May 2, 2013
Dr. Sherrie Bedford
Organizational Structure Paper Sam’s Club is the one largest retail industries in the world. Sam’s Club controls over 50 percent of the retail grocery and consumables business in the United States, which certainly makes them the largest wholesale retailer in the country. One important reason for Sam’s Club success is the way it is structured and organized. More specifically, Sam’s Club organizational structure helps not only its employees remain focused on customers and the retailer’s competitive environment, but also allows businesses to purchase supplies at low prices via bulk purchases; which enable Sam’s Club to offer lower prices to consumers and beat its competitors (One World Trust, 2010). The way firms organize themselves can often be the most important factor in assessing whether their strategies will succeed. Sam’s Club, as many other major corporations, has worked hard to ensure that its structure and strategy are aligned with each other (Bateman & Snell, 2009). This research paper will include a description of Sam’s Club organizational structure and its comparison and contrast with two different organizational structures. In addition, the research paper will include an evaluation of Sam’s Club organizational functions (e.g., as marketing, finance, human resources, and operations) and how they affect Sam’s Club organizational structure. Finally, the research paper will address how organizational design (e.g., geographic and functional) plays a remarkable role in determining which structure best suits Wal-Mart's organizational needs.
Sam’s Club Organizational Structure
Organizational structure describes the reporting hierarchy correlations that acts as the company’s driving means in achieving company’s mission and objectives through its employees with the most feasible controlling and coordinating efforts. Among several organizational structures such as functional, divisional, matrix, network, vertical, and horizontal, Sam’s Club employs a combined vertical and horizontal divisional structure to support its vast diversified presence in the global marketplace. Within the integrated structure formation Sam’s Club vertical structure represents the centralized chain of command hierarchy headed by the company’s chief executive officer, Rosalind Brewer. Furthermore, within the Sam’s Club horizontal organization, the divisional structure is broken into three distinct operational sections that focus on its specific objectives, markets (customers), and geographical territories; (1) Sam’s Club stores, (2) Wal-Mart, and (3) International stores (Walmartstores.com, 2011). Sam’s Club stores are general discount retail chain stores that focus on satisfying those customers who look for savings (inexpensive) on the products. Sam’s Club retail warehouses offer exclusive services and products to its members only. With successful global market expansion, Sam’s Club divides its stores into geographic territories (i.e. Europe, Asian, North American, and South America) to appropriately respond to local customers’ needs.
Several noteworthy similarities and differences surface when Sam’s Club organizational structure is compared with matrix and functional structures. These divisional, matrix, and functional frameworks are subcategories of the horizontal structures that strive to save time and resources. Matrix structure requires the employees to report to two immediate supervisors. This additional step can cause delays in the decision-making process as well as confusion arising from differing interests among the supervisors where in contrast, divisional and functional structures with the effective delegation enables the employees to reach key decisions more readily. These three structures are feasible for both small and large organizations.
However, when organizational changes are imminent, the divisional and