Wal-Marts World

Just how does Wal-Mart, the worlds largest retailer, maintain its corporate culture across
all of its 4,000 stores? How does this giant promote and preserve its image as a small-town
store where the customer is king? Part of the answer lies in Wal-Marts legendary Saturday
Morning Meeting.
The Saturday Meeting started with Wal-Mart founder Sam Walton, who thought it unfair
that he could take off on weekends while his employees worked. So, in 1962, Sam Walton
began arriving at his store, Waltons Five & Dime, in Bentonville, Arkansas, each Saturday
between two and three in the morning. There, he would scrutinize the previous weeks
records to determine which merchandise was selling and which was not, as well as how
sales were faring. When his stores associates arrived, he would hold a quick morning
meeting to openly share the stores information with them. He would also ask for their
opinions on matters such as what items he should put on sale and how he should display
certain products. Such meetings served not only to use the stores employees in multiple
ways but also to convey to his employees that he valued their input and wanted them to learn
the business.
Even as Wal-Mart grew into a multibillion-dollar company, the Saturday Morning Meeting
continued. Each Saturday morning, some 600 managers, pack the 400-seat auditorium,
waiting for their fearless leader to arrive. First, it was Sam Walton. Then, it was CEO David
Glass. Now, at 7:00 A.M., current CEO Lee Scott heads the meeting.
Though Saturday Morning Meeting topics typically include the companys financial
performance, merchandising and areas of improvement, the meeting is, above all else, a
means to keep the company and its employees as close-knit as possible. Such solidarity is
imperative to Wal-Marts strategy of quick market response. When new ideas or problems
surface, managers are comfortable sharing them with others. Decisions are made quickly,
and action is taken.
For example, while discussing merchandising mistakes during a meeting, Paul Busby,
regional vice president for Northeastern United States, was concerned about a particular toy
that Wal-Mart was not carrying but its competitor Kmart was selling for . $9.99. We should
really have this product because its a much better value than ours.
In response to Busbys concern, Scott McCall, the divisional merchandise manager for
toys, replied, Ill check with our sources and get back to you.
A mere 10 minutes passed
before McCall asked for the microphone and stated, Paul, I just wanted you to know that
Ive arranged for those Kmart poker sets to be acquired and be available to all the stores next
week. Examples such this illustrate the trust that Sam Walton had in his staff to make
decisions. Instead of going through layers of red tape, Wal-Marts managers can have their
ideas implemented quickly. Of course, not all decisions are beneficial; however, those that
are can result in immediate gains.
Such quick responses are difficult, if not impossible, for other large companies to execute.
As former CEO David Glass explains, The Saturday morning meeting was always a decision
making meeting to take corrective action, and the rule of thumb was that by Saturday noon
we wanted all the corrections made in the stores. Glass further explains that since no other
companies could even come close to the speed at which Wal-Mart executes strategy and
change, Wal-Mart developed and sustains a competitive advantage. Wal-Marts vast

distribution network and purchasing power allow it to move products efficiently and sell them
at a low price.
In fact, the Saturday morning meeting is not the only meeting Wal-Mart uses to maintain
company culture. On Friday there is a merchandising meeting, where regional vice
presidents get together to discuss what products are selling well. And not all meetings are
for managers. Consistent with Sam Waltons emphasis on employee involvement, every
Wal-Mart store has a fifteen minute shift change meeting three times a day. During these
meetings, managers go over the stores performance numbers as well as ask their
associates whether they have specific ideas that might improve sales. Managers send what
they think are good ideas up to the regional vice president, who then proposes the ideas at
the Saturday morning meeting. The Wal-Mart greeter was one such idea, which a rank and
file employee suggested. The greeter helped to put a friendly face on what might be viewed
as a large, impersonal organization. Such structure helps to ensure that Wal-Marts upper
managers, who often times are responsible for 100 or more stores, keep in touch with the
daily happenings of their business.
One other aspect of Wal-Marts culture is its frugality, a characteristic of Sam Walton that
has endured even through Wal-Marts tremendous growth and financial success. Walton
began his strict focus on keeping costs low early on to gain an advantage over competitors
such as Sears and Kmart. Walton was known to make executives sleep eight to a room on
company trips. He himself drove a modest old pickup truck and flew coach whenever he
traveled. Amazingly, these characteristics have remained ingrained in Wal-Marts culture.
Perhaps the biggest obstacle to Wal-Mart is the increased public scrutiny that comes with
being the worlds largest company. In the past, the company had more tolerance for
employee mistakes. It would strongly reprimand an employee who made an offhand sexist
remark, for example, but if the employee altered his or her behavior, then the company let the
employee stay. Today, however, Wal-Mart adheres to a stricter policy. As Mr. Scott explains,
Wal-Mart is, Not mean but less kind. Today when you find somebody doing something
wrong, you not only have to let them go, you have to document it so it is covered and people
understand. That is a bit of a culture change. Its a company that operates in a different
context than when Sam Walton was alive and when David Glass ran the company.
Management cannot allow extraneous issues to bleed over. My role has to be besides
focusing on driving sales, to eliminate the constant barrage of negatives that causes people
to wonder if Wal-Mart will be allowed to grow.
Indeed, Wal-Mart frequently finds itself in the news, though lately in stories that paint the
company in a negative light. Controversies over Wal-Marts anti-union position, its hiring and
promotion practices (such as outsourcing the cleaning of its stores to illegal immigrants and
working them seven days a week), and its treatment of employees (including accusations of
discrimination and underpayment of employees) all make it increasingly difficult for Wal-Mart
to maintain the image of a friendly, affordable retailer that Sam Walton had in mind when he
founded the company. On this topic Scott says, Over the last couple of years, I have been
spending much of the time talking about all negative publicity we have been getting, not from
the stand-point that we hate the press, but by asking our people what we are doing that
allows people to perpetuate these kinds of negative discussions about Wal-Mart.
If Wal-Mart is to enjoy continued success, it will have to find solutions to the above
problems and the negative publicity those results. Perhaps the company should go back to
its Walton roots? Or maybe it should alter its culture and market position to match its growth.
For a company that has over 4000 stores operating in the United States, Mexico, Canada,
South America, Korea, China and Europe; 1.5 million employees; and over 100,000 different
products for sale, sustaining or changing the companys culture is a tremendous challenge.
Thus far, however Wal-Mart appears to be handling the challenge well.