Essay on Wal-Mart International Division

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The International Division at Wal-Mart International Business: Strategy & Structure October 10th, 2012 Introduction I would like to begin stating the reason why I decided to choose this case and, above all, this topic. Since the beginning of my academic career field I’ve always found more interesting the “human” side of business sciences, especially those concerning the behavior of organizations in the environment in which they operate and consequentially of the people that materially make them work. This because organizations are “living structures” created by men in order to reduce the uncertainty typical of every “open system” like the real world, as opposed to what scholars call “closed system” to indicate an environment where…show more content…
Summary The International Division was born in the early 1990s with Wal-Mart’s international expansion and today counts three departments (Europe, Asia, Americas). Each one is coordinated by a CEO who reports to the CEO of the International Division, who eventually reports to the CEO of Wal-Mart. Wal-Mart’s initial purpose was to export the format that has been so successful in the United States in terms of stores, operations and merchandising, that’s why the division was structured with a strong centralized control. However by the end of the 1990s Wal-Mart’s management noticed that this organizational choice caused slow decision-making and information overload and above all that local conditions couldn’t be ignored. Britain’s ASDA supermarket chain’s acquisition triggered the change: country manages no longer needed the approval from the company’s headquarter in Arkansas especially for decisions regarding operations and merchandising. Despite leaving most of the responsibility for procurement at a regional level, today the company is striving to find a balance between a centralized procurement to boost its huge purchasing power and a flexible product mix that could fit each local market. After the decentralization process, the International Division has gained a new central role in the company’s strategy: identifying best practices and moving them across countries.

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