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        Brief Analysis On Different Organizational Behaviors Between Wal-Mart and McDonald’s

        2009-12-31 00:00:00全毅文

        中圖分類號:C912.6文獻(xiàn)標(biāo)識碼:A文章編號:1673-8209(2009)10-0236-03

        At present, increasing companies appeared on the market, and market is just like a big melting furnace. If company can not lay out themselves, company will be eliminated. Many of companies are out of use in the market, but the Walmart and McDonald’s talented showing itself in numerous markets and held water in this melting furnace. And how did they achieve their success? General speaking, the organizational structure, culture and perfect management are the most important factors for the two companies. In my report, I will use the Walmart and McDonald’s case and compare the two companies’ different cultures, structures and managements, and begin to describe the three areas. First chapter will talk about companies’ background. Second part will describe the comparison of companies. And third chapter will discuss the development of companies. Now we will walk into the world of Walmart and McDonald, and experience the success of the two enterprises jointly.

        1 The Wal-mart and McDonald’s corporate background

        Walmart Stores, Inc. was founded by American retail legend Sam Walton in Arkansas in 1962. ?Forty four years later, Walmart serves more than 176 million customers per week. ?It is the world’s largest private employer and retailer with over 1.9 million associates worldwide and more than 7,000 stores in 14 countries.

        Walmart came to China in 1996. ?The first Supercenter and SAM'S CLUB were opened in Shenzhen, Guangdong Province. Today, there are 104 units in 55 cities, including 99 Supercenters, 3 SAM’S CLUBs and 2 Neighborhood Markets. Across China Wal-Mart employs over 50,000 associates.

        As an outstanding corporate citizen, Walmart actively gives back to the community and has donated funds and in-kind support worth more than RMB36 million to local charities and welfare organizations over the past 12 years. As an organization, we also commit ourselves to environmental protection and sustainable development with our Sustainability 360 drive, which we integrate throughout our Chinese business and among our thousands of suppliers.

        McDonald's was established on May 15, 1955 in the United States. Founder is Ray Kroc. At that time, there is only one restaurant. But at present McDonald's company has more than 20,000 restaurants in more than 100 countries and regions. And these restaurants were operated by the licensed operators and the branch of McDonald's. Thus, it has become the largest fast-food restaurants in the all world. Every day McDonald's will face the 30 millions people. In Beijing Wangfujing, there opened the first McDonald's restaurant in April 23, 1992.

        2 The Walmart and McDonald’s Organizational structure

        Organizational structure refers to the division of labor as well as the patterns of coordination, communication, work flow, and formal power that direct organizational activities. An organizational structure reflects the organization’s culture and power relationships. Nowadays, for Walmart, it belongs to division structure, and there are a total of 41 regions: 35 Wal-Mart regions and six Sam's Club regions. Each region is supervised by a Regional Vice President (RVP), who is based in Bentonville and travels for three weeks out of each month to the region. Because the regional management is based in Bentonville, Wal-Mart has an unusually high concentration of executives and managers based in the Home Office. Regional management meets at least weekly with Bentonville-based corporate and executive leadership to discuss developments in the individual stores. Each region, in turn, contains approximately eleven districts; each district contains approximately six to eight stores. Each district is run by a District Manager, who lives in the field. At Sam's Club, district managers are called Directors of Operations, but the job responsibilities are identical. On personnel matters, District Managers work in conjunction with Regional Personnel Managers (RPM). The RPMs are based in Bentonville and are responsible for recruiting and assist in selecting store management and monitoring personnel policies.RPMs visit the stores on a weekly basis and submit reports to five People Directors in the Home Office. Each Wal-Mart store has the same job categories, job descriptions and management hierarchy. At the bottom of the ladder, the primary entry level hourly positions are cashier, sales associate and stocker. The first step up is hourly Department Manager. Other hourly supervisor positions include Customer Service Manager (CSM), known as Check-Out Supervisor (COS) at Sam's Club. The highest level hourly manager at Wal-Mart is Support Manager. The next step up is to management trainee, a four-to-five month program which prepares employees for positions as Assistant Managers. The first salaried management position is Assistant Manager. Each store has several Assistant Managers, varying with the size of the store. The next level is Co-Manager, a position used only in larger stores. The top store position is Store Manager, called General Manager in Sam's Clubs. The stores contain 40-50 different departments.

        McDonald's has its own organizational structure, which is functional structure. Functional organization structure is the most common form of organizational, its essence is divided all the task of corporation and submitted to the corresponding departments do it. A functional structure organizes employees around specific knowledge or other resources. Employees with marketing expertise are grouped into a marketing unit, those with production skills are located in manufacturing, engineers are found in product development and so on. One important advantage of functional structures is that they foster professional identity and clarify career paths. Moreover it is benefited to encourage department’s economies of scale. Functional structures also have limitations. The main disadvantage is that changes of external environment are too slow in responding, because this response needs inter-departmental coordination. For this reason, functional structures tend to have higher dysfunctional conflict and poorer coordination with other work units. In this organization, everyone pays attention to the leader, waiting for high-level decision-making, and lack of self-awareness to solve the problem. McDonald's is catering enterprises. And division of specialization is core. Therefore functional structure is benefited to management for McDonald's.

        Obviously, the organizational structures of Walmart and McDonald's are different, because they belong to different organizations in different fields. Walmart belongs to the industry; we can know from the above analysis. So the divisional organizational structure is more suitable for Wal-Mart’s management, and the functional structure is more suitable for McDonald's chain.

        2.1 The Wal-Mart’s and McDonald’s Organizational culture

        A nation's development needs the support of a nation's spirit. A corporation also needs spiritual and cultural ideas to guide its operations and development, and it also needs accurate “positioning” which effectively evades industry risks. Without the support of cultural ideas, all corporate operating activities will be lack of its “soul” and it will lose its direction. Today, in the aspect of corporation management, the people are paying more attention to the strength of non-material factors. They begin to put it to the first place. “Corporate culture” has become the core of corporation management and it is basic to corporation development.

        Generally speaking, corporate culture is significant for the company, also important for the manager to manage the members in the company. The organization culture beliefs, values and assumptions are the most essential elements. We use an ice mountain to describe the elements of the organizational culture. The part on the surface is physical structures, rituals and ceremonies, stories and legends and languages. The part below the surface is beliefs, values and assumptions. Also corporate culture is the result of introjections of social culture and organizational managing culture and the spirit wealth that created through the process of management. Corporate culture has the function of attraction and cohesion. It can unify the purpose, need and interests. It can be said that the corporate culture reflects the spirit, style and value standard of corporation.

        2.1.1 Walmart corporate culture

        Wal-Mart Stores, Inc. was founded on principles developed by Sam Walton. These principles carried out every day by hard-working and friendly associates have created a unique corporate culture that is a key to Wal-Mart's competitive edge. The basic beliefs guiding Wal-Mart Stores, Inc. are:

        Three Basic Beliefs

        Respect for the Individual

        Every associate's opinion is respected. Managers are considered \"servant leaders\" who help new associates realize their potential through training, praise and constructive feedback. An \"open door\" management philosophy encourages associates to raise questions and concerns in an open atmosphere.

        Service to the Customer

        The customer is the boss. Everything possible is done to make shopping at Wal-Mart and SAM'S CLUB a friendly, pleasant experience. The \"Ten-Foot Attitude\" means that associates are to greet each person they see. The \"Satisfaction Guaranteed\" refund and exchange policy allows customers to be fully confident of Wal-Mart and SAM'S CLUB's merchandise and quality.

        Strive for Excellence

        Wal-Mart and SAM'S CLUB associates share an exceptional commitment to customer satisfaction. At the start of each day, store associates gather for the Wal-Mart or SAM'S CLUB cheer and review sales from the previous day, as well as discuss their daily goals. \"The Sundown Rule\" requires a continual sense of urgency, with questions asked in the morning answered before the end of the day.

        Employee well being was also given a lot of importance and the company tried to project an image of a socially responsible entity. In over four decades of operation, Wal-Mart managed to retain most of the elements of culture it had when it first started out, as well as the entrepreneurial spirit which often drives startup companies to success. The fact that the company's growth rate was often in double digits bears this out. Wal-Mart's culture was characterized by an orientation towards customer service and providing the best value at the lowest prices

        2.1.2 McDonald's corporate culture

        McDonald's is most famous fast-food chain in the world. And its success based on its own equal and innovative organizational culture. Croker, president, said, \"I would like to authorize, and I always respected that some people who can think of a good idea.” Usually, He can encourage young managers to made different ideas and carry out. In McDonald every manager has own the development of space, rights and responsibilities. Moreover he also encourages them to hard work. Under the decentralized system, the McDonald's manager shows passion and high spirit of cooperation for the work. Companies also make different types of creativity towards the same direction development. McDonald’s senior manager’s meeting rooms, which is called the \"war room”. Accurately, the name reflects the managers of McDonald's the spirit of cooperation and teamwork in the high intensify of competition in the fast-food industry. These conference rooms have no any expensive things, but fully reflect the McDonald's “equal and cooperation” idea. Croker is a very friendly person. He obeys work ethic, belief in savings, thrifty, and the simple life. So that he won trust of all the company's staff. Croker treat his staff like a father or mentor, the same time providing generous help and some life principles. Now, McDonald's spent ten million of dollars to invite the staff and their family members have dinner in each year. So, all McDonald's staff will be tightly together.

        Obviously, Walmart organizational culture tends to be task culture. This culture is put resources and people on the right place and let them work. This is a team culture, its use teamwork to improve the efficiency of work. This culture has the strong adaptability. In facts, it proved that task culture adapt Haier in the modern time. But, McDonald's organizational culture tends to be the power culture. This cultural organization relies on trust and feelings to achieve high efficiency. This organizational culture is adapting McDonald’s.

        Generally, in the 21st century, with the development of knowledge-based economy and globalization of economy, competition among corporation is reflected in the cultural competition. The corporate culture is playing an important role in corporate survival and development, and it has become the cornerstone and key factors in corporation competition. The research and practice approve that corporate cultures are important under such circumstances. Creating a people-oriented, innovation-based corporate culture will be able to provide the most powerful and long-lasting platform for strategic management.

        2.2 The Walmart and McDonald’s Organizational management

        Management is coordinating work activities so that they are completed efficiently and effectively with and through other people.

        2.2.1 The Wal-Mart’s Management

        Wal-Mart success of the 10 corporate governance principles:

        First, you must be devoted to your career. No more than love the job, you can try you best and complete your work. And through working on the enthusiasm infected everyone around us, but also improving their efficiency.

        Second, we must share profits with employees. Do by your employees just as partners; these employees will own the business as a partner.

        Third, we must continue to motivate staff, but Walmart rely on solely money and it would like lots of interesting new ways to design, such as a number of challenging goals to motivate staff, and encourage competition among colleague, and carrying out score.

        Fourth, communicate with the staff as possible, these staffs understand more deeply, they are more concerned about the work, and then whatever can not be difficult to stop them.

        Fifth, thank to these staffs do everything for company. Walmart often will feel grateful the contribution made by employees. Wal-Mart believes that no matter what country, what background, what religion you are, when someone appreciates the performance about you, you will be very pleased.

        Sixth, promoting celebrate every successful and make fun from failure. No matter when you should be full of passion, it is necessary to look for fun at work.

        Seventh, we must listen to the views of the staffs. Particularly in the retail industry, no one knows the detailed information, but the most grass-roots workers understand. So, listening to their views is very important.

        Eighth, Walmart must go beyond the expectations of customers, this is the direction for Walmart. As long as Walmart can do these, we can continue to attract customers, so sales also will rise.

        Ninth, Walmart saves more cost-effective than competitors. It controls strictly costs, loss of control. Since the \"daily parity\" is a customer of Wal-Mart's commitment to change, and that in order to achieve this commitment, it is necessary to have a low cost.

        Tenth, must be upstream and open a new path, do not follow the beaten track.

        2.2.2 McDonald’s achieved Six Sigma on that day

        A technical measure of how many unhappy customer experiences per million opportunities is the concept behind Six Sigma. For example, if on any day McDonald’s served one million customers, how many of them had a bad or unsatisfying experience like poor food quality, wrong food order etc. If only three (yes, three) customers were unhappy with their experience, then McDonald’s achieved Six Sigma on that day. This is because Six Sigma is equivalent to only 3.4 bad customer experiences for every million opportunities. If 233 bad customer experiences occurred per million McDonald’s customers then McDonald’s would be a Five Sigma company. If 6,210 customers had experienced soggy French fries or an inaccurate order then McDonald’s would be a Four Sigma company. If 66,807 McDonald’s customers opened their lunch bag and found a Big Mac when they had ordered a Quarter Pounder, McDonald’s would be a Three Sigma company. So, McDonald’s use this approaches to management to get the successful.

        3 The Walmart and McDonald’s corporate development

        The Walmart and McDonald’s have its own unique and appropriate the organizational structure, culture and approaches to management. These elements have an impact on their company’s development. Due to they have the advanced and scientific organizational structure, culture and perfect management. So, they can be healthy and rapid development. As a result, finally Walmart and McDonald’s achieve success.

        Conclusion

        Through analysis the two companies, we can understand the stature about organizational structure and organizational management for a prosperous enterprise. If a company wants to get succeed, it must own a suit of congruous organizational structure and organizational management. None but have these factors company can remain invincible in numerous brands, and grow in strength constantly organizational culture, so that a company can become more prosperous in fierce competition.

        Bibliography

        [1] Steven L.McShane /Mary Ann Von Glinow. (5/2008). Organizational Structure and Design. In: Mary Ann Von Glinow Organizational Behavior. 3rd ed. Beijing: China Machine press. P440-468.

        [2] Steven L.McShane/Mary Ann Von Glinow. (5/2008). Organizational Culture. In: Mary Ann Von Glinow Organizational Behavior. 3rd ed. Beijing: China Machine press. P470-495.

        [3] Steven L.McShane/Mary Ann Von Glinow. (5/2008). Organizational Change. In: Steven L.McShane Organizational Behavior. 3rd ed. Beijing: China Machine press. P496-522.

        [4] no author. (17Jan 2007). Organization culture. Available: www.google.com.Last accessed 12 Nov 2008.

        [5] no author. (23 Feb 2007). Organization structure. Available: www.google.com. Last accessed 11 Nov 2008.

        [6] no author. (16 Feb 2007). Organization management. Available: www.google.com. Last accessed 08 Nov 2008.

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