Walmart's Success Driven by Control Mechanisms

1194 Words Apr 15th, 2008 5 Pages
Control mechanisms are used by organizations to help standardize processes which contribute to overall company goals. Wal-Mart is a large business working to meet the needs of its customers, employees and suppliers by incorporating controls; controls consists of market control, clan control, manager audits, and performance standards. Each control is significant to effectively thrive in the business world; additionally, increasing customer, employee and supplier confidence. The effectiveness of each control impacts the function management; organizing, planning, controlling and leading. What are the positive and negative aspects of each control? Wal-Mart's success is driven by control mechanisms that are standardized and consistently …show more content…
Internal and external audits are valuable to be audit compliant. Internal audits evaluate the performance within the organization by incorporating the functions of management; however, external audits involve external vendors performing an evaluation (Bateman & Snell, 2007). The majority of auditing conducted by Wal-Mart is handled internally by vigorously participating in its private-label auditing (Audits Play Crucial Role in Safety, 2008).

Wal-Mart has established an audit committee, which is responsible to maintain internal controls by overseeing financial statements for the entire organization (Audit Committee Report, 2003). Additionally, similar controls are implemented to capture internal supplying issues and with technology auditors can determine issues in a matter of hours. Currently, Wal-Mart has not implemented external controls by conducting external audit. Therefore, internal auditing is the only type of manager audits conducted by Wal-Mart. Creating an effective internal auditing system by using quality assurance methodology minimizes risk for each store location. Minimizing risk at each location contributes to successfully meeting audit standards. Finally, internal auditing provides helps Wal-Mart implement all four functions of management.

Performance StandardsThe first steps in establishing controls are to create performance standards. After years of experience, Wal-Mart has become an expert at

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