a tech-driven environment. It is beneficial for

organizations to allocate resources towards training programs that bolster the skills and

expertise of their team members, with a focus on areas directly relevant to current

projects (Great Place To Work, 2023).

 Embracing a data-driven culture is key in the digital age. Walmart should integrate

advanced data analytics tools into its decision-making processes at all levels. This enables

the company to make more informed decisions, understand customer needs better, and

identify new market opportunities more quickly.

In conclusion, the proposed recommendations for Walmart's organizational redesign, grounded in

the Star Model framework, are aimed at navigating, and leveraging the opportunities presented
by technological advancements. By enhancing digital integration, developing a responsive

leadership framework, expanding flexible work arrangements, investing in employee digital

training, and strengthening data-driven decision-making, Walmart can effectively adapt to the

dynamic retail landscape. These strategic changes are not only vital for staying ahead in a

technology-driven market but also essential for fostering a culture of innovation and agility

within the organization. Implementing these recommendations will position Walmart to better

meet the evolving needs of its customers and maintain its status as a leader in the global retail

sector. Through its investment in cutting-edge technologies, the establishment of robust

partnerships, and a commitment to sustainability, Walmart is strategically positioning itself to

maintain its leadership role in the retail and supply chain management sectors (DataHawk,

2022).
 References

CIPD, (2023, February 14). Organisation design. Retrieved from

https://www.cipd.org/en/knowledge/factsheets/organisational-development-design-

factsheet/

Jessica, L. (2023, July 22). Walmart’s Organizational Structure & Company Culture. Retrieved

from https://panmore.com/walmart-organizational-structure-organizational-culture

MBA Knowledge Base, (n.d.). Jay Galbraith’s Star Model of Organizational Design.

Retrieved from https://www.mbaknol.com/strategic-management/jay-galbraiths-star-

model-of-organizational-design/

DataHawk, (2022, December 7). Walmart Supply Chain Challenges and Solutions. Retrieved

from https://datahawk.co/blog/walmart-supply-chain-solutions

Starmind, (2022, September 15). How to Encourage Cross-Functional Collaboration Across the

Enterprise. Retrieved from https://www.starmind.ai/resources/cross-functional-

collaboration

Cascade Team (2023, September 26). Cross-Functional Collaboration Overview + Examples.

Retrieved from https://www.cascade.app/blog/cross-functional-teams-drive-innovation

Great Place To Work, (2023, September 19). Building a Collaborative Team: How to Encourage
Cross-functional Cooperation and Improve Results. Retrieved from

https://greatplacetowork.co.id/resource/building-a-collaborative-team-how-to-encourage-

cross-functional-cooperation-and-improve-results/