Managing Communication Knowledge and

Information
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For analyzing the topic on hand I have selected Wal-Mart. Wal-Mart is the worlds leader in retail
business enjoying the majority of the market share in the retail business. The company has occupied
this position through its dedication towards satisfying customers needs and wants in better way as
compared to competitors by providing superior quality products at competitive prices.

Decision Making:
As information technology is advancing with the passage of time, organization is learning new means
of transacting its business. These new areas include innovation, problem solving and decision making.
A decision is a choice made between two or more alternatives (Robbins & Coutler, 2004). According to
George and Jones, decision making may be defined as the process by which members of an
organization choose a specific course of action to respond to both problems and opportunities (George
& Jones, 2005). An example of decision of Wal-Mart will be to price its various offerings. The manager
has certain alternatives for the pricing decision. Decision maker across organization different types of
condition, each required different strategy towards decision making. Organization usually takes
decision in response to a problem or an opportunity. This can be of two types: structured and
unstructured. Structured problem are routinely encounter by manager and are to some extent straight
forward. On the other hand unstructured problem non-routine and manager lakes the needed
information to solve problems. The various types of decision a manager makes in his capacity as
decision maker has been summarized in Figure 1.
Figure 1: Decision Making

Programmed Decision:
Programmed decisions are those decision that manager makes in response to structure problems and
routine in nature. The decision maker can make this type of decision with relative ease as compared
non-programmed decision because the information needed to solve the problem of an organization is
available. Decisions made at middle level and lower levels of management by Wal-Mart are mostly
non-programmed decisions. Programmed decision can be divided into three types:

Procedure:
Series of interconnected steps that are taken in chain to solve a structured problem is called
procedure. An example of procedure will be the recruitment procedure for a new employee followed by
Wal-Mart HR Manager.

Rules:
Rules are unambiguous statements that set parameters for a management action. Simply the dos
and donts of an organization can be called rules. The example of rules for Wal-Mart will be the
statement regarding the absenteeism.

Policy:
Policy set out boundaries within which a manager can exercise his power of decision making.

According to Robbins and Coutler policy is a guide that establishes parameters for making decisions
rather than specifically stating what should or should not be done (Robbins & Coutler, 2004). An
example of policy for Wal-Mart will be the firing decision used by the manager in the circumstances
when his subordinates dont obey his orders.

Non-programmed Decisions:
Non-programmed decisions are those decisions that are taken in response to unstructured problems.
These problems are usually non-routine in nature and the problem involved is unusual, and the
available information is incomplete and ambiguous. Non-programmed decision requires management
creativity and is best handled by professional managers who have the ability to strike through.
Decisions made at the top level of the organization hierarchy of Wal-Mart are usually non-programmed
decision.

Information and Decision Making:

Information is the vital component for the decision making. In fact the success or failure of decision
rests on the information on hand. Situation in which a manager have full information regarding the
problem is available is called certainty (for example what revenue Wal-Mart will earn from the sales of
Fairy washing powder if the price is increased by 10%) and where the range of information is neither
perfect and neither imperfect it is called risky decision making (for example what revenue the
organization will earn if it increase Fairy Washing Powder by 10% per unit) while the situation where
the decision maker have no information regarding the problem on hand is called uncertainty (for
example what revenue Wal-Mart will be earning after 5 year from all the business the organization
undertakes).
It means that the outcome of a decision (certainty, risk, and uncertainty) rests on the available
information regarding a decision making situation. The chances of the success of decision increases
as the manager have more and more information.

Internal and External sources of Information:

An organization required two types of information: internal information, and external information.
Internal information are gather and used for the decision making purpose inside the organization while
the external information are gathered by managers that provides an organization intelligence
information regarding the outside parties including customer, society, competitors, government etc.
Usually organization use some sort of information system to develop and maintain the internal sources
of information. For example of Wal-Mart used an express Management Information System (MIS) for
its information gathering and dissemination purposes, this system will provide the internal information
needed by manager in decision making.
According OBrien and Marakas an information system can be any organized combination of people,
hardware, software, communication network and data resources that stores and retrieves, transforms
and disseminate information in an organization (O'Brien & Marakas, 2001). It means that the internal
sources of information can be people (management and employees working in Wal-Mart), hardware
(computer systems, fax machine etc used by Wal-Mart), and software (databases, spreadsheets, word
processor etc used by Wal-Mart) communication networks (Local Area Network (LAN), Wide Area
Network (WAN), intranets, extranets etc. used by Wal-Mart), and data resources (Management
Information System (MSI), Decision Support System (DSS), Executive Support System (ESS) etc used
by Wal-Mart).
The external sources of information provide most valuable information regarding the organization
environmental factors. Wal-Mart environmental factor consists of economic factors, demographic
factors, technological factors, political-legal factor, and socio-cultural factors. This information is of very

importance for the business organization because the organization environment serves as an obstacle
between the firm and its target market. Through proper scanning of the environmental factors
managers are able to devise his strategies keeping in view the dynamic environment (Kotler &
Armstrong, 2010).

Examples of Decision Making:

An example to clarify the decision making process at Wal-Mart will be a programmed decision: whether
to decrease the price for Fairy washing powder by providing 10% discount or continue with the existing
pricing. The first step will be to identify the problem (the stagnant sales), Wal-Mart then need to identify
the objectives of the decision making (to increase the sales of Fairy), the generation of alternatives (an
example will be to reduced the package size, to reduce the price, to offer additional product(e.g. bath
soap) free with Fairy etc), evaluation of alternative on the basis of decision criteria and selection and
implementation of alternative that may have the best outcome (sales maximization for Wal-Mart).
An example non-programmed unstructured decision making for Wal-Mart may be a decision in case if
the front disk officer did not report at work on a particular day. This is non-programmed decision
because the organization usually did not encounter such problem. Now to solve the problem through
the process of decision making Wal-Mart may make some adjustments in the available workforce by
assigning the work to an individual who have the needed experience to perform the task without having
serious consequences to the overall system.

Personal Networking and Decision Making:

According to Foster and Seidman personal networking, is the outcome of each individuals social
decisions that is the outcome of a set a set of choices by each individual in the population (Foster
& Seidman, 1998). By using the social network an individual working at decision making position in an
organization is better able to make decision due to the variety of information that are at the disposal of
decision maker. When a manager who is responsible for making key decision takes the input of various
individual through his personal network he is better able to make sound decision due to input from the
various people that form his personal network (EMC, 2010).
For example a manager is making decision that involved issues related to workforce diversity. If he
reject a candidate that he think is not fit for the job, he can sue the organization as well as the manager
for violating laws related to equal employment opportunities (Stacy, 2002). In this case if the manager
who makes the decision took the needed input from a lawyer who is a member of his personal network
the situation could have been vary change as the one that has been experienced by the manager.
In organization there are two types of relationship: one that is governed formal authority is known as
organization structure and in the informal relationship that is governed by organizational culture.
Organizational culture bridges the informal relationship between the various human resources that
works in various department of the organization. The organization culture helps manager to form
personal network across the organization, that in turn helps the organization through informed decision
making that takes into account the organization long-term strategy as well as the organization
environmental factors into account when making decision that affect the future of the organization. As
pointed out by Pedersen and Larsen in personal network each player in the network acquires specific
knowledge from other players for decision support (Pedersen & Larsen, 2001).
When many people have their inputs in the organization decision, the quality of decision making
automatically enhances due to collective thinking, judgment, and evaluation of future through
consolidated information that are obtained through personal network by the manager. When such
characteristics exist, it leads to effective and efficient decision making that have synergistic effects and
more chances of being an accurate and reliable decision.

Communication Process in Wal-Mart:

The process of transmitting ideas to someone is called communication. Communication can occur
through different processes and methods and can also be classified on the channel used and the style
of communication. On the basis of channels communication can be divided into verbal communication
(communication in written or oral form) and non-verbal (communication through body language,
expressions, visuals etc.)
Oral communication is the transmission of messages in face-to-face conversation. For example a
meeting of inventory management department at Wal-Mart has been called in which all the different
managers of inventory management department took part. At times oral communication lead to clear
communication results as the respondents can ask question and the other party can provide immediate
feedback. On the other hand oral communication may lead to some miscommunication as no written
records are kept for the communication. For example the Shift Manager writes memos to all the
functional heads regarding the new office timing. In written communication the sender and receiver
exchange messages in written form, but this method served from the fact that the parties in the
communication process may not be able to provide immediate feedback. According to Leavitt written
communication need careful preparation of messages because anything put in writing become a public
record (Leavitt, 1991). On the basis of style communication can formal and informal. Formal
communication use organization channels to transmit or received messages. For example the
communication between Vice President Marketing and Marketing Manager of Wal-Mart regarding the
new promotion budged can be called formal communication. Formal communication can be upward,
downward, or horizontal. In upward communication (when Marketing Manager writes to Vice President
Marketing)a subordinate transmit a message to a superior using the organizational structure of the
firm. On the other hand in downward communication (from Vice President Marketing to Marketing
Manager) a superior (Vice President Marketing) transmits a message to subordinate (Marketing
Manager), while the horizontal communication is between two peers working at the same level of
organizational structure (For example the communication that took place between Brand Manager
Group A and Brand Manager Group B).
The informal business communication took place between the organizations as a result of strong WalMart culture that shape the informal relationship between the various members of the Wal-Mart. In
informal communication member of Wal-Mart exchanges information through in unofficial manner using
grapevine. An example of the informal communication in Wal-Mart will be the discussion regarding the
store layout at the lunch between Marketing Manager of Wal-Mart and R&D Manager of Wal-Mart
(Swidler, 1987).

Improving Communication at Wal-Mart:

For effective communication in Wal-Mart it is vital to recruit, train and develop suitable people across
the organization. The communication within and outside the company will have impact only when the
receiver (one who receives and interpret the message) pursue exactly what the sender (a person who
transmit and idea or message) mans. This depends a lot on the people inside the organization
(Bavelas, 1990). If a group inside Wal-Mart are talented and have mature personality they will interpret
the message by using their professional skills acquired through various training and development. If
the case is opposite, the organization will be facing difficulties in every wake of life. Communication
skills of employees will also add goodwill to Wal-Mart (Usray & Matz, 2006).
People in today organization serve as a source of competitive advantage. In fact the success and
failure of an organization depends on what type of people the organization has. If the organization has
professional people in various departments, they will communicate effectively with each other. In this
case the organization will be able to use the proper communication process that will ensure that the
target understands what is stated and implied in the message. Through such a channel, a source
develops a message, transmit it to an audience via some form of medium, and obtain feedback from
the target.

On the other hand if members of the organization lack professional competencies it will affect the
individual work as well as the organization as a whole. As the members of the organization will not be
able to transmit effective ideas in efficient manner as well as not understand the idea that they have
received from other sources. The organization will not be able to achieve its goals and objectives as it
will be wandering here and there due to absence of proper communication.
The organization that employee professional people in the communication process are able to
complete their tasks in more efficient manner, as they are able to decrease certain costs (e.g. time,
printing, telephone etc). These costs savings adds to the value of the firm because fewer expenses are
shown in the income statement. Moreover the organization having proper people in the communication
process is able build an overall image for the organization. The image that has been built resulted from
the use of proper communication method, by effectively utilizing organizational resources.

Weakness in Wal-Mart Communication System and Suggestion for

Improvement:
Wal-Mart is using a diverse structure. Due to this structure the organization is experiencing some
definite problem in the communication process, because the organizational structure of Wal-Mart is
neither based on function, nor on product or region. It is somewhat complex and a combination of all
the three structureproduct, function and geographic organizational structure.
Due to this structure the organization may experience some communication problems, because people
in a department will be having different background. Due to this background there will be high chances
of miscommunication between the members of the organization. The organization may also experience
in allotting tasks to various employees, motivating them in professional manner, and agreement on
tasks goals and objectives. Due to these problems it is suggested that the organization should go for
functional structure (Lehman, Carol, & Debbie, 2007).
A functional structure is an organizational arrangement where people that perform the same function
(for example marketing) are grouped together and called department. When professional having the
same background works together the chances of miscommunication decreases, and people can
understand one another in a more coherent way (Kalkota & Marcia, 2001). Moreover the motivation of
employees also increases when they work with people of the same background while organization is
also able to achieve its mission and objectives in a more coherent way. Due to these reasons Wal-Mart
should change its organizational structure and should use the functional arrangement of organizational
structure.

Information Use by Wal-Mart:

According to OBrien and Marakas, an information system can be any organized combination of
people, hardware, software, communications, networks, and data resources that stores and retrieves,
transform, and disseminates information in an organization. (O'Brien & Marakas, 2001). Wal-Mart uses
a variety of techniques of information for collection, formatting, storage, and dissemination of
information. These information systems include the following:

Transaction Processing System (TPS):

TPS process data that have been resulted due to transaction, and update the firms database
accordingly. TPS may also helps the business by preparing various business documents including
sales invoice, inventory record sheet and other accounting statements.

Decision Support System (DSS):

DSS is used by organizations to provide support to decision makers by providing them relevant

information relating to a particular situation. Example of DSS is profitability forecasting by marketing

manager, information provided regarding product pricing decisions, risk analysis system etc.

Proposed Information System for Wal-Mart:

Although the information systems used by Wal-Mart (TPS and DSS) is fulfilling the needs of the
organization and serving the organization appropriately, but still there is some information gap that
needs to be fulfill. The organization is therefore suggested that besides using the above-mentioned
methods it should also use the following methods:

Management Information System (MIS):

According to OBrien and Marakas, management information system provides information in the form of
pre-specified reports and displays to support business decision making (O'Brien & Marakas, 2001). For
example procurement manager of Wal-Mart can use its networked computer and web browsers to get
instant displays about the inventory of various inventory items, and access the suppliers computer to
place orders for inventory items whose level have reached the minimum level of inventory.

Executive Information System (EIS):

ESS uses the key information of MIS, TPS, and DSS and other sources and furnished key information
to the organization top management to be used in decision making. An example of ESS for Wal-Mart
will be the monitoring information related to a particular competitor marketing activities from MIS, DSS
and other sources and then furnishing this information to organization the Marketing head of Wal-Mart
for the appropriate action. The head of marketing well then use the stated information to tailor his
marketing strategies in efforts to tackle the competitor.

Advantages of the proposed Information system:

Support Business Processes:
The proposed MIS and EIS will enhance the organization information resources, and the Wal-Mart will
be able to use it as a competitive advantage. The company can use these systems to support its
various functions including finance, marketing, production etc.

Support Decision Making:

The proposed MIS and EIS will also help Wal-Mart store managers and other business professional to
make better decision. For example, decision on what lines of electricity need to be added or
discontinued, or on what kind of investment they require, are typically made after an analysis provided
by MIS and EIS (Christenson & Clayton, 1997).

Strategy for Improving Access to Information and Knowledge:

In the last two decades, the world has experience extraordinary changes the way information were
created, stored, disseminated and used. Information is now been cited in management literature as a
vital resource like financial resources, human resources etc. An organization like Wal-Mart should use
the following strategy to get maximum of the information resources and the associated knowledge.
Digital technology used by organization has change the way information was created and used by
organizations. This has created new opportunities as well as new threats for a business organization.
Strategies that were used previously did not work in today environment (Sambamurthy, Bhahrdwaj, &
Grover, 2003). As technology is evolving with the passage of time, the strategy for strategic leadership
in the field of information and knowledge management need to be reconsidered. The extraordinary

speed of information technology coupled with change in organization culture has resulted to an
inaptness of information systems between various functional departments, and a need for investment
in strategic information more effectively (Stacey, 2003). The organization should focus its efforts on
creating effective management and leadership. The experience of these individual will give the
organization experience that can be used more widely to use it for competitive advantage.
Managers that will lead the organization of tomorrow need to be knowledgeable. Good knowledge on
the part of manager requires that the manager should be involved in maximizing the value of
information and turning it into knowledge, that will results in more informed decision making (Wiig,
1997). Organization information management should be linked with good knowledge management. If
this is not the case the value of information as an asset of the organization will be undermined, and the
organization will thus not be able to provide cost effective and efficient services to its target market.

Conclusion:
The process outlined in the paper (effective decision making, communication and information and
knowledge management) will help Wal-Mart to achieve better result and enhance its competitive
advantage in its quest to realize the organization mission more effectively and efficiently.