Social Networking: Using Social Media and Networking to Address Productivity Issues
Using Social Media and Networking to Address Productivity Issues: Social Networking
Walmart is the world’s largest retailer, and the world’s largest company by revenues. Its success over the years draws largely from its mission of providing everyday low prices to enable consumer live better. Despite its inherent success, however, Walmart faces serious problems in regard to unfair labor practices and customer satisfaction in product offerings. This text demonstrates how social media and social networking technologies could be used to address these problems.
Using Social Media and Networking to Address Productivity Issues: A Case Study of Walmart
Walmart is the world’s largest retailer, and the largest company by revenues. Starting off with Sam Walton’s idea of offering everyday low prices in the 1960s, the company grew to become one of the world’s most valuable brands, operating in over 27 countries, and employing over 2 million employees globally. Despite its inherent success, Walmart is not without its share of problems, most of which have to do with employee welfare, customer dissatisfaction, and cultural influences when venturing into new markets. This text expounds on Walmart’s core problems, and identifies how social media and networking could be used to address the same and increase overall productivity.
Section 1: The Problem
Workers’ Rights and Employee Relations
Recent years have seen Walmart come under serious criticism from labor unions and civil rights organizations for its large number of violations regarding work hours and wages for its associates. In 2003, Walmart’s associates reportedly made $8.23 an hour, which amounts roughly to $13,000 a year, almost $1,000 below the federally –accepted poverty line for a family of three. The company has since increased the hourly wage for its associates, especially those working in urban areas (Ferrell, Fraedrich & Ferrell, 2009). Despite the increased wages, however, the company still faces an increasingly large number of lawsuits regarding managers tapering with employees’ wage and time records, and forcing them to skip lunch and short breaks and to work off the clock (Brunn, 2006). Brunn (2006) provide the example of a Walmart associate in a Florida store, who on raising concern with her supervisor about missing lunch breaks, was told that if she could not get the job done, the company could find someone who could.
By 2008, Walmart was facing over 80 different lawsuits involving such labor-related issues (Ferrell et al., 2009). In one instance, the company had to pay $50 million in settlement costs to 69,000 associates who had brought suit against it in Colorado (Ferrell et al., 2009). In another instance, it was forced to award pay back to 83 employees who had been forced to work off the clock in Oregon.
Besides issues of unethical employee treatment, Walmart also faces serious criticism in regard to its compensation and reward practices (Ferrell et al., 2009). Women account for over 67% of all Walmart associates; yet they make up less than 10% of the company’s top management (Ferrell et al., 2009). An internal study by a Walmart executive in 2001 showed that most employees, particularly female ones, are dissatisfied with the company’s compensation and appraisal system (Ferrell et al., 2009).
Unions are another issue that continues to taint Walmart’s reputation domestically and internationally (Ferrell et al., 2009). Currently, Germany is the only country where Walmart associates are unionized (Ferrell et al., 2009). The company has reportedly spent a considerable amount of resources and time on ensuring that its employees in the U.S. and around fifteen other nations in which it operates do not unionize (Ferrell et al., 2009). In one store in Colorado, employees demonstrated an intention to unionize — in response, the company found ways to brainwash and intimidate the pro-union associates to ensure that they did not become unionized (Ferrell et al., 2009). The company’s pro-union stand has always been based on the argument that union demands would prevent it from becoming profitable.
Truth, however, is that incidences such as these harm the company’s reputation, and cast doubt on its commitment to the core belief of ‘respect for the individual’. Negative coverage affects the company’s profitability and the perceptions of the consumer public.
Disconnect between what the Company Offers and what Customers Need
The ‘Everyday Low Prices’ slogan, upon which Walmart’s operations are based, is one of the company’s greatest success elements (Gandolfi & Stratch, 2009). Despite the company’s unprecedented success over the years, there have been a number of market withdrawals from some key foreign markets (Gandolfi & Stratch, 2009). The most publicized of these include the pull-out from Germany, China, and South Korea in 2006 (Gandolfi & Stratch, 2009).
In South Korea, the company closed down operations after eight years in business, and sold its 16 outlets to local retailer, Shinsegae (Gandolfi & Stratch, 2009). Studies suggest that South Koreans believe that Walmart’s failure was primarily due to the company’s inability to understand local customers’ shopping preferences and adjust its business model accordingly (Gandolfi & Stratch, 2009).
The disconnect between Walmart’s business model/product offerings, and customer preferences in South Korea is evident from a number of aspects. The first of this is distribution mechanism — as is the case in the U.S., most Walmart outlets in South Korea were located outside, as opposed to inside the cities (Gandolfi & Stratch, 2009). Unlike their American counterparts, however, South Koreans shop frequently, and will often not purchase things at once to avoid making repeat trips to the store (Gandolfi & Stratch, 2009). The location of Walmart stores outside the cities affected South Korean customers’ shopping needs (Gandolfi & Stratch, 2009). Moreover, South Koreans are known to be deeply involved in local markets; as such, they expected to see local products presented in a localized fashion in Walmart stores (Gandolfi & Stratch, 2009). They expected eye-catching, aesthetically-pleasing displays, yet Walmart provided the western-like box encounter that it uses in the U.S. and Europe (Gandolfi & Stratch, 2009).
The second disconnect arose from the company’s product mix. South Koreans’ customer preferences differ significantly from those of their American counterparts (Gandolfi & Stratch, 2009). For this reason, Walmart’s pursuit of market strategies that focus on providing dry goods, clothing, and electronics, failed to resonate with the South Korean customer, who mostly prefers fresh foods (Gandolfi & Stratch, 2009). South Korean shoppers shunned from shopping in Walmart stores because they felt that the company had only brought over its western company culture and sales tactics (Gandolfi & Stratch, 2009).
Walmart failed in South Korea because it lacked the ability to understand local consumers’ preferences and adjust their business models to meet these preferences and expectations. Its withdrawal from other markets such as China and Germany was occasioned by the very same reason. Withdrawals such as these count as failures in the company’s records, and will often cause it to incur huge losses (Gandolfi & Stratch, 2009).
The two problems identified in this section significantly hurt Walmart’s profitability and overall competitiveness. The company needs to devise effective solutions to the same if it is to remain a going concern. The next section explores how social media and social networking technologies could be used to address the identified problems.
Section 2: Solutions to Problems
Addressing the Problem of Employee Relations
Hertzberg’s two-factor theory of motivation, also known as the motivation-hygiene theory, postulates that employee satisfaction and consequently, productivity at the workplace is influenced by two types of factors: motivator factors and hygiene factors (Schermerhon Jr., 2010). Motivator factors are those factors that increase employee satisfaction and motivate them to work harder (Schermerhon Jr., 2010). They include career progression, enjoying one’s work, and feeling recognized (Schermerhon Jr., 2010). The hygiene factors are those factors that lead to dissatisfaction and lack of motivation if absent (Schermerhon Jr., 2010). These include salary, healthy relationships with managers and coworkers, benefits, and company policies.
According to the theory, the two factors work independently of each other. Whereas motivator factors increase satisfaction and motivation, their absence does not necessarily cause dissatisfaction (Schermerhon Jr., 2010). Likewise, although hygiene factors may not necessarily increase motivation and satisfaction, their absence causes an increase in dissatisfaction (Schermerhon Jr., 2010).
At the workplace, having the most productive workforce requires one to improve both motivator and hygiene factors. Social media technologies could be used to achieve this and increase the overall engagement of employees in Walmart stores. The organization could motivate employees by increasing their voice through social media tools such as blogs. Employee blogs provide ample platforms for employees to present their views, exchange ideas, advance conversations, and promote their learning and successes. Employees can give their views on what they think the company’s reward or compensation systems ought to entail to be more effective, and what they would love to see the organization do to make them feel appreciated and supported. Other employees could comment on the bloggers’ posts, adding their voices to the conversation. The company’s managers could use the information available in these blogs to make business decisions regarding employee rewards and also design reward/compensation systems that align with the needs and expectations of employees. This will not only make employees feel appreciated, but will also alleviate the dissatisfaction problem associated with ineffective compensation and reward systems.
One company that has been able to make effective use of blogs in motivating its employees is IBM Ltd., which has nearly 400,000 employees and around 17,000 employee blogs covering a variety of topics from working parenthood to innovation management and service-oriented architecture (Haneberg, 2012).
In-house wikis are another tool that the organization could use to obtain a feel of employees’ needs and expectations from the organization (Haneberg, 2012). Wikis not only allow employees to share their ideas with management and coworkers, but also help to build healthy and positive relations among employees as they allow anyone at the company to annotate or edit the page with their suggestions (Keyes, 2013). Employees’ contributions are invited, regardless of the employees’ status or level within the organization (Haneberg, 2012). No single role holder can take control of the content or dynamics of a discussion (Haneberg, 2012). Contributions are welcome, regardless of job title. This places managers and employees on level ground and nurtures healthy working relationships between top-level management and bottom-level associates.
Intrawest Placemaking is one organization that has made effective use of wikis in building positive relations between managers and employees (Haneberg, 2012). The company uses a wiki to capture its real estate development process and encourage collaboration among its 250 employees spread across two continents (Haneberg, 2012). On more than 500 pages, any employee can provide their ideas and contribute their expertise to the overall shared knowledge (Haneberg, 2012).
Intranets and discussion groups could also be helpful in strengthening the relationship between the organization and its associates (Haneberg, 2012). Through these platforms, individuals can tell stories or deconstruct activities to understand why the organization does what it does (Haneberg, 2012). They can also share on what they would love to see the organization do differently (Haneberg, 2012). The company’s human resource manager could post information on why the company refuses to unionize its associates. Discussions could then be held to make employees’ understand the organization’s point-of-view, and to also devise ways of ensuring that employee welfare is maintained even in the absence of union activity (Haneberg, 2012). This way, employees and the organization would be able to reach a common agreement, and the subject of unionization would no longer be a source of negative publicity.
These strategies would help eliminate the disconnect between the organization and its employees. Moreover, it would increase the organization’s profitability by reducing incidences of negative publicity. However, the use of the same would come at a cost to the organization. The greatest cost is that employees could begin using work hours to create and contribute to blog activity, or take part in online discussions. To prevent this, the organization could come up with strict guidelines to govern the conduction of online activities during work hours. Moreover, they could develop guidelines on how to maintain ethics and integrity in such online platforms — this would help to ensure that everyone conducts themselves ethically, and relationships among employees are not destroyed.
Addressing the Problem of Customer Needs
Adler’s model of managing cultural diversity suggests that there are three ways through which an organization faced with the problem of diversity could react: the parochial way, the ethnocentric way, and the synergistic way (Adler & Gundersen, 2008). In the parochial approach, the organization simply ignores the differences in culture and assumes that any problems that occur are not due to the cultural differences thereof (Adler & Gundersen, 2008). This is the approach used by Walmart when venturing into foreign markets — the organization simply ignores the cultural differences between communities, and carries the western way of doing things over to the new environment.
In the ethnocentric approach, the organization recognizes the differences in culture (though not as positively) and does only very little to manage the same (Adler & Gundersen, 2008). The organization regards its own culture as superior to those of others, and does not take comprehensive action to address the same (Adler & Gundersen, 2008). Instead, it tries to make the new culture fit into the dominant culture’s way of doing things.
The final approach is the synergistic approach, where the organization recognizes the possible effect of the differences in culture and adjusts itself accordingly to address the same (Adler & Gundersen, 2008). Adler and Gundersen (2008) posit that this approach helps an organization realize the greatest benefits from cultural diversity.
Implementing the synergistic approach begins with understanding the differences between the potential market’s culture, and that of the dominant market. In the case of Walmart, this involves acquainting oneself with details about the culture of the prospective market, and identifying how the same differs from western culture. Social media platforms such as Facebook and Twitter provide ample platforms for the organization to interact with customers in a potential market, and obtaining a feel of their cultures before venturing into the market. A good strategy is to adapt social media to reflect the language of the market being eyed. This will help to increase user engagement, and will allow for better collaboration between the organization and users from the potential market. Moreover, it will eliminate the ideology that the organization values their own language more than that of the foreign market.
An organization that has been able to use Facebook, and its personal blog to increase engagement of users in foreign markets is Dell Inc. The organization creates multiple regional pages on both social networking sites, and its corporate blog, allowing users from different geographical regions to communicate in their own languages. This eliminates the ideology that the organization values English above other languages, and places the organization in a better position to engage more, and obtain more information on what customers in a particular market or geographical location would wish to see the organization offer. This helps the organization design its products and business models in such a way that they respond to the unique needs of customers from different cultures.
Walmart could adopt the same strategy using its social media networks and corporate blogs as a way of ensuring that it adequately understands the cultural differences among communities, and adjusts its business model to reflect the specific needs of locals in foreign markets. This way, incidences of withdrawal from foreign markets, and the associated losses will be minimized.
The main problem associated with this strategy is the development of standard guidelines governing social media conduct in different geographical regions. Just as cultures differ, so do people’s ways of life in different geographical regions. A rule or social media policy that may work well in the United States may not necessarily be taken lightly by Asian users. As such, a one-fits-all set of social media guidelines or policies may not work effectively for the different regional pages. The organization will need to develop unique, specific guidelines to govern user conduct in each of its regional pages.
In conclusion, Walmart will need to address the various problems that are affecting its productivity and competitiveness both domestically and globally. Social media technologies and social networking tools offer effective platforms for addressing the concerns of low worker productivity, poor relations between managers and employees, lawsuits related to unfair labor practices, and losses resulting from foreign market withdrawals.
Adler, N. & Gundersen, A. (2008). International Dimensions of Organizational Behavior (5th ed.). Mason, OH: Thomson Learning Inc.
Brunn, S. D. (2006). Walmart World: The World’s Biggest Corporation in the Global Economy. New York, NY: Taylor & Francis.
Ferrell, O. C., Fraedrich, J. & Ferrell, J. (2009). Business Ethics 2009 Update: Ethical Decision-Making and Cases (7th ed.). Mason, OH: Cengage Learning.
Gandolfi, F. & Stratch, P. (2009). Retail Internalization: Gaining Insights from the Walmart Experience in South Korea. Review of International Comparative Management, 10(1), 187-199.
Haneberg, L. (2012). The ASTD Management Development Handbook: Innovation for Today’s Manager. Alexandria, WV: The American Society for Training and Development.
Keyes, J. (2013). Enterprise 2.0: Social Networking Tools to Transform your Organization. Boca Raton, FL: CRC Press.
Schermerhon, J. R. (2010). Management (11th ed.). Hoboken, NJ: John Wiley & Sons.
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