Application Of 7S Model To Amazon And Walmart

Running Head: APPLICATION OF 7S MODEL TO AMAZON AND WALMART 1

Application of 7S Model to Amazon and Walmart

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APPLICATION OF 7S MODEL TO AMAZON AND WALMART 2

Application of 7S Model to Amazon

Strategy

Amazon’s business strategy is based on leveraging technological capabilities for

enhancing the company’s success (Murninghan, 2018). It has embraced a cost leadership

strategy with the aim of offering the maximum value for its customers at the lowest price

possible (Murninghan, 2018). Besides, it has wrapped its business around the customers by

introducing a portal where customers can address their shopping needs (Murninghan, 2018).

Good to note is that the company has paid off well as it has been termed as the world’s largest

online retailer and it has consistently been the leader in the market segments where it operates.

Structure

Amazon uses a hierarchical form of structure. Since the company size is significant, it

is a bit tricky for it to adopt other structures such as the matrix or the divisional structures. The

company has a large number of employees ranging from 560000 who serve more than 300

million customers around the globe (Taylor, 2018). The company has employed two CEOs and

four senior vice presidents who are answerable to the CEO (Taylor, 2018). Besides, the

company’s structure integrates Global Corporate Affairs alongside Digital Management

Segments (Taylor, 2018). The management of the hierarchies is similar in the different

geographical locations.

Systems

Amazons enjoy its conducive working environment due to the existence of both

informal and formal systems (Murninghan, 2018). The flow of information and decision is

from top to down through the use of emails, word of mouth or through the monthly employees’

magazine. The company has incorporated several systems which include the recruitment and

selection of employees system, team development and orientation system (Murninghan, 2018).

APPLICATION OF 7S MODEL TO AMAZON AND WALMART 3

It has also embraced customer relationship management systems, transaction processing

system, business intelligence system amongst others. The company monitors and evaluates the

systems regularly to enhance their efficiency and effectiveness (Taylor, 2018). Close

monitoring is a sure guarantee of increase in the competitive advantage of the company.

Skills

For candidates applying to technical roles, they need to have technical knowledge.

Artificial intelligence and machine learning as broader skills offer the opportunity to a variety

of tech talent (Taylor, 2018). The company dwells on the fact that it is not a must for one to

have a Ph.D. in computer science for them to handle technical tasks (Taylor, 2018. In the

organization, it is a necessity for one to be familiar with programming skills as shown by

Paysa’s data (Taylor, 2018).The company number 2 on the list, Salesforce has 20,000 staff, but

their top skills are somehow different compared to those of Google (Taylor, 2018). Hiring

managers in the company look for applicants who have developed soft skills such as teamwork,

communication and leadership skills.

Style

The Amazon Company uses the ultra-XY management style. In theory X, the good part

of it is that workers naturally want to be excellent and so its managers encourage them to use

all their abilities to their fullest to enhance effectiveness (Aydin, 2018). On the other hand,

McGregor’s Theory X assumes that workers in the company naturally do less than they are

required of them (Aydin, 2018). This makes the company’s management to subject these

workers to careful supervision alongside punishments and rewards where necessary (Aydin,

2018).

Staff

APPLICATION OF 7S MODEL TO AMAZON AND WALMART 4

The number of staff working for the Amazon Company continues to decrease as the

Seattle –based tech giant reached 566,000 employees worldwide during the fourth quarter of

2017 (Murninghan, 2018). It represents full-time and part-time workers but excludes

contractors and temporary personnel. Within a short period, employment jumped sharply to

541,900, mostly because of the acquisition of Whole Foods and the 87,000 people who worked

for the grocery chain (Murninghan, 2018).

Shares values

The most values principle behind the Amazons workplace is –leading and developing

leaders throughout the organization (Taylor, 2018). It is with this thought in their everyday

routine, the company and its culture makes firm business decisions, have good instincts and

insists for the highest standards (Taylor, 2018). Some of the integral values embraced by Jeff

include putting customers first, and they believe that brands are formed by what you do, not

what you say (Taylor, 2018). ). The company also works under the rule that you should always

accept your limitations and work your way out of the box by the invention (Taylor, 2018. The

company embraces failures and double the number of experiments every year.

Application of 7S Model to Walmart

Strategy

Walmart Company has pursued cost leadership business strategy according to its brand

promise of everyday low prices (Rarick, 2018). It has been able to sustain the approach for a

long time. Walmart has three critical pillars of business strategy which are specified as price,

assortment and access (Rarick, 2018). Due to the company’s enthusiasm in cost leadership

strategy, it attracted criticisms for attempting to pay low wages to its employees. The company

has heavily invested in technology so that its customers can shop from anywhere anytime. The

APPLICATION OF 7S MODEL TO AMAZON AND WALMART 5

current focus of the Walmart is creating a seamless experience for its customers whether they

are shopping from their mobile s or stores.

Structure

Initially, the organizational structure for Walmart was highly hierarchical due to the

large size and scope of its business that consists of more than 11,000 stores in 27 countries and

serves close to 260 million customers each week (Rarick, 2018). The new CEO Dough

McMillon established new initiatives to restructure the organizational structure (Rarick, 2018).

In 2015, the company announced that it would eliminate a layer of management inside 4,500

U.S. stores to lower the rate of bureaucracy and improve customer service (Rarick, 2018).

Systems

Walmart has a wide range of systems of different level of complexity and design. The

methods facilitate and enhance the business operations carried out by the company. These

systems entail the employee recruitment and selection, information technology, finance

systems, and employee performance appraisal (Rarick, 2018). The appraisals are significant in

gauging the rate of performance to identify those who are underperforming. The CEO has the

full mandate to ensure that managers and other top management officials monitor and evaluate

the systems regularly to avoid failures.

Skills

Skills are an essential part of the company’s growth. In the case of Walmart, the

company has so many types of skills which help it achieve its goals. The promise of cloud

content management has been made to unite people, information and applications, together in

one place (Meeks & Chen, 2011). With Box as a content platform, it becomes simple for

Walmart to build a custom app like Academy EDU with the goals of the company and end-

user demographics (Rarick, 2018). Many workers in Walmart have low tech literacy meaning

APPLICATION OF 7S MODEL TO AMAZON AND WALMART 6

that with any technology tool, an intuitive user interface is significant to aid adoption. For

Walmart to higher competitive employees, they consider skills such as teamwork,

communication, financial skills, and conflict resolution skills (Rarick, 2018).

Staff

Walmart’s employees and their assigned job responsibilities are competent. Walmart

Company has a training academy for staffs for training their workers on their operations

(Meeks & Chen, 2011). In 2018, the company is estimated to have trained more than 500,000

workers. Consequently, 230,000 were promoted to occupy specific positions of the company

in different countries (Meeks & Chen, 2011). Full time workers in the organization are eligible

for quarterly bonuses based on their performances (Meeks & Chen, 2011). Since Walmart is

the largest retailer in the world, it offers personal and professional growth for staff. In this case

the staff can greatly impact on their communities (Meeks & Chen, 2011).

Structure

Walmart has a hierarchical functional organizational structure. The structure has two

characteristics which are, hierarchy and function-based definition (Murninghan, 2018). On the

case of the hierarchy feature, vertical lines of command and authority throughout the

organizational structure. For instance, every employee has a superior except the CEO (Rarick,

2018). On the other hand, the function-based definition feature of the company’s organizational

structure involves groups of employees fulfilling specific functions (Murninghan, 2018). A

good example is where Walmart has a department for the role of human resource management.

Besides, Walmart has an information technology department and a marketing department.

APPLICATION OF 7S MODEL TO AMAZON AND WALMART 7

Shared Values

Walmart aims at using their strengths, and collaborate with others to foster change and

transform the systems that the company relies on (Cox, 208). The company believes that the

value-maximizing strategy is the one that creates shared value for customers, business and

society. Some of the three aspirational goals Walmart set in 2005 remain constant as the

company approaches and vision of global responsibility continue to grow Some of the notable

milestones and progress include enhancing associate opportunity and accelerating frontline

retail job mobility beyond Walmart (Cox, 208).

APPLICATION OF 7S MODEL TO AMAZON AND WALMART 8

References

Aydin, O. T. (2018). The impact of Theory X, Theory Y and Theory Z on research

performance: an empirical study from a Turkish University. IJAME.

file:///C:/Users/n/Downloads/201-657-1-PB%20(1).pdf

Cox, A. M., Pinfield, S., & Rutter, S. (2018). Extending McKinsey’s 7S model to understand

strategic alignment in academic libraries. Library Management.

http://eprints.whiterose.ac.uk/135632/7/SevenSpaper14062018_anonymised_-

_revised_final.pdf

Meeks, M., & Chen, R. J. (2011). Can Walmart integrate values with value?: From

sustainability to sustainable business. Journal of Sustainable Development, 4(5), 62.

https://trace.tennessee.edu/cgi/viewcontent.cgi?article=1003&context=utk_retapubs

Murninghan, M. (2018). Equity Culture and Decent Work: The Case of Amazon (2017). New

England Journal of Public Policy, 30(1), 11.

https://scholarworks.umb.edu/cgi/viewcontent.cgi?article=1724&context=nejpp

Rarick, C. A., Williams, H., Barczyk, C., & James, A. (2018). Walmart de Mexico and the

Foreign Corrupt Practices Act: Stepping Over the Border and Stepping Over the

Line. Journal of Leadership, Accountability & Ethics, 15(1).

http://www.na-businesspress.com/JLAE/JLAE15-1/RarickCA_15_1.pdf

Taylor, S. P. (2018). Organisational behaviour, leadership and change. International Journal

of Housing and Human Settlement Planning, 4(1), 21-36.

http://insight.cumbria.ac.uk/id/eprint/3756/1/Taylor_OrganisationalBehaviour.pdf

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