Motivation
can be defined as the drive that compels people to work towards the attainment
of certain predetermined goals (Brisco and Schuler, 1995). Where employees work
to the best of their ability to fulfil organisational objectives, they can be
said to be highly motivated. In the increasingly competitive business
environment, especially in the retail industry, the harnessing of internal
resources of organisations is fast-becoming the next platform for the creation
of a competitive edge among market players. A highly motivated workforce is
reputed to generate high satisfaction levels among the clients of the business
giving such organisations the competitive advantage needed for them to thrive
in the market (Taylor, Beechler and Napier, 1997). The enhancement of internal
capabilities in organisations focuses on both the human and non human assets in
the organisations as well as the management structures and systems embraced for
production in such organisations. Motivation levels among employees gives
organisations the chance to develop unique capacities within the organisation
and such strategic strengths are not easily replicated by other organisations due
to the unique manner in which humans relate to one another and to the systems
in different circumstances (Kraak, et al,
2003). The understanding of motivation is therefore crucial to any strategic
managers in modern times.
Leadership
styles on the other hand determine the choice of behavioural and structural
approaches that manager’s take in the execution of their duties to direct the
organisation and control the activities in the organisations (Taylor, Beechler
and Napier, 1997). The most common leadership styles applicable in
organisations may be cited as authoritative styles, democratic styles, and
laissez faire among others. According to Rowold (1997), the choice of any of
the styles in the organisation should be dependent on its perceived ability to
bring about motivation of the employees. The choice of leadership styles is
dependent on a number of factors. These factors include: the personality of the
managers, the dominant characteristics of the employees, the expectations of
such employees, and the nature of tasks to be accomplished (Rowold, 1997). The
emphasis on motivation is based on the established fact that motivational
levels are directly correlated to the levels of productivity in the
organisation. This in turn translates to higher profitability levels in the
organisations. In fact, research shows that some of the most profitable
businesses in the world have in most cases featured on the list of the top
companies that employees would be most willing to work with based on the nature
of work environment provided and the motivational systems in place (Global
Data, 2011). The knowledge of both theories, among other theories mentioned in
this paper enables the strategic manager in their quest to choose the best
leadership styles for their organisations.
Some
of the most popular motivation theories include the Maslow’s hierarchy of needs
and the Herzberg’s two factor theory. The hierarchy theory divides human needs
into different classes from physiological, social, esteem, to self
actualisation (Samuel, 2001). These needs are such that once the individual is
satisfied with needs at one level; they begin to crave for the satisfaction of
the next level’s needs. Managers are
therefore expected to embrace leadership styles that suit the satisfaction of
the various needs across the board. The two factor theory on the other hand
divides motivational factors into motivating factors and hygiene factors where
the former refers to factors that would normally be expected to yield positive
satisfaction while the latter consist of factors whose presence do not motivate
but whose absence can cause a drop in the motivation levels (Hersey and
Blanchard, 1972). Other humanistic theories commonly used in understanding
motivation are the Theory Y and the Theory X models. While theory X emphasises
that humans are inherently lazy and must be coerced into performing their
duties to satisfaction, theory Y emphasises that human beings generally enjoy
achievement in their work and can exploit their talents to the fullest when
presented with the right environments (Hersey and Blanchard, 1972).
This
research focuses on the choice of leadership styles and the influence of such
choices on the motivation levels in organisations. By so doing, the research
intends to make an in-depth exploration of the systems at Walmart and explain
the influence of the leadership styles adopted on the observed motivation
levels in the same organisation. Walmart is known to be the largest retail
chain in the world with outlets in United States, United Kingdom, China,
Brazil, Argentina, Canada, Costa Rica, India, Honduras, El Savador, Japan, Chile,
Nicaragua, Mexico, Puerto Rico, Guatemala and others (Global Data, 2011). The
company employs over 2 million employees within its expansive chain and had registered
profits of about $ 16 billion in 2010 (Global Data, 2011). It operates a large
number of retail outlets which include discount shops, club stores,
supercentres, and neighbourhood markets. This study seeks to focus on the UK
and US branches which happen to contribute the highest to its revenues with the
USA revenues alone adding up to over 68% of their total revenue in 2010
(Wal-Mart, 2011). Despite the large volumes of employees, Walmart is known to
have the lowest rates of employee turnover when compared to other leading
retail chains in the US and the UK.
Analysts
have listed some of the strengths of the company as its possession of an
employee friendly system; wide distribution network; strong market position;
their capacity to conduct extensive marketing campaigns; and their wide product
range which enables them satisfy a wide range of customer needs (Wal-Mart,
2011). The weaknesses of the retail chain include its recent recalls of
products which could potentially raise queries about their quality control; the
existent of much litigation against them; and the growing market concentration
that heightens competition levels in the industry (Global Data, 2011). Their
opportunities include their capacity for strategic expansion strategies that
can enable them tap into emerging markets, growing health consciousness of
consumers; increasing popularity of supercentres, and the increasing demand for
private label products (Global Data, 2011). The company however faces external
threats posed by a number of factors including: intense competition in the
industry and rising costs of supplies as well as rising labour costs.
The
uniqueness of Walmart can be observed in its strong market leadership which is
an indication of its ability to satisfy its customers consistently. Given the
general notion that such advantages can only be sustained with a motivated work
force, this paper seeks to establish the nature of the leadership that breeds
the high motivation levels among the employees of Walmart.
The
title of the research is outlined as: How does motivation impact the leadership
styles of companies within the retail industry: a study of leadership styles at
Wal-Mart retail chains and their effect on employee motivation. It seeks to use
the knowledge of employee motivation in explaining how organisations can ensure
productivity through the adoption of leadership styles that are compatible with
the given motivational factors. The factors affecting the motivation of
employees are crucial indicators on the employees’ personalities and a good
indicator of the most effective leadership styles that managers could choose to
ensure higher levels of productivities. In answering the research questions, this
paper seeks to use the example of Walmart to underscore the importance of
leadership styles in enhancing motivation in organisations which in turn leads
to higher productivity levels in such organisations. The concepts of motivation
as well as leadership styles have been briefly outlined giving a fair
background to enable informed answers to the following research questions:
- How important is employee
motivation to organisations?
- What factors affect motivation
of employees in organisations?
- How does leadership styles
relate to motivation in organisations?
- What leadership styles are
prevalent at Walmart and how effective are they in ensuring high
motivation levels?
1.3 Rationale for the study
The
success of Walmart has been of keen interest to analysts who have endeavoured
to study the different aspects of their operations outlining various strengths
and weaknesses they may possess. Some of the strengths have been outlined as Walmart’s
strong market leadership as well its ability to ensure that their customers are
satisfied (Global Data, 2011). However, despite the fact that their employees
are an integral part of their success, little attention has been dedicated
towards analysing the manner in which these employees are treated through the
implementation of appropriate leadership styles and how these styles impact on
their motivation levels. Even though leadership is one of the most commonly
researched topical areas in business management, it is ironic that not much
attention has been dedicated to the analysis of the leadership styles in the
retail industry and their influence on the motivation levels in the retail
chains. Most of the existing attempts at bringing out the correlation between
leadership styles and motivation have either been conducted in relation to
general business organisations or have been based on existing theories and not
on actual enquiries. This paper is expected to add invaluable input into the
existing body of knowledge by conducting an in-depth analysis of how leadership
styles affect motivation in the retail chains. This information is expected to
provide a strong basis for scholars who may wish to conduct enquiries in
furtherance of the findings recorded in this paper.
Leadership
can be described as the art of getting individuals to work towards a given set
of objectives (Western, 2008). Effective leadership is dependent on various
factors which mainly relate to the personalities of the leaders and their
subordinates and these factors tend to be similar to the factors that determine
what motivates employees in most situations (Western, 2008). The consonance
between the effectiveness of leadership and motivation of employees is
therefore undeniable. Effective leadership naturally denotes high motivation
levels in organisations. The attention accorded to motivation is founded on the
premise that high motivation levels contribute significantly to the good
performance of companies based on the enhanced productivity of their employees.
Chapter Two: Literature review
The
relationship between leadership styles and motivation has attracted much
interest among business leaders in the retail industries around the world. This
chapter seeks to interpret the meaning of leadership and its importance in
ensuring high motivation levels in organisations. In so doing, the section also
provides the perspectives of various scholars relating the various leadership
styles and their preferable application to the different employee personalities
common in the work place. This chapter also briefly explores the concept of
motivation hence facilitating an informed interpretation of the research
results.
Various
definitions of leadership have been fronted by scholars with the dominant
component of such definitions alluding to the ability to rally people in the
direction that the leader intends them to move. According to Hersey and Blanchard
(1972), leadership is the process by which individuals or groups of individuals
are influenced towards accomplishing predetermined goals and objectives. Stodgill
(1956) further reinforced this definition by introducing the crucial element
played by the adoption of an effective communication process in influencing the
action of individuals or groups of individual towards a predetermined goal.
Leadership remains one of the most intensively studied subjects albeit with the
generation of what could be interpreted as inconsistent and perhaps conflicting
approaches to the classification of leadership style applicable in
organisations. One the most comprehensive classification of leadership styles
theories was done by Stodgill (1956) who consolidated the existing numerous
theories into six categories. These categories include: the great man and trait
theories; environmental theories; personal-situational theories; the
interaction-expectation theories; the humanistic theories; and the exchange
theories.
The
great man and trait theories were among the earliest developed theories and
were predominantly used in the nineteenth century. These theories focused on
the personalities and traits of some of the leaders that had been known to have
a great impact in their societies in the past (Patrick and Charnov, 2008). This
theory underscored the influence of biologically inherited traits among individuals
in enabling them move the masses towards their predetermined objectives. This
theory has come under intense criticism by scholars due to its apparent
oblivion to other elements of leadership that have been discovered by scholars
in subsequent years (Patrick and Charnov, 2008). The environmental or
situational theories take a sharp break from the trait theories by completely
ignoring the importance of personality in leadership. This theory emphasises
that leadership styles are only determined by the situation in which the
leaders find themselves in (Barney, 2000). While scholars agree that
situational factors such as group, place, time, and circumstances are important
determinants of the leadership styles to be embraced, they fault the
environmental theory for ignoring one of the major determinants of leadership
styles- the personal traits of the leaders (Patrick and Charnov, 2008). The
personal situational theories may be seen an attempt to bridge the differences
between the environmental and the trait theories. This theory emphasises the
consideration of the personal traits of the leaders, the circumstances in which
they operate in, and the nature of the tasks or goals to be achieved.
The
interaction-expectation theories focus on the expectation of the persons
involved in the work environment (Brisco and Schuler, 1995). These expectations
are identified by subordinates when an identified lack of the required factors
is observed. Alternatively, the expectations can also be created by the
existence of desirable traits or factors which creating the expectation for
continued existence of such elements. These expectations only arise and are
identified through the process of continued interaction between the managers
and their subordinates. Closely related to this theory are the exchange
theories. Exchange theories emphasise on the contribution of both the seniors
and their subordinates in boosting the motivation levels in the organisations
(Samuel, 2001). Under this model, both the subordinates and the managers offer
each other certain rewards for the fulfilment of the terms set. The
equitability of these rewards contributes greatly to the motivation levels in
the organisations.
The
basic presumption of the humanistic theories is that all human beings have certain
natural sources of motivation within them. This theory emphasises the
enhancement of productivity among employees through the creation of
environments that promote freedom and creativity (Samuel, 2001). Many models
found under this category tend to bear similar characteristics which largely border
on the exploitation of human natural traits in boosting productivity levels in
organisations. The common models under this theoretical category include the
Theory Y Model, theory X theory, the organisation vs. Individual model, the
managerial grid, the task-person leadership style, and the LASI
task-relationship model among others (Stodgill, 1974). The humanistic theories
had gained great prominence in the recent past and continue to influence the
thinking of strategic managers in modern times. Even though this theory was
developed with the assumption that there exists an ideal leadership style
applicable in all situations, subsequent developments have indicated a general
consensus among scholars which holds that adaptability in the choice of
leadership styles is key to boosting motivation levels in organisations (Jacobs
and Jaques, 1987). Style adaptability can be defined as the degree to which a
leader is able to conform to the demands and expectations of subordinates and
other situations when choosing a suitable leadership style (Jacobs and Jaques,
1987).
According
to the humanistic theorists, there are four generalised leadership styles. Each
of these styles has been accorded preferred approaches to leadership as
follows: The high task-high relationship model requires that the leader comes
out as a pace setter, a coach and as a catalyst for productivity (Yuka, 2006). Under
the low task- low relationship models, leaders may choose to adopt the laissez
faire style as well as an abdicative and permissive approach. The high-task
low-relationship scenarios are normally a good front for the application of the
theory X model (Yuka, 2006). Leaders under such situations may also choose
task-oriented, autocratic, and directive approaches to leadership. Managers
operating under such situations also tend to be manipulative, structured, and
restrictive in their daily approach (Yuka, 2006). The fourth situational
setting is the low task- high relationship setting which is closely associated
with the theory Y model. Under this category, managers tend to embrace
participative leadership practices and are more democratic. They also tend to
be affiliative, considerate, employee centred, egalitarian, and
relationship-oriented (Yuka, 2006).
Theory
X has been criticised by modern day scholars as counter-productive in some
instances. It presumes that all employees are inherently lazy and would
generally avoid working to the best of their abilities (Warner, 1994). This
assumption leads to the requirement that strict supervision be done on the
employees in their daily operations and also demands the establishment of
effective systems to ensure proper controls in the organisations. This theory
proposes the establishment of a hierarchical structure with adequate control
measures at all levels (Warner, 1994). Employees are generally expected to show
little or no ambition except in the presence of an enticing incentive program.
They are expected to avoid responsibility as much as possible. In order to meet
the organisational objectives, managers and supervisors are compelled to rely
on coercion and threats in order to get the employee to perform to expectation
(Wren, 1987). Critics however dissent to the beliefs of this theory arguing
that they mistrust, a punitive atmosphere, and very restrictive supervision.
This system focuses on laying blame for poor achievement on specific parties
further contributing to its ability to bring about suspicion in the work place
(Wren, 1987). This model is cited by analysts as one of the least effective
models when an organisation seeks to achieve the economies of scale.
Theory
Y model takes a sharp break from the theory X model and holds that employees
will naturally be ambitious and capable of exercising self control under all
circumstances (Wren, 1987). This model presumes that employee enjoy their
duties at work; both physical and mental. It further stipulates that employees
are naturally creative and desire to use their creativity in their work even
though these capabilities are rarely exploited. Under this model, it is
believed that with the right conditions, employees are bound to seek out
responsibilities and exercise their duties with decorum and self control with
the satisfaction of doing a good job as their greatest motivator (Gannon, 2007).
When looked at from a different perspective, it can be said that theory Y is
simply a set of positive perspectives about workers. In fact, this theory is
known to promote an atmosphere of trust and openness in organisations. In this
model, human resource development is central to the organisation and managers
are expected to promote an atmosphere of openness and involve their
subordinates in decision making processes (Wren, 1987).
A
hybrid between theory X and theory Y brings a more balanced approach to
leadership where the importance of structured control systems is combined with
the trust in employees to ensure both stability and high motivation levels in
the organisations. Despite the apparent suitability of some leadership styles,
analysts contend that different leadership styles remain suitable only for a
given set of circumstances and that it is impossible to achieve productivity by
replicating such styles indiscriminately.
The
emphasis on good leadership practices in organisations is based on the need to
increase productivity in organisations through the enhancement of motivation
levels as well as the relationship between motivation and ‘fit’ in the choice
of leadership styles (Taleghani, Salmam, and Taatian, 2010). The most commonly
applied approaches to synchronising leadership and motivation are placement and
selection; and leadership training.
Placement
and selection concentrates on the employee characteristics when determining
which leadership styles to embrace in the organisations. It takes cognisance of
the influence of personality on the choice of leadership styles and
consequently its effectiveness in the organisation (Adler, 1003). Under this
model, there are four categories of employees which have been identified as
responsibility seekers, closure seekers, the anxious irritable, and the
instrumentalists (Adler, 1003). Responsibility seekers are known to pay close
attention to human relations and are therefore considered to be the best
candidates for management and leadership roles. On the other hand, closure
seekers tend to prefer carrying out specific tasks to completion (Adler, 1003).
They are therefore not suitable candidates for top management jobs which mostly
involve a lot of delegation in the execution of their duties. Instrumentalists
are the category of employees who focus their full attention to their personal
goals and only view their jobs only as means to this end (Warner, 1994). Such
employees should therefore be assigned to positions that are compatible with
their goals where remuneration can be pegged on their productivity. The
instrumentalists would ordinarily be the typical candidates for hourly wage and
commission job positions. Scholars holding the view that inborn traits are
useful in enhancing effective leadership advocate for placement and selection
and hold that persons with leadership traits should be selected to fill
managerial positions (Thornely and Lees, 1993). Noting the high staff turnovers
usually characterising the instrumentalists, analysts frown upon the
appointment of such employees holding that managers should be selected from
persons who are likely to stay with the organisations for longer and therefore
ably internalise the organisation’s vision and effectively impart such visions
on their subordinates. Placement
programs can also be effected by implementing a job rotation program where
various people are given an opportunity to lead their groups and the resultant
level of productivity used as a gauge to measure the effectiveness of the
leaders (Western, 2008). This system systematically weeds out ineffective
leaders and replaces them with effective leaders hence leading to higher
productivity levels in the organisations. However, this process needs the engagement of
great expertise for it to be beneficial to the organisation.
The
other style of using leadership styles to boost motivation and productivity in
organisations is the use of mirroring and training (Western, 2008). Mirroring
can be done through the use of laboratory techniques. These techniques may
include role playing, leadership questionnaires, and group interaction sessions
(Adair, 1993). Mirroring can also be done through the observation of the
functioning of other organisations. Leaders should always endeavour to obtain
feedback on their leadership styles from their peers and subordinates through
the promotion of an objective enquiry. Some of the data collection instruments
for mirroring include Hersey and Blanchard’s Leader Adaptability and Style
Inventory; Stodgill’s Leader Behaviour Description Questionnaire; and McBer’s
motivational style questionnaire among others (Western, 2008). These
questionnaires cover a number of management aspects of the leader including
their adaptability to different situations, their style ranges, and training
styles among others. One of the most commonly used approaches for improving the
effectiveness of leadership in organisations is through the training of the
managers in essential leadership skills (Peddler, Burgoyne and Boydell, 2010).
Some of the tools used in training managers include the use of leadership
games, class lectures, role playing, group meetings and others. The success of
leadership trainings mainly depends on the commitment of such trainees to
utilise the trainings to the optimum. The involvement of subordinates in
identifying the training needs of their seniors is also known to be quite
effective. Analysts have established through subsequent studies that trainings
contribute positively towards the effectiveness of leadership (Peddler,
Burgoyne and Boydell, 2010). However, trainings may fail to achieve the
intended goals due to hitches in the training programs. Such hitches may be
associated with the lack of appropriate training tools, inadequately skilled
trainers, and others.
It
is also important to understand motivation of employees in organisations. Motivation
can be defined as the driving force behind the efforts of humans to achieve
given goals (Kraak, et al, 2003). The basic understanding of motivation among
humans is based on the need to minimise pain and maximise pleasure. Most
motivation theories emphasise the importance of incentive programs that go
beyond the satisfaction of their physical needs and this goes to the heart of
the choice of leadership styles (Kraak, et al, 2003). The Maslow’s hierarchy of
needs outlines the various needs that employees have at different stages in
their career (Kraak, et al, 2003). Starting with basic needs which are mainly
physiological needs, the needs hierarchy proceeds from through to safety needs,
social needs, esteem needs and self actualisation needs. According to this
hierarchy, once an employees needs are satisfied on one level, the employee
starts to have a growing need for the next levels. The general evolution of
these needs goes from the need for pay to the need for glory and belief in
one’s ideas. Although the Maslow’s hierarchy explicitly implies the
satisfaction of one level before an employee has needs for the next level, analysts
hold the opinion that most employees have needs that cut across the hierarchy
at any particular point (Samuel, 2001). This is especially so in the case of the
needs adjacent to each other in the hierarchy. Managers must therefore ensure
factors such as job security and the provision of an atmosphere that promotes
employee fulfilment alongside other measures such as the adequacy of their pay
packages. Leadership styles that are designed to make the employees have a
higher sense of self worth therefore help in raising the motivation levels of
the employees.
Other
motivation theories include the incentive theory, the drive-reduction theory,
the Herzberg’s two factor theory, and the self determination theory among
others (Brisco and Schuler, 1995). The incentive theory identifies the sources
of motivation for individuals as either intrinsic or extrinsic. The Herzberg’s
two factor theory on the other hand separates the sources of motivation into
motivators and hygiene factors. Motivators are factors that give positive
satisfaction to employees and include factors such as responsibility,
recognition, the level to which the work is exciting or challenging, and so on
while hygiene factors on the other hand refer to the factors which would
ordinarily de-motivate employees in their absence even though their presence
may not necessarily motivate such employees (Hersey and Blanchard, 1972). These
include factors such as sufficient wages, job security, and status. The self
determination theory on the other hand focuses on the importance of intrinsic
factors in motivating employees. The knowledge of such motivational theories
gives the managers in organisations the opportunity to make informed choices on
the leadership styles to use in order to bring out the desired results in their
employees. The goal that such managers must have in mind is employee motivation
and increased productivity.
Motivation
and leadership styles of choice are also determined by the cultural practices
of the host countries of the organisations (Taleghani, Salmam and Taatian,
2010). Culture affects the manner in which people relate to their peers, their
subordinates, and their seniors. In societies that tend to have a high power
distance reliance on authorities for instructions is more pronounced
(Taleghani, Salmam and Taatian, 2010). In such cultural settings, subordinates
prefer to follow orders and view the authoritarian manager as the real leader.
Their productivity levels are therefore boosted by such leaders. This is
especially common in areas such as China (Gannon, 2007). On the contrary,
cultures with a lower power distance as is common in the USA, expect to be
involved in the decision making processes in the organisations and expect to be
fully informed whenever the organisation is taking any strategic steps (Gannon,
2007). Democratic and participative leadership is therefore the style of choice
among managers in such societies. Similarly, cultures that tend to be
collectivist emphasise the importance of belonging to teams and societies.
Individuals under such cultures tend to be most effective when making their
contribution to the overall performance of their teams. Team members are
responsible for each other where they supervise and provide guidance for
themselves based on the overall objectives set out for the teams. Managers in
such societies may therefore want to consider giving prominence to peer groups
in the execution of the company objectives. Japanese cultures tend to embrace
this model and have so far been very successful with (Taleghani, Salmam and
Taatian, 2010). Such approaches on the other hand would be highly de-motivating
for employees in Western countries where the cultures are predominantly
individualistic.
Comparisons
between the contribution of autocratic and democratic leadership styles show
conflicting results on which styles are more effective. This may be attributed
to the fact that such styles are applicable in different cultural settings and
seem to inspire similar levels of motivations among the employees (Jacobs and
Jaques, 1997). Further studies have indicated that high-relationship models
tend to result in higher levels of productivity than the low-relationship
styles. The general consensus also seems to be moving to a preference of the
theory Y leadership style to the theory X leadership style (Jacobs and Jaques,
1997).
The
choice of leadership styles should always be informed by a combination of the
managers’ personalities and the situational factors such as the characteristics
of the employees and their expectations of the organisation (Patrick and
Charnov, 2008). For instance, leadership styles that apply little or no
motivation over subordinates are suitable for employees that tend to be
independent minded, high spirited achievers, and creative individuals who are
eager to get hold of their responsibility centres and exploit their talents in
delivering on such responsibilities. Patrick and Charnov (2008) warn that if
self motivated visionaries are exposed to excessive supervision, they would
tend to feel chocked and would therefore either move away from the organisation
to find freer working conditions; or become de-motivated and have an inhibited
productivity level. Leadership styles that tend towards the involvement of
employees in decision making are suitable for employees who are motivated by a
sense of responsibility and belonging in the organisation (Yuki, 2006).
Involvement in decision making enables employees to own the decisions being
made motivates such employees to boost their productivity levels in order to
ensure that the goals determined are met. The application of mixed leadership
styles can be done based on three motivations namely: reward motivation, goal
motivation, and recognition motivation (Yuki, 2006). The choice of the mixed
styles depends on the leader’s personality as well as on the subordinates’
personalities. Persons motivated by materialism are best served by
reward-oriented leadership styles. This may entail the formation of reward schemes
that ensure that employees get reward for their achievements. For such schemes
to be effective there must be a high level of transparency in the awarding of
the designated awards among the achievers in the organisations. Employees
expecting the enhancement of their social status also compel managers to adopt
leadership styles that ensure that they are adequately recognised in the
organisation (Western, 2008). The adoption of a participative leadership style
where such individuals are consulted prior to any major decision making gives
them the sense of social status required. Recognition schemes recognising
skills, innovations, and other achievements can also be designed and
implemented to ensure that such employees are adequately motivated (Western, 2008).
For employees that are highly dependent on authority, or those that tend to
prefer the status quo and tend to resistant to change, the management may be
well advised to adopt leadership styles that emphasise tight supervision
procedures. Authoritarian leadership styles tend to be more effective in such
situations. The managers could also opt to take advantage of the employees’
dependence on each other to introduce peer groups where the group members
supervise and guide each other in the execution of their duties (Western, 2008).
The
contents of this section outline the mode of enquiry employed in the study. The
binding philosophies guiding the research as well as the choice of research
methods have also been outlined in order to create an understanding of the
integrity of the data collected as well as the resultant inferences and
recommendations generated. The importance of the focus on the research
methodology cannot be overestimated. It enables a balanced approach to enquiry
and thereby contributing immensely to the reliability of data obtained.
The
highlighting of research philosophies enables the appreciation of the options
available to the researcher as well as the appreciation of the reasoning behind
the choice of research philosophy to embrace in this research (Research
Philosophies, 2009). Research philosophies refer to the dominating perceptions,
beliefs and assumptions that influence the conduct of research. These philosophies
are important in enabling the researcher to identify any partisan perceptions
among the respondents or their personal perceptions and be keen to avoid any
harmful effect that such perceptions would have on the objectivity of the
information gathered (Mayor and Blackmon, 2005). The nature of information
being collected is often the greatest determinant of the choice of research
philosophy to embrace. The main research philosophies dominating the science of
enquiry include the positivist; constructionist or interpretivist; and the
realist philosophies (Research Philosophies, 2009). Each of these philosophies
becomes the philosophy of choice depending on the nature of information to be
gathered.
The
positivist approach mainly dwells on observable realities. It mainly focuses on
verifiable and quantifiable data that is mainly collected the existence of a
relationship between variables (Saunders, Lewis and Thornhill, 2007). The
common approach for this kind of research is that the enquiry begins with the
stating of a hypothesis where data is collected and tested using various
scientific methods to determine whether or not such a hypothesis stands true.
This philosophy holds that there exists an objective reality which is not
subject to interpretations. These realities remain unchanged except by the
variation of the variables and not by the generation of any qualitative
views. When conducting enquiries under
this philosophy, the most common data collection methods include the use of
surveys, questionnaires, and the use of secondary data (Research Philosophies,
2009). The constructionist philosophy takes a sharp contrast from the
positivist and almost completely denies the existence of objective realities
that are applicable across the board. This philosophy holds the view that all
information is subjective and that every person forms perceptions based on
their personal interaction with the real world (Research Philosophies, 2009).
All opinions are therefore subjective and must be considered as such. Due to
the fact that the interaction between people and the environment is continuous,
it is expected that any resultant perceptions are bound to evolve with time.
This philosophy therefore implies that any research findings only relate to a
specific point in time and continuous enquiries must be conducted to capture
the changing realities in the society as determined by the continuous
interaction between such people and their environments.
The
realist philosophy seeks to bridge the gap between the constructionist and the
positivist philosophies. This philosophy acknowledges that while objective
realities exist about various phenomena, some components of the knowledge are
determined by the understanding of the society about such realities (Research
Philosophies, 2009). This research makes adopts the realist philosophy. The
fact that motivation and leadership relate intimately to the components of
human character implies that societal perceptions are bound to play a great
role in influencing their interpretation of the realities. These perceptions
must however not cloud the fact that certain realities exist in relation to the
relationship between leadership styles and motivation in organisations. The
realist approach helps this research to provide an objective insight into the
concerns raised by the research questions in the earlier sections.
Like
in any other activity, the choice of strategy in research determines the
quality and the integrity of the information gathered and the conclusions drawn
(Kvale, 1996). Research strategy involves the determination of the data
collection methods, choice of the target population, design of questions to be
posed in order to attract the responses desired, and the choice of analytical
and interpretation tools (Kvale, 1996). A combination of these factors greatly
determines the integrity of the research findings. It calls for the matching of the research
methodology to the type of information to be collected. Some of the key
elements to be considered when coming up with the research strategy include the
resources available for research, the amount of time at the researcher’s
disposal, and the type of information to be collected (Kumar, 2005). Where the
resources are limited, the researchers are better off limiting the sizes of
their samples and restricting their data collection methods to those within
their expense budget. The resources available for this research were quite
limited and the research was therefore limited to employees of the company in
the USA alone instead of needing to collect information from such employees in
various parts of the world. The type of information is also largely
qualitative. The data collection therefore concentrated on capturing the
employees’ perceptions on the various issues and did not attempt to draw any
quantitative relationship between any of the factors relevant to the topic of
study. The findings in this research are therefore a reflection of the members
of the organisation which have been well supported by the evidence gathered in
previous studies that related to relevant topics.
Issues
of motivation are largely dependent on the perceptions of individuals are
different people are expected to derive their motivation from different factors
and to different extents. The research therefore sought to engage the data
collection method that would best capture these opinions: the use of written
interviews. The written interviews provide the respondents with the opportunity
to attend to the surveys at their own convenience, giving them the opportunity
to respond without any undue pressure. The targeted employees of Wal-Mart were surveyed
and the responses recorded to enable good analysis and report writing for the
study. The sampling factored a cross section of employees due to the fact that
motivational issues cut across all ranks in organisations and not just
restricted to the lower level employees. The information collected and recorded
was analysed against the evidence presented by various motivation theorists and
from the evidence of past related studies as collected from various secondary
sources. The secondary data was mainly collected from industry reports, company
publications and other reliable sources; both online and in printed forms.
Secondary
data was considered central to the study as it provides the theoretical
framework through which the information gathered can be analysed (James and
Vinnicombe, 2002). This information was collected from previous related studies
as well as industry reports and company publications which were deemed as not
only reliable but also relevant to the topic of study. The information was
mainly collected through the internet and from various agencies and libraries.
Secondary data is crucial to any research and provides the advantage of having
written information which allows for analysis at the researcher’s convenience
(Eriksson and Kovalainen, 2008). These sources also tend to be written after
thorough research which is in many cases not restrained by time and resources
as is the case in this study. This makes them more reliable and provides a firm
background for analysis and interpretation. However, most of the relevant
secondary data available tend to serve objectives that are different from the
specific studies. For instance, in the case of motivation and leadership
styles, the bulk of the studies have spanned across a number of organisations
with many of them carrying out industry analyses. This spectrum is much wider
than the scope of this study which specifically narrows down on Wal-Mart and
their leadership styles. Moreover, these studies are conducted at specific
times and the changing perceptions and preferences in the market are bound to
render such findings outdated within a relatively short time. Primary research is
therefore crucial to cater for the weaknesses of secondary research as has been
cited. The primary data in this research was collected through the use of written
interviews. The choice of this method was based on the perception of the type
of information to be collected. Motivation is highly personalised and requires
proper articulation for the researcher to be able to record reliable findings. Written
surveys therefore serve this purpose by allowing the respondents the
opportunity to attend to the questionnaires when they are most free and
therefore able to articulate their answers which are thought through and
comprehensive (Easterby-Smith, Thorpe and Jackson, 2008). Questionnaires are
however limited in a number of ways. For instance, where there is no physical
contact between the researcher and the respondents, the response rates may be
low and therefore render the research quite ineffective (Easterby-Smith, Thorpe
and Jackson, 2008). This is especially so where the researcher and the
respondents are located in different countries as is the case in this study. A
large number of potential respondents were contacted to participate in the
survey and the researcher picked the first three hundred respondents that
appeared most willing to participate. This measure was aimed at pre-empting any
cases of lack of responses. Questionnaires are also prone to misinterpretation
on both fronts where the respondents may fail to accurately interpret the
questions or fail to articulate their answers in a manner that would easily
understood by the researcher (Kumar, 2005). In order to lower the risk of this,
the questionnaires were carefully designed with the researcher totally avoiding
the use of any technical terms that would render any of the questions
confusing. The questions were simply phrased and taken through a series of
tests to ensure that instances of misinterpretation would be minimised. The
questionnaires were distributed through the use of emails and the responses
collected through the same medium. Email communication proved to be cost
effective and therefore good for this study in view of the resources available.
The
population refers to the subjects of the study. In this case the population is
the employees of Wal-Mart. The categories of employees on whom motivation plays
a role cut across the various ranks from the lower level employees, to the
supervisors, technical level managers, and even the senior level managers. Each
of these categories has a manager over them whose leadership styles may affect
how they get motivated and how productive they end up being. As a general rule,
the leadership styles exhibited by the top management (especially the CEO) tend
to be adopted by the junior managers hence making the CEOs’ leadership styles
to be the subject of research in many cases.
Wal-Mart has over 2 million employees globally and is reputed to be one
of the companies with the lowest levels of staff turnover. This research
focuses on capturing the experiences of these employees by focusing on the employees
in the USA whose experiences are expected to be similar to those of Wal-Mart
employees in other regions. Their perspectives of the practices in other
regions will also be useful in determining the value of embracing different
management styles for different regions.
The
resources and time available for research is the key determinant of the sample
size to be considered in any study. The wisdom behind sampling is in the fact
that representative sections of the whole tend to have similar opinions to that
of the whole population hence making any decision to engage the entire
population largely unfruitful (Saunders, Lewis and Thornhill, 2005). Wal-Mart
employees are over 2 million with those in the USA being more than 500,000.
This makes it extremely difficult to engage in a comprehensive study within the
time allocated. Sampling enables the researcher to capture the perceptions of
the whole population through the capturing of the views of the representative
subsection. The sample picked on should be large enough to be reflective on the
whole while also being small enough to facilitate effective enquiry. The sample
size picked for this study was 300. The number was viewed as large enough to
reflect on the perceptions of the population while being small enough to
facilitate effective analysis of the responses provided. The responses provided
in written form are designed in accordance with the preferences of the
respondents unlike in oral interviews when the researcher can influence the
form and design of the responses. This implies that the researcher allocates
enough time to make sense of the responses provided and provide an analysis
that makes sense of the bulk of data provided. Accordingly, a period of eight
weeks was allocated for the interpretation and analysis of the responses. The
sampling methods used in this study were both random and judgemental. The
employees were segregated into different categories: lower level employees,
supervisors, and middle level managers. This categorisation was important to
ensure that the different perspectives are ably captured. In random sampling,
the members of the population have an equal chance of being selected while in
judgmental sampling; the researcher specifically determines the choice of
target interviewees based on their assessment of the knowledge possessed by
such interviewees (Mayor and Blackmon, 2005). The 300 interviewees were
distributed as follows: 200 were lower level employees, 60 were supervisors,
and 40 were managers.
The
data obtained was analysed through qualitative techniques due to the nature of
the enquiry. Analysis and interpretation allows for the simplification of the
data collected in a manner that allows the users of the information to quickly
and easily read and understand the contents and their implications (Johns and
Lee-Rose, 1998). Analysis and interpretation therefore allows for the sense
making of the bulk of information collected. The information gathered would be
meaningless without analysis. To enable quicker understanding of the issues,
visual aids have been factored in the presentation where the strength of
various points have been elaborated upon with the aim of ensuring that the
users of the information can benefit to the optimum from the findings of this
study. The analysis factors in the findings made through primary research and
such findings compared and contrasted to the findings of secondary research
with the aim of drawing parallels between the practices of Wal-Mart and the
established theories of management and employee motivation.
The
questionnaires were administered through email and there was therefore no
physical contact between the researcher and the respondents. This meant that
the researcher had little control over whether the respondents would present
their answers or not. This handicap was overcome by ensuring that only the
respondents who had already indicated willingness in participating in the
survey were factored in. There were also questions of anonymity, especially in
view of the fact that communication was through emails. Email addresses are
mostly personalised making it impossible for respondents to maintain anonymity
as their identities would certainly be captured from the email addresses used. The researcher had to make an explicit
commitment that the identity of the respondents would under no circumstances be
revealed to anyone; and this assurance was done in writing prior to the
commencement of the survey. The final challenge related to the adequacy of
information about the management style modifications across the different
regions. A good number of employees were not well versed with the different
leadership styles in regions where Wal-Mart operates. However, this handicap
was overcome through the analysis of recent studies conducted in some of the
regional offices of Walt-Mart.
The
results recorded in this chapter are mainly a reflection of the data collected
from the primary research which was done through oral interviews. The results
have been organised around the research questions considered and related
questions whose aims were to provide a clarification to better attend to the
research questions. The enquiry establishes that motivation levels are high
among the Wal-Mart employees and that this motivation enables them to boost
their productivity as elaborated in the following subsection.
The
lengths of service for the employees were varied between 2 years and 10 years.
The importance of considering the lengths of service was to establish the
extent to which the interviewees could authoritatively comment on the
leadership styles and motivation levels at Wal-Mart. Statistics were as
tabulated below:
Statistics on the
levels of experience
|
||
Lengths of service
|
frequency
|
%age
|
1-5 yrs
|
82
|
27%
|
6-10 yrs
|
116
|
39%
|
10-15 yrs
|
67
|
22%
|
over 15 yrs
|
35
|
12%
|
With
only 27% of the respondents with an experience of between 1-5 years, this
research can be said to be reliably informed by the input of employees with
sufficient knowledge of the philosophies and leadership styles prevalent in the
organisation.
In
order to assess some of the crucial elements of motivation levels at the
company, the respondents were asked to state how long they planned to continue
working with Wal-Mart. Over 56% of the respondents indicated that they had no
intention of leaving the company in the next five years with the rest
indicating that their departure could only be influenced by the existence of
much better offers from other organisations. Only 5% of the respondents
indicated that they intended to leave the company within 12 months. The answers
to this question helped demonstrate that the employees of the company view
themselves as long term partners of the business and would therefore be
interested in propagating the long term interests of the company.
levels of employee
satisfaction at Wal-Mart
|
||
levels
|
frequency
|
%age
|
very satisfied
|
98
|
33%
|
satisfied
|
135
|
45%
|
neutral
|
6
|
2%
|
dissatisfied
|
45
|
15%
|
very dissatisfied
|
16
|
5%
|
As
can be seen, the satisfaction levels in the company were quite high. 78% of the
respondents were either satisfied or very satisfied. This is a very high
threshold. When contrasted to the findings of the previous question where only
5% were intending to leave the company within 12 months, these figures indicate
that even among the dissatisfied employees, there seems to be a growing sense
of acknowledgement that Wal-Mart leadership and management styles are
unrivalled in the industry hence making them the employer of choice in spite of
their own sentiments. The reasons for the high motivation levels were varied.
Most of the highly motivated employees cited the compatibility of their
personal goals with those of the company as one of the main influential factors.
In their view, the company had adequately aligned their reward systems to suit
their aspirations as far as financial goals were concerned. The fair treatment
at work and involvement in crucial decision making was also cited as one of the
factors giving the employees a sense of belonging and a motivation for them to
exploit their creativity for the benefit of the company. This innovation is
duly recognised by the company.
Those
who were found to be dissatisfied were of the opinion that the reward systems
at the company were unnecessarily emphasising individual performance at the
expense of teamwork in the company. According to them, employees would be less
enthusiastic about making an effort into an activity whose results would be
attributed to another employee. This potentially undermined any benefits that
could be derived from teamwork and team responsibility. In addition, arguments
were advanced on the management and leadership styles which were viewed to be
insensitive to the preferences of the minorities in the organisation. However,
this minority view should be discounted in view of the fact that the
satisfaction levels in the organisation are at an impressive 78%.
To
establish the rationale for focussing on motivation as a basis for influencing
the choice of management styles in organisations, the respondents were asked if
they thought motivation was crucial to motivation levels among the employees.
An overwhelming majority (94%) responded to the affirmative. The argument in favour of this point was that
motivation goes beyond the confines of any regulations in ensuring that
employees do what they are required to do. Most regulations only set the
minimum performance thresholds that the employees must achieve for them to
continue holding their positions in the organisation. Motivation on the other
hand drives the employees to perform to levels of achievement that are high and
above the minimum thresholds set. There are also certain elements of employee
behaviour that cannot be regulated by any guidelines. Aspects such as the level
of warmth with which the employees treat customers can only be optimised in
environments where the employees are very well motivated. Such motivation
levels often translate into higher levels of customer satisfaction hence helping
to improve the overall performance of the organisation. The connection between
employee motivation, productivity, and the overall company performance is the
underlying reason for the focus on motivation when determining the leadership
styles to be embraced in any given organisation. However, a dissenting opinion
by the minority was presented to the effect that the use of punitive measures
to ensure that standards are complied with is good enough.
Some
of the factors that contribute most to employee satisfaction include financial compensation,
provision of optimal working conditions, recognition of achievements, and
involvement in decision making. Financial compensation featured as the most
important factor with most employees citing it as one of the factor that best
contributes to their satisfaction levels. The wages paid should be enough to
guarantee the employees the means to live a decent life where they are able to
access the necessities of life without undue strain. Financial compensation not
only entails the wages paid but also any additional incentives based on
performance that would enable the employees to realise their financial goals
through their performance in the company. Such goals may include plans such as
buying a home and making investments among others. However, financial
compensation alone cannot guarantee motivation. Employees need to feel
motivated and an important part of the organisations. Accordingly, it is
important to acknowledge their unique contributions as well as involving them
in making certain operational and managerial decisions.
Motivation
and leadership styles go hand in hand. According to most of the respondents, it
was important that the leadership styles embraced in the organisations greatly
influence motivation levels among the employees. Leadership styles work
differently in different contexts and the effectiveness of the same is
influenced by a number of factors. Some of the factors cited by the respondents
included the nature of the work to be done, the possible implication of
wrongful use of the decision making powers accorded to juniors, the
expectations of the employees, the expectations of the superiors, and the
predominant cultural values in which the organisation operates. These factors
were noted to be interrelated to a certain extent even though each of them held
a significance of its own. For instance, in high power distance societies,
employees tend to prefer the authoritarian leadership styles where the leader
provides the direction that the organisation must take, allocates the duties of
each of the employees, and monitors their performance to ensure that the set
goals are realised. In societies where democracy is preferred and the power
distance is low, employees like being part of the decision making process where
such contribution helps give them a sense of belonging to the organisations.
Expectations on individual responsibility versus collective responsibility also
play a crucial role.
According
to the respondents, the most popular leadership style is the democratic
leadership. In their opinion, this style allows the organisations to tap into
the special skills in the workforce to ensure the success of the organisation.
It must however be noted that the respondents mostly come from the USA where democracy
is well established and therefore preferred to other styles of leadership. This
method enhances motivation in societies that are mainly democratic such as the
USA and most European countries which are increasingly emphasising the
importance of participatory and transparent decision making structures. Authoritarian
leadership was also cited as a little popular but only to limited extents where
the nature of the work is such that decisions must be made promptly or where
the work is sensitive and decisions must be left to the more competent
managers. In societies such as Japan and India where Wal-Mart subsidiaries
Seiyu and Best Price operate respectively, Authoritarian leadership would be
more effective than democratic leadership. Other leadership styles such as the
Laissez Faire style were mentioned but with a very poor rating as far as
effectiveness are concerned. As the respondents stated, the style could be
effective only for a short while with the effects of a lack of regulation
setting in to bring about a sense of disillusionment among the employees. This
could become a major de-motivating factor in the long run.
The
respondents categorised the leadership model as a hybrid of a number of styles.
The dominant leadership styles of authoritarian, democratic and the laissez
faire were applied to different degrees to come up with the unique style that
helps Wal-Mart to occupy the strategic position that it holds in the market. With
a firm emphasis that leaders are solely responsible for their management decisions,
Wal-Mart engages both authoritarian and democratic leadership models. This
hybrid allows the company to enjoy the benefits of both systems where
unilateral decisions are made in situations that call for quick decisions in
response to certain changes in circumstances. Some threats and opportunities in
the environment require that an organisation makes very quick decisions in
order to realise any benefits. Participatory processes are often lengthy and
not known for prompt decision making. However, such processes are good for the
organisation as they make the employees feel very much valued and helps ensure
that the company decisions are owned and internalised by the employees with
relative ease. This greatly contributes to the motivation levels in the
organisation. Where unilateral decisions are made, the same are communicated to
the employees with tact (in a manner that recognises their unique abilities) to
ensure acceptability and internalisation.
The
responses provided outlined a number of factors as the main contributors to the
choice of leadership styles used in Wal-Mart. The personality of the founder
and the longest serving CEO of the company Sam Wart Walton and his philosophy
was quoted as the most dominant factor. Walton tended to take a break from the
traditional perspectives in companies that viewed employees as just another
factor of production and adopted the view that employees were long term
partners with whom he could work to ensure greater value and pleasant
experiences are passed on to the customers. This outlook saw him listen more to
his employees whenever decisions were to be made hence building an
organisational culture that promoted participatory decision making. The other
reason pertains to the expectations of the employees. With the predominant
social thought in the USA being the respect for democracy and transparency in
leadership, employees tend to have similar expectations in organisations. They
therefore expect to have their inputs factored in to a certain extent in the
organisational decisions. The third factor related to the nature of the
industry. The retail industry in the USA is highly dynamic and is prone to
changes in customer preferences in terms of product range, store designs,
pricing, and even mode of distribution. Recognising employee participation in
decision making turns the thousands of employees into organs of market research
that gather any such changes and enable the organisation to have timely
detection structures and respond ahead of their competitors. The unique
application of the leadership styles at the company has seen it grow to be the
largest retailer in the world.
The
chapter on discussion on results elaborates further on the findings of the primary
research by linking such findings to known theories on leadership and employee
motivation. The chapter also elaborates further on the practices at Wal-Mart as
gathered from various secondary sources with an aim to reinforce the findings
recorded in chapter five above.
Having
been affected by high staff turnovers in the past, Wal-Mart has been making
significant improvements to its leadership and management practices in order to
consolidate its market leadership position in the industry (Hayden, Lee,
McMahon and Pereira, 2002). Wal-Mart takes leadership very seriously and has
even developed a management manual that illustrates among other things the
leadership styles that are effective in different situations (Patel, Radicevich
and Tea, 2009). The main areas focused on in addition to leadership include
motivation, stress and conflict management, and communication. The influence of
the founding CEO Sam Walton and his approach to motivation has remained
dominant at Wal-Mart (Orgel, 2010). The main motivating factor that sets the
company apart from their competitors is the use of the reward power. Distinct
reward systems have been established to recognise unique contributions of the
employees and the achievement of the set targets (Buczak, 2011). This motivates
the employees to pursue the achievement of the targets with vigour.
The
three elements of motivation identified by Wal-Mart include intensity,
direction and persistence. Intensity refers to the measure of how hard an employee
works (Patel, Radicevich and Tea, 2009). Motivation is mostly measured through
productivity with the motivation levels in organisation presumed to be high
when productivity is high and low when productivity is low (Patel, Radicevich
and Tea, 2009). Motivation level can also be determined by determining the
extent to which the employees understand the company’s goals and the extent to
which these goals have been internalised by them (Creech, 1995). It is in this
second element that the importance of participatory decision making comes in. As
analysts would hold, organisations that involve their employees in decision
making tend to have a higher level of acceptance and internalisation of their
vision and objectives among the staff than those that mainly follow the
authoritarian model (Barney, 2000). Persistence measures the length of time
that the motivated employees tend to stay motivated. This requires constant
performance evaluations that continuously measure the productivity levels of
employees and the extent to which such employees identify with the vision and
goals of the organisation (Patel, Radicevich and Tea, 2009). Wal-Mart conducts
its performance appraisal on its employees on a quarterly basis (Walmart, 2011).
This helps ensure that they can accurately monitor employee productivity levels
and attend to any arising issues before the employees become too discouraged to
remain effective. The company further identifies motivation types as both
intrinsic and extrinsic. Intrinsic motivation stems from inside the
individuals. These individuals gain satisfaction from their accomplishments and
are motivated despite any lack of rewards. The extrinsically motivated
individuals on the other hand derive all the motivation from external factors.
They majorly depend on rewards and compliments in order to remain motivated. At
Wal-Mart, managers are trained to identify these distinct characteristics among
their juniors in order to know to which extent to apply the motivators for
maximum impact (Victor, 2011).
Wal-Mart
identifies the de-motivating factors as lack of communication, poor change
management, lack of recognition and lack of trust in managers (Patel,
Radicevich and Tea, 2009). This inspires the managers to practice good
leadership skills as far as effective communication and the other factors
mentioned above are concerned. The company also identifies the main motivators
as participation, empowerment and the reward power (Patel, Radicevich and Tea,
2009). Participation refers to the involvement of employees in decision making
in their jobs (Miller and Toulouse, 1986). This firm commitment to
participation as a way of boosting motivation levels form the basis for the
leadership styles embraced by the organisation. Most decisions are made after
consultation with the employees in the organisation hence making them feel as a
part of the organisation (Walmart, 2011). Structures have also been established
that allow employees to communicate their observations and suggestions on steps
to be taken by the organisation in response to the arising threats and
opportunities (Bavaria, 2011). Some of the operational practices settled upon
by the business also involve the allowance for some level of flexibility in the
schedules of the employees. The leadership model also allows the company to
pursue the principle of empowerment (Bavaria, 2011). Employees are given the
authority to make decisions relating to their work where they are allowed to
make their own work related goals and make minor decisions that would
facilitate the attainment of such goals (after consultation with their
superiors) (Bavaria, 2011). The reward systems used at the company involve both
the merit system and the incentive system. The merit system involves the use of
the annual pay increases to reward the high performers (Patel, Radicevich and
Tea, 2009). In other words, those whose performance is higher than the rest
tend to gain higher pay increases than the poor performers. This encourages the
employees to put in more effort to ensure that their ratings are high at the
end of the fiscal year. The incentive systems in use at Wal-Mart include the
use of bonus payments to recognise high achievement; commissions on sales made;
and the use of fringe benefits such as the offering of low interest loans
(Walmart, 2011). The non financial incentives involve practices such as job
rotation that help keep the jobs more interesting at any particular point.
Analysts
view the main approach taken by Wal-Mart in their approach to motivation as a
combination of both the Theory X and Theory Y models. While theory X emphasises
that humans are inherently lazy and must be coerced into performing their
duties to satisfaction, theory Y emphasises that human beings generally enjoy
achievement in their work and can exploit their talents to the fullest when
presented with the right environments (Hersey and Blanchard, 1972). In addition
to the positive motivation incentives in place, Wal-Mart emphasises the
achievement of a given minimum below which employees can face certain punitive measures
(Orgel, 2010). Starting with stagnation in salary review for poor performers,
the company also pursues measures such as declaration of redundancy on
employees whose performance has been identified as consistently below
expectations (Orgel, 2010). This is the element of the Theory X which the
company tends to downplay in most situations in order to avoid injecting
negative energy into their employees which they prefer to move towards the high
performance threshold.
Wal-Mart
embraces participatory leadership in most company decisions as is embedded in
the organisational culture (Buczak, 2011). More steps to ensure transparency in
their decisions such as the procurement decisions is a further illustration of
this fact. This is coupled with the reduction of the power distance where the
company encourages frequent interaction between the juniors and the managers
(Walton, 1993). An open-door policy is maintained at all times hence allowing
for more effective communication between the managers and the employees.
Effective communication has been identified as one of the pillars of ensuring
motivation levels are kept high in the organisation and is therefore central to
the leadership and management practices at Wal-Mart (Patel, Radicevich and Tea,
2009). The dominating philosophy of the founding CEO Sam Walton has largely
been maintained by his successors Lee Scott, Mike Duke and Supervalu Herkert
(Orgel, 2010). A constant variable in the leadership styles of all these CEOs
has been the participatory element. Elements of authoritarian leadership were
also evident especially in the face of the recent recession which presented the
top executive with the duty to come up with prompt strategies that would
effectively put the company back to the path of growth (Orgel, 2010). Some of
the decisions have due to their nature unitary. Decisions such as the one made
by Herkert which mainly dealt with major changes in the organisational
structure and the composition of the management at the executive level was one
that would have taken longer than desired due to the expected influence of the
invested interests among the holders of the positions in question (Walmart,
2011). There was need to quickly revamp the company performance and prompt
changes in the organisational structure called for some level of authoritarian
leadership.
Moreover,
there was a general presumption that the current senior level managers had
exhausted their creativity and injection of new ideas through the new CEO was
necessary.
Leadership
styles at work vary marginally from one region to another. The global company
assigns a level of autonomy to the different country subsidiaries which are
then free to adopt leadership styles that are best suited by the socio-cultural
settings in which they operate (Huey, 1992). Some of the regions with
significantly different leadership styles include the Japanese and Indian
subsidiaries. The societal cultures in these countries tend to lean towards the
high power distance where the leaders are expected to solely come up with
policies which are passed on to the juniors who carry out the implementation
without question (O’Regan and Ghobadian, 2004). The influence of the parent
organisation however weighs heavily on their practices hence discouraging such
subsidiaries from adopting pure authoritarian models. Some measure of
democratic leadership is practised albeit to a limited extent. The subsidiaries
mentioned above have also realigned their management practices to put a little
more emphasis on group contribution where reward systems recognise the
contribution of the teams as opposed to their western counterparts who mainly
emphasise on individual contributions and achievements (Luthans and Stajkovic,
1999). The dominant leadership styles adopted by Wal-Mart have been influenced
by a number of factors. Key among these is the socio-cultural settings.
Analysts view one of the main contributors of motivation as the confluence
between the expectations of the employees with the leadership styles practiced
in the organisations (Barett, et al., 2004). Where there appears to be a
disconnect motivation levels fall. The USA is dominated by a largely democratic
society that expects some measure of inclusion in the decision making processes
and a certain threshold in the transparency in the decision making processes
(Barett, et al., 2004). Accordingly, they seem to feel more fulfilled when they
are empowered to make certain decisions concerning their work, and are involved
in the decision making at the stage of the wider organisation. This can be
interpreted by analysts as the main reason why Wal-Mart in the USA is mainly
run using participatory and mainly democratic leadership style. The nature of
the retail trade is also increasingly competitive. This industry rivalry
reduces the ability of companies to make profits from the prices they charge on
the goods sold and prompts the players to turn to internal mechanisms of cost
cutting while remaining largely effective. One of the areas that have been
targeted by Wal-Mart through their participatory model has been in the area of
market research. The company uses its leadership model to tap into the
intelligence of their 2 million employees who, through their interaction with
the customers, can detect any changes in preferences and communicate the same
to the decision making organs of the company for consideration (Walmart, 2011).
The company therefore collects crucial market intelligence without necessarily
engaging in costly market research exercises. This helps solidify their
strategic position in the market.
Competitive
advantage derived from the optimisation of internal capabilities requires that
such capabilities be difficult to replicate by competitors. Wal-Mart has
perfected the use of a sound leadership model that uniquely contributes to the
high motivation levels among their staff which in turn allows them to maintain
a competitive advantage that sees the company retain its position as the
largest and most preferred retain chain globally.
This
chapter makes a conclusion of the paper by highlighting the main findings in
this study. The conclusions have been organised around the research questions
where the findings of the study in relation to the questions have been explicitly
stated. The chapter also provides recommendations both for the leadership
practices at Wal-Mart and for future studies.
The
importance of employee motivation to organisations is a well acknowledged fact.
It has been established that organisations tend to perform better when the
motivation levels among the employees are higher. Organisations are
increasingly looking inwards to build a competitive advantage by improving
their capabilities and exploiting the unique abilities of their employees. This
philosophical outlook forms the basis for organisations to concentrate on
developing leadership styles that would best contribute to the motivation
levels among the employees. Motivation among employees is mainly affected by
financial factors. Non financial factors are also significant. The financial
factors include the adequacy of wages provided which should be able to enable
the employees to live a dignified life. The factors may also include a merit
system and the provision of performance based bonuses and commissions. These
factors are known to greatly contribute to the intensity of motivation. These
measures can however not sustain motivation over a long period of time by
themselves. Non financial motivators held sustain motivation over a longer
period of time. Such factors include job rotation, recognition, empowerment,
and involvement in decision making. With these factors, employees find their
jobs more fulfilling and contribute greatly to their sense of belonging in the
organisation.
Leadership
styles contribute significantly to the levels of motivation in organisations.
The most common leadership styles include the authoritarian model, the laissez
faire, and the democratic model. The authoritarian model involves the decision
making by the managers where such managers generate all the policies and
decisions which are then passed on to the subordinates to do the
implementation. The democratic leadership on the other hand exploits
participation with subordinates when coming up with management decisions.
Laissez faire refers to a leadership style that emphasises little or no control
over the actions of their subordinates. The choice of leadership style to be
embraced depends on a number of factors. The most important factor in this is
the effect that such leadership styles have on the motivation levels among the
employees. Employees tend to be highly motivated if the leadership styles in
their organisations are in consonance with their expectations. These
expectations are influenced by both the cultural values of the society around
them and the practices that have already been embraced as part of the
organisational culture in their organisation. The need to live up to the
expectations of the employees perhaps explains why the leadership styles at
Wal-Mart have remained relatively constant despite the fact that the company
has been through numerous changes in the composition of its top management
since the retirement of their founding CEO Sam Walton. Organisations in
democratic societies tend to embrace democratic leadership styles while those
in authoritarian societies do the same.
Wal-Mart
embraces the essentials of democratic governance especially in the USA and the
subsidiaries based in the Western Europe countries. The leadership styles at the
company have mainly been influenced by the organisational culture which had
been developed over time by the founding CEO Sam Walton.
The
study established that the employees at Wal-Mart are generally pleased with the
leadership practices at the company. The study’s assessment established that
motivation levels at the company are high and are used as the company’s source
of competitive advantage. The internal capabilities are reputed to be one of
the key factors that have contributed to the growth of the company to become
one of the largest corporate organisations in the world. The leadership styles are however not purely
democratic. Some measure of authoritarian leadership is practiced. This is due
to the strict responsibility lines that are allocated to the officers who are
in many cases held responsible by the decisions made in their departments. As a
result, the leaders encourage participation but have the final say in the
decisions to be taken. This delicate balance is what gives the company the uniqueness
it possesses: decisions made are reliable, and the employees readily accept and
internalise them. From a review of the secondary data assessed, this research
established that the company embraces different leadership styles in its
various regional subsidiaries. These modifications help ensure that the
expectations of the employees which are most often informed by the cultural
contexts in which such subsidiaries operate. For instance, subsidiaries located
in Asian countries such as in Japan and India tends to lean toward
authoritarian styles despite the global influence that leans towards democratic
leadership.
The
study recons that a qualitative assessment of leadership practices may not be
sufficient to draw conclusions on financial performance and to what extent the
leadership styles embraced impact on the performance of the organisation. The
study recommends the development of investigative models that allow for the
establishment of the effectiveness of various leadership styles in financial
terms in different countries with distinct socio-cultural preferences.
Secondly,
given the limited scope of this study, which only focused on the company’s USA
branch, the study recommends that a more comprehensive study be conducted to
establish the various leadership and management practices in the different
subsidiaries of Wal-Mart.
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