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INTRODUCTION:

An organization is a place where a person or group of people intentionally organized


their activities for fulfill their mission. An organization future depends on its planning
process. Different organization has different aims structurally those are different as
well. That's why different organizations activities are also different according to their
mission, vision and values. But all organization intention is to achieve their goal by
their strategic planning process. All members of an organization always have some
image in their minds about how the organization should be working, how it process
should appear when things are going well.

What is Organization?
An organization is a deliberate arrangement of people to accomplish some specific
purpose. Your college or university is an organization; so are fraternities and
sororities, government departments, churches, Amazon.com etc. these are all
organization because they all share three common characteristics.
First, each organization has a distinct purpose. This purpose is typically expressed in
terms of a goal or a set of goals that the organization hopes to accomplish. Second,
each organization is composed of people. One person working alone is not an
organization, and it takes people to perform the work that's necessary for the
organization to achieve its goals. Third all organizations develop some deliberate
structure so that their members can do their work. That structure may be open and
flexible.
"When two or more people get together and agree to coordinate their activities in
order to achieve their common goals, an organization has been born".
Organizational structure:
According to mintzberg (1979) an organization is the sum total of the way in which it
divides its labour into distinct tasks and then achieves coordination between them .
Mintzberg (1983) his rational concept of an organization as composed of five
segments. Those are given as follows, Future aim of an organization
Every organization has a goal and for this reason organization tries to achieve their
goals by organizing their management with talent people. Present business market is
7

very competitive, changeable and fastest, so talent, competitive, motivated, skillful


and dynamic manager is most essential for achieving the goals of an organization.
Besides talented group of designers, engineers and fabricators are must needed for an
organization.

What Is Management?
Management as the process of coordinating work activities so that they are competed
efficiently and effectively with and through other people.
Specific parts of these definitions,
Process - represents the ongoing functions or primary activities engaged by in
manager.

Different levels of management:


Different organizations have different levels of management. Some organizations
have multiple levels of management. Such as, top management, middle management,
and first line supervisory management. Basically all organizations have more middle
managers than top managers (typically owners), who maintain the responsibilities of
all three levels. King size business more managers in at each levels to coordinate the
use of the organization's resources. Managers at all three levels perform all five
management level functions. In business top managers include the President and other
to executives, such as the chief executive officer (CEO), Chief Financial officer
(CFO), and Chief Operations officer (COO), who have over all responsibility for the
organization.[htt://www.associated content.com 22/02/10]

Manager or departments carry out assigned duties as required. Depending on the size
of the company there might be a someone who works with and through other other
people by coordinating their activities in order to accomplish organizational goal.

A manager is a person tasked with overseeing one or more employees or departments


8

to ensure these employees single, dual or triple management layer involved.


Managerial Titles

First-line managers - manage the work of non-managerial individuals who are directly
involved with the production or creation of the organization's products.

Middle managers - all managers between the first - line level and the top level of the
organization. These managers manage the work of first line managers.

Top managers- responsible for making organization wide decisions and establishing
the plans and goals that effect the entire organization. [Management, Robbins coulter,
seventh edition, prentice]
What do managers do?
A French industrialist" Henry Fayol" proposed that all managers perform five
management functions: such as,

Planning - defining goals, establishing strategies for achieving those goals, and
developing plans to integrate and co ordinate activities.

Organizing - determining what tasks are to be done, who is it to do them, how the
tasks are to be grouped, who reports to whom, and where decisions are made.

Leading - directing and motivating all involved parties and dealing with employee
behavior issues.

Controlling- monitoring actual performance, comparing actual to standard and taking


action if necessary. [Management, Robbins coulter seventh edition, Prentice Hall]
Decision Making Process:
Decision-making is the most essential things of an organization management. All
managers always like to make good decisions since they are judged on the out comes
of those decisions. All levels of managers an organization do participate for making
decision in different way. Such as, top level managers make decisions for their
organization's goals where to locate manufacturing facilities, or what new market to
move into. Middle and lower level managers make decisions about production
schedules, product quality problems, pay raises and employee discipline. Making
decisions is not something that just managers do; all organizational members make

decisions that affect their jobs and the organization they work for.[management.
Stephen p. Robins. Mary Coulter page-136] By following a set of eight steps
managers need to take decision. such as, identification of a problem, identification of
decision criteria , allocation of weights to criteria, development of alternatives,
analysis of alternatives, selection of an alternative, implementation of the alternative
and evaluating the decision's effectiveness.[ Management, ROBINS, COULTER ,
seventh edition, Prentice Hall]
What is talent management:
Talent management focuses on the skills and abilities of the individual and on his or
her potential for promotion to senior management rules. It refers to the process of
recruitment, selection, identification, attracting, training,developing and promoting
employees through an organization. Actually talent management is a model of
personal management. It also asses how much of a contribution the individualcan
make to the success of the organization.

CHAPTER II
Future Group

10

The Mughals were drawn to India by the lure of her fabulous wealth - India was
known

as

the

"Sone

Ki

Chidiya,"

literally

"The

Golden

Bird".

According to economic historian Angus Maddison - India had the world's largest
economy in the 1st century and 11th century, with a 33% share of world GDP in the
1st century and 29% in 1000 CE. During 1700 AD, Mughal era, Indias share was
24%, more than the whole of Western Europe. It came down to 3.8% in 1950s. Paul
Kennedy, in his highly regarded book, The Rise and Fall of the Great Powers:
Economic Change and Military Conflict from 1500 to 2000 estimates that in 1750
India's share of the world trade was nearly 25 percent. It came down to 0.5% in the
1960s

and

now

stands

at

around

1.5%.

The Indian economy is once again at the centre of the global attention. As domestic
consumption drives economic growth in India, Future Group hopes to play a pivotal
role in bringing back the Sone Ki Chidiya.

Future Group is one of the countrys leading business groups present in retail, asset
management, consumer finance, insurance, retail media, retail spaces and logistics.
The groups flagship company, Future Group (India) Limited operates over 10
million square feet of retail space, has over 1,000 stores and employs over 30,000
people. Future Group is present in 61 cities and 65 rural locations in India. Some of
its leading retail formats include, Pantaloons, Big Bazaar, Central, Food Bazaar,
Home

Town,

eZone,

Depot,

Future

Money

and

online

retail

format,

futurebazaar.com.
Future Group companies includes, Future Capital Holdings, Future Generali India
Indus League Clothing and Galaxy Entertainment that manages Sports Bar, Brew Bar
and Bowling Co. Future Capital Holdings, the groups financial arm, focuses on asset
management and consumer credit. It manages assets worth over $1 billion that are
being invested in developing retail real estate and consumer-related brands and hotels.
The groups joint venture partners include Italian insurance major, Generali, French
retailer ETAM group, US-based stationary products retailer, Staples Inc and UK11

based Lee Cooper and India-based Talwalkars, Blue Foods and Liberty Shoes.Future
Groups vision is to, deliver Everything, Everywhere, Every time to Every Indian
Consumer in the most profitable manner. The group considers Indian-ness as a core
value and its corporate credo is- Rewrite rules, Retain values.
Future Group is an Indian private conglomerate, headquartered in Mumbai. The
company is known for having a significant prominence in Indian retail and fashion
sectors, with popular supermarket chains like Big Bazaar and Food Bazaar, lifestyle
stores like Brand Factory, Central etc. and also for having notable presence in
integrated foods and FMCG manufacturing sectors. Future Retail (initially
Pantaloons Retail India Ltd (PRIL)) and Future Lifestyle Fashions, two operating
companies of Future Group, are among the top retail companies listed in BSE with
respect to assets, and in NSE with respect to market capitalization.
On May 2012, Future Group announced 50.1% stake sale of its fashion chain
Pantaloons to Aditya Birla Group in order to reduce its debt of around INR 8000
crores. To do so, Pantaloons fashion segment was demerged from Pantaloons Retail
India Ltd; the latter was then merged to another subsidiaryFuture Value Retail Ltd
and rechristened Future Retail Ltd.
Future Group is Indias largest leading retailers. It operates on multiple
platforms like Value and life style segment in the Indian consumers market. Company
head quarters located in Mumbai. As on Feb 2009 Company operates over 12 million
square feet of retail space, 1000 stores in 71 cities with employee strength of 30,000
people. The company is in aspect of giving retailing a modern look with reachable for
middle and middle lower class people. Retailing includes retail formats like
Pantaloons, Big bazaar, Food bazaar, brand factory, Blue sky, and Top 10, Star & sitar
and e zone. The company also operates on online future bazzar.com for upper class
that can get internet connectivity. Home Town a large-format home solutions store.
Future Group is the flagship company of Future Group, a business group
catering to the entire Indian consumption space. Future Group led by its founder and
Group CEO, Mr. Kishore Biyani, is one of Indias leading business houses with
multiple businesses spanning across the consumption space. While retail forms the
core business activity of Future Group, group subsidiaries are present in consumer

12

finance, capital, insurance, leisure and entertainment, brand development, retail real
estate development, retail media and logistics.
Corporate statement
Our customers will not just get what they need, but also get them where,
how and when they need.
We will not just post satisfactory results, we will write success stories.
We will not just operate efficiently in the Indian economy, we will evolve it.
We will not just spot trends, we will set trends by marrying our
understanding of the Indian consumer to their needs of tomorrow.[2]
Rewrite Rules, Retain Values.
Mail stone to world class retiling
The company was established in 1987 as Manz wear private Limited launched
its first product Pantaloons rousers. In May-1992 company offered Initial public
offering. The company enters in modern retails business in 1997 from Kolkata with
8000Sq.ft store. In 2002 company initiated a lunch of food chain market Food bazzar.
In 2004 central mall was lunched to concentrate on India one sector launched near
brigade road in Bangalore.
In 2005 group moves beyond retailing starts diversification and in organic
growth by acquiring galaxy entrainment, Indus League clothing and Planet retail. In
2006 company starts finical facilitation company to help internal need Future capital
Holdings. Starts its first Home building and improvement product retailing in
Bangalore. Starts joint ventures with Staples, US based company and with Genreali a
Italian Insurance major.
In 2007 Group had turnover of $1 billion. Specialized companies in retail media,
logistics, IPR and brand development and retail-led technology services become
operational. In 2008 big bazaar crosses 100 malls.

13

About the Leader Kishore Biyani


Kishore Biyani, began his career selling stonewash fabric to small shops in
Mumbai. He went launch Pantaloons, the biggest listed retailer of the country,
today. Pantaloons is credited with launching many retail formats in value and
lifestyle retailing under some of the best known retailing brand names in the
country, including Big Bazaar, Food Bazaar, Central, e-zone, and Home Town.
Since his young age, he had a rational thinking; He would question each and
everything and do it if he found some logic behind it. He was an introvert and shy
person at young age. He believed in the ideology create and destroy The man
who saw the future
MBTI MODEL
He falls in INTP category: Introvert
Intuition
Thinking
Perception
He would observe people, judge them and then accordingly associate or dissociate
from them. He loves simplicity and doesnt demand for luxury. A lot of thinking goes
behind when he takes any decisions. The entrepreneurial culture and spirit prevails in
the company, whereby the appetite for taking risks is encouraged. He believes in
learning while doing, and this what has helped him on his journey. He do not believe
in any rigid organizational structure and instead prefer an organization design
approach.
14

His employees - His employees are completely empowered individuals who are
encouraged to think out of the box, use scenario planning as a tool for quick decision
making, adopt design management as an approach which requires an individual to use
both sides of the brain while evaluating business propositions.
1) Visionary: - He is true visionary when he started selling readymade garments when
nobody preferred ready-to-wear shirts or trousers. Now his vision is serving Indian
society and which is unchallenged.
2) Risk taker: - He tried out different things on his own, like readymade garments,
textile production, creating brands before he ventured in retail business of selling
garments. He took risk in doing something new every time.
3) Ambitious: - He always had ambition of making it big in business, and that he
have done.
4) Simplicity: Youll never catch him in a tie and jacket. He dont drive expensive
cars.
5) Optimistic: Till six months ago, in his own words, Kishore Biyani was an eternal
optimist. Today, hes transformed into a realist. Its my next phase in life, shrugs
the Chairman of the Rs 8,600 crores Future Group, which has today moved away
from retail into financial services.
LEADERSHIP STRATEGY
A new normal is being defined in the Indian consumer market every day. With farreaching socio-economic changes that India has undergone in the last decade, the
drivers in urban and rural India are maturing fast.
With a growth strategy tempered with localization and an inclusive business model,
Future Group is the only pure play local retailer poised to lead Indias consumption
story with sustainable value creation.
Our multi-format retail strategy captures almost the entire consumption basket of
Indian customers. As modern retail drives new demand, efficiency and consumption
in new categories, our strategy is based on our deep understanding of Indian
consumers. We understand the varied buying behaviour of the Indian consumer across
regional ethnicities and are constantly innovating to craft strategies that address the
subtle differences.

15

Future Group's strategy is aimed at achieving inclusive, sustained and profitable


growth with three levers
Customer-orientation
The bottom line in each of our retail success stories is "know your customer". Insights
into the soul of Indian consumers - how they operate, think, dream and line - helps us
innovate and create differentiating functionally.
Continuous-innovation
As India's largest retailer, we understand the importance of innovation. We rethink
strategies and realign businesses with increasing agility to provide diverse customer
groups with refreshingly different retail experiences.
Collaborative transformation
Creating a collaborative environment combining our strengths with our suppliers and
vendors helps us create immense value for our customers which in turn fosters matual
growth.
We believe that modern Indian retail rests on the strength of two pillars scale and
efficiencies. As front-runners in both areas, we firmly believe our core responsibility
lies in providing protection to customers from the overall rate of inflation. While the
scale and size of our operations helps us improve efficiencies, it also ensures we
deliver greater value to our customers.
Our retail thrust is focused on four principal verticals of Food, Fashion, General
Merchandise and Home. These four categories together account for nearly 65% of the
consumption in the country and represent mass consumer aspirations. Acknowledging
this, we are creating retail pure play through divestment and demerger of non-retail
businesses to concentrate our efforts on these verticals.
Indias retail boom is being driven by resurgence in the economy. Modern retail still
has around 6% share of the total retail spend in the country, that is estimated at around
US $ 400 billion. Thus, the potential for modern retail growth in India is huge.
Currently, leading retailers in mature markets occupy the top three slots by turnover,
employment and value creation. As the Indian economy matures, it is upon us to make
the same happen in our country.
Future Group is India's leading retail company operating businesses in three sectors:
Retail, Allied Services and Finance. Our retail business across value and lifestyle
16

segments focuses on 4 key consumption verticals: food, fashion, general merchandise


and home.
Future Group has about 35,000 direct employees and 1,50,000 more are indirectly
employed. Our corporate structure has been established to infuse pace and flexibility
in decision-making and implementation, with empowered managers across our group
operations.
KBs belief Future Groups vision of inclusive growth for a harmonious society, points to a future
in which the entire population can enjoy a better quality of life. We aim to serve as a
catalyst that stimulates the use of inclusiveness as a powerful development tool.
Future Group aims to create and sustain an environment conducive to the domestic
growth of India by partnering with various stakeholders and playing a proactive role
in Indias development process.
Future Group believes in broad-based growth, the fruits of which are not concentrated
in the hands of few but shared by the community as a whole. This is the way towards
achieving the dual goal of profitable and socially responsible growth.Our initiatives in
inclusive development include livelihood issues, diversity management, skill
development and protecting the environment, to name a few.
Modern Indian retail can help improve incomes and provide opportunities for growth
to individuals with lower education levels or from the unorganized sector. With fair
wages and benefits, opportunities for further development and growth and a better
working environment, modern retail offers much more than most alternatives
available to such individuals.
Future Group focuses on three key enablers for inclusive growth: employability,
innovation and entrepreneurship. While employability helps create a qualified and
skilled workforce, innovation and entrepreneurship help drive growth and generate
employment.
At Future Group, corporate social responsibility, inclusive growth and sustainability
are at the core of our strategy and business practices. This reflects in our commitment
to the community, environment and to every stakeholder in building a stronger
foundation for our long-term, sustainable growth.

17

We believe modern organized retail has the power to strengthen the economy, create
grass root employment and contribute significantly to social inclusion. As Indias
premier retail player and one of Indias leading home-grown business houses, Future
Group is present across the consumption value chain. Through millions of customers
and thousands of suppliers, we are conscious of the economic, social and
environmental impact of our activities.
We believe the challenges of inequity in our robust and growing domestic economy
need to be tackled through sustainable development. Consequently, our principles are
focussed on two main areas: integrating sustainable development into business
activities and promoting sustained economic development for the country.

18

Kishore Biyanis Interview with Wharton University on Leadership and Future Group
Born into a small trading family, Indias retail czar, Kishore Biyani, replaced
conventional wisdom with guts and instincts to create Future Group, a $1 billion
company that includes Pantaloon Retail, a department store group; Big Bazaar, the
companys name for hypermarkets; Food Bazaar supermarkets, and Central Mall, a
more upscale aggregation of merchandise. Known for his insights into Indian
consumer behavior, Biyani also represents an enigma to the countrys emerging retail
players, both domestic and foreign. He offers some glimpses into what makes him tick
in his recent biography titled, It Happened in India: The Story of Pantaloons, Big
Bazaar, Central and the Great Indian Consumer, co-authored with Dipayan Baishya.
The book has sold some 100,000 copies, more than any other business book published
in India so far. In an interview with India Knowledge@Wharton, Biyani, who has
often been called the Sam Walton of India, talked about leadership, the Indian
retail market and why he would never consider collaborating with Wal-Mart, among
other topics. Excerpts from the interview follow.

India Knowledge@Wharton: What does leadership mean to you?

Biyani: In the last six months, I have read many articles on leadership and met a
couple of experts on that subject. But I still could not find an answer to what, exactly,
leadership means.

There are two types of leadership. The first is all about thought leadership, which is
original thought, believing in it and making things happen based on those thoughts.
The second type is skills leadership, which refers to doing things consistently and in
your own style.

India Knowledge@Wharton: What part of leadership is inborn and what can be


developed?

19

Biyani:For me, leadership is all about thought leadership, not skills leadership.Skills
leadership can be developed even after the age of 24 or 25, but thought leadership
cannot be developed after a certain age.

India Knowledge@Wharton: How do you define thought leadership?

Biyani: Thought leadership is about building scenarios and making them happen. I
believe everybody is a victim of systemic thinking and has their own mental syntax.
First things come first, and everything else is a reflection of where you started on that
first thing. If you change that syntax, things change. If you have a business school
orientation, your syntax of thinking will be in a particular direction. I am a
businessman and entrepreneur, so my syntax of thinking will be in a different
direction. Each has a unique method of sequencing to arrive at answers.

One would have to change everything to look at things differently. That is a very
difficult thing to do as we have our own mental maps. We are not trained to change
mental models. Business schools also have not been trained to do that. Business
schools work on creating efficiencies, creating productivity and managing
consistency. But life is not like that. Life is chaotic.

India Knowledge@Wharton: Leaders who are effective in one context may not be
so in another. What are your thoughts on this?

Biyani: Our measurement of effectiveness is a capitalistic approach based largely on


how successful leaders are in terms of balance sheet performance. But we must also
look at many other benchmarks. Leadership is all about making effective change,
creating some kind of paradigm shift by looking at the world or anything in a different
way. The environment around you keeps changing and you must keep creating new
lenses to look at things. Very few leaders are consistent throughout.

India Knowledge@Wharton: What is your biggest leadership challenge?

20

Biyani: I guess the biggest leadership challenge is always how you handle conflicts.
Secondly, there is no end to growth in leadership. The whole problem is people
believe that if they have achieved something they have reached Mount Everest and
then leadership is over. But it is a continuous process.

India Knowledge@Wharton: How have you developed leadership in your


organization?

Biyani: We have developed a very different style of leadership. We run a seamless


organization. We dont have structures; it is a non-hierarchical organization that works
with people coming together to do things.

It is also a very design-driven organization. We believe the structure has to be broken


up to change; the design has to be altered to change things. A design-driven
organization has flexibility and maneuverability. It is an amorphous organization that
can be given any shape and any direction anytime.

India Knowledge@Wharton: Can you give an example of how that works?

Biyani: We can chop and change anything we do, anytime. Nothing is constant for us.
Nothing is constant here. We believe in destroying what we have created.

India is a unique country and we have to look at our problems in an original manner.
We can use the West as a reference point or an inspiration, but we cannot ape it
entirely.

India Knowledge@Wharton: In your book, you say you were inspired a lot by Sam
Waltons biography, Made in America. Which of his principles did you find the most
appealing? Do you think any of them could be applied in India?

21

Biyani: I was struck by Sam Waltons theory that the retail business is driven either
by efficient operations or by very good merchandising. The first thing to do is to get
your merchandising right. Operations can be gotten right anytime.

We followed that principle and worked quite a lot on merchandising. We have become
a merchandising-driven organization rather than one that is operations-driven. Look at
any of the companies that are entering India they are all operations-driven. They
want to perfect their operations on Day One. They want to have control. That is one
big difference between them and us.

Secondly, it is all about passion. We realized that retailing is always done with
passion. It is not done with corporate imagery. Retailing is also about leading the
group, leading the cheerleaders, having Saturday meetings.

Waltons book also presents insights on how to manage the family, how to treat sons
and daughters, how to view the management and the family as two separate entities
and how to manage wealth.

Wal-Mart is the only organization I have seen that has gone against the law of nature.
It has broken one natural law, which says that when you keep growing bigger and
bigger, you get cut down.

India Knowledge@Wharton: Many international retailers like Wal-Mart and


Woolworths are entering India. How do you plan to handle the competition?

Biyani: Competition is competition is competition. We would always love Indian


competition because the money remains in India. Everybody is coming in with their
own agendas. It is good to have an Indian company as competition rather than
international competition.

India Knowledge@Wharton: Wal-Mart is likely to prove a formidable competitor.


Are you concerned that it will change the dynamic of the retail market in India?

22

Biyani: I dont know whether it could be the other way around. In the Indian
mythological epic Mahabharat, Kansa (representing evil) was warned that somebody
would be born to destroy him!

India Knowledge@Wharton: Have you considered collaborating with Wal-Mart?

Biyani: Wal-Mart is too huge. Partnerships should be of equals. There is nobody like
Wal-Mart; there is no comparison. Wal-Marts revenue is more than the total
consumption of India. Wal-Mart is a phenomenon unique to this era. The trick is in
doing something on your own, not in partnering with someone.

India Knowledge@Wharton: From where do you get your ideas?

Biyani: Ideas come from everywhere, from observations. In India, there are so many
opportunities and that can be trying. It is like [the Hindi film industry] making 140
movies in a year something works, something doesnt.

India Knowledge@Wharton: In your book, you say you like to watch people shop.
How often do you do that?

Biyani: I do that every day. We are trained to do that. So, while we are at the airport
we are watching people, and then at the stores and the malls. We observe people
anywhere and everywhere.

India Knowledge@Wharton: You have about 22 different retailing formats in your


organization. How do you evaluate whether a format is working or not?

We come to know within one month of launching a new format. We launch it and the
consumer tells us whether it will work or not. We get a feel for it while we are
launching it, but the consumer tells us everything else. It is like a movie. First day,
first show, the consumers tell you whether they like you or hate you. It is for you to
notice and pick up what they are saying.

23

India Knowledge@Wharton: What have you learned about forecasting consumer


behavior?

Biyani: India is such a diverse country. Every location is different. Every catchment
area is different. Consumers react very differently in different places.

If it is a gloomy day, I can forecast what the sales will be. If the day is a little darker, I
know sales will drop so much. If it is a brighter day, sales will be up. Mondays behave
one way, Tuesdays another.

We have a lot of data and research to support us and tell us how things move, both at
the broader level and the consumer-entry level.

India Knowledge@Wharton: In your book, you point out that consumers in various
parts of the country have their own peculiar styles of consumption. For example,
consumers in Gujarat buy their staples at one time for the whole year. That is not the
case in Punjab or West Bengal. Could you tell us more about the different patterns of
consumption in the country?

Biyani: Everybody has their own way of looking at things. People in Gujarat buy
their staples in bulk, at one time, for the full year, because it ensures a consistent
quality of products for them.

Basically, we have not changed genetically. The north Indian still remains a wheat
eater and the south Indian is still a rice eater. But we track the changes as and when
they happen. It might take another three to four generations for a person to change
himself culturally, for a wheat eater to become a rice eater.

India Knowledge@Wharton: As you grow bigger, do you think the cost of failure
gets higher and higher?

Biyani: It all depends on how you design your organization. We have just restructured

24

our organization, and created an innovation and incubation group which works only
on developing new concepts.

We have a very low cost of innovation. We dont do research. We do not hire


consultants. We experiment and do everything on our own. We run the largest design
company and are very fast in our approach.

India Knowledge@Wharton: Tell us about the challenges you faced in the process
of building up your enterprise say, for example, at the time Pantaloon Retail went
public (1992).

Biyani: For us, it was always the sense of creating something new. We were the first
retail company to go public, so there was the thrill of [doing that]. I have read
somewhere that once you dream big and think big, you should share your gains with
the public. So we went public.

Once you go public, you realize that there are other issues involved. The size of our
public equity offering was very, very small (Rs. 2.25 crore, less than $1 million at the
time). We would achieve that amount within 10 minutes of business now. We never
thought we would become this big. That is evolution for us. The classical mode for
going public today is very different. We have gone through our pains.

But how do you actually measure success? I dont know whether we are successful or
not.

India Knowledge@Wharton: What, according to you, is success?

Biyani: Success is when people start following you or start believing in your
thoughts, and whatever you do is accepted. The consumers tell you that you have
done something right when they keep coming again and again into your shop.

India Knowledge@Wharton: As you have grown in size, how have your

25

organizational systems kept pace with the growth?

Biyani: We have faced quite a lot of challenges here. New issues surface all the time.
If you ask us whether our systems are very strong, they are not. That will take a while.
The challenge is to create a balance between systems, processing, guts and instincts.
As a big organization, we have to bring in systems and processes, but we do not want
to lose the guts and instincts that have gotten us here.

We are now looking at some technology that can complement our guts and instincts.
We are tracking various trends around the world, and different events or happenings
that could have widespread cultural influences, economic influences and political
influences. We are able to record it now and will be able to simulate an environment
to find out that if so many things happen together, what would be their impact on
society, and what businesses and communication strategies could evolve around them.

26

CHAPTER III
WALMART
Currently Wal-Mart is the number one discount retail shop in the joined States
pursued by Sears, K-Mart, Target and Kohls's, respectfully, functioning in all 50
states. Wal-Mart is chasing distinct target markets with the with the Wal-Mart shops,
Neighborhood Markets, Sam's associations and worldwide Division. Wal-Mart is at
present experiencing extending development as it has since its creation. The reason
for this continued growth is that through the years the business has stayed reliable
with its mission of assisting both its customers and aides and also sustaining its
objective of being the very best in discount retail stores.
Table of Contents
Wal-Mart Globalization
Statement of Purpose
Defining organizational behavior has a figure of meanings that each one of us has to
interpret and use. This paper shall define what organizational behaviors main designs
are and how organizations exert them. The paper shall concentrate on Wal-Mart
organizational practiced concepts.
Introduction
Wal-Mart is at current experiencing continuing growth as it has since its creation.
Activate for this lasted growth is that through the years the commerce has stayed
consistent with its mission of serving both its customers and assistants and also
maintaining its aim of being the very best in discount retail stores. Currently WalMart is the figure one discount retail store in the United States chased via Sears, KMart, Target and Kohls, respectfully, operating in all 50 states. Wal-Mart is pursuing
different target markets with the with the Wal-Mart stores, Neighborhood Markets,
Sams Clubs and international Division. The commerce operates on procuring
products with rigorous consultations for the worst price and economies of scale in
turn to sell at slender sidelines and offer the customer the worst price possible. WalMart employs a top-of-the-line communications and knowledge technology strategy
for matter of sale tracking and accounting. Wal-Marts international division is
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operating in ten counties other than the stringed States. (Ai, 2003, 113-132)
Organizational Effectiveness Model
An organization comprises of many factors, to achieve organizational effectiveness it
is required that each part has to mutually cater to each other optimally. In an
organization, which is credited for its excellence, these parts are aligned with no
difference to attract exceptions.
This model is a mean that can help any organization, despite its size, or activities to
walk into organizational excellence. The model can help align resources; develop
communication, effectiveness and productivity; and achieve organizational goals.
Organizational Behavioral in Wal-Mart
In recent years, much public concern has been boosted approximate whether devised
reforming has resulted in the invention of more bad occupations in the stringed
States. Critics argue that employers have changed long-standing practices allowing for
the terms of employment and the way salaries are set. The dread is that there are fewer
tasks that offer a habitual long-term employment bridge and, at the same time, there
are more low-skilled jobs with high rates of turnover and small opportunity for
training and wage advancement. Empirical evidence advises that for employees with
fewer education and minority proficiencies, the opportunities for progress through
vocation ladders are weakening (Schermerhorn, 2003, 102-163). The aim of this
article is to exert a fresh detailed data set to estimate the impact of reforming on
human resource (HR) practices in the retail food industry. The retail food industries
are, in many ways, an ideal industry for such a study. Although the retail fraction of
the economies has always had a relatively flat vocation hierarchy, supermarket jobs
were once among the majority highly rewarded and highly coveted retail jobs.
However, the typical shopping core vocation is no longer a full-time, relatively wellpaid position (often unionized), but quite a part-time vocation with irregular hours,
dampened reward, and limited alternatives for training or progress (Schermerhorn,
2003, 102-163).

This shift has emerged at the equal time that the industry has undergone dramatic
product market reforming as Wal-Mart and other mass merchandisers have entered the

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industry. Wal-Mart is now the highest food retailer in the United States with its
allocation of the grocery market guessed to be approaching 20%, having extended
from merely ten super centers in 1993 to across 1,866 supercenters via 2005. In this
article we analyze the bridge between growing competitions from mass merchandisers
like Wal-Mart and change in HR practices indoor the industry. While shell research
evidence advises that the developments of tall box stores has had a considerable
impact on the labor market, majority empirical enquiries to date have emphasized on
the adjustments in county-level employment and wages that befall afterwards WalMart entry (Schermerhorn, 2003, 102-163). There has been no big data set available
on both firms and staff that could be used to describe HR practices at the strict level.
The information set used here permits analysis of changes in shopping core hiring,
progress, reward, and turnover morals at the establishment level in react to entry of
mass merchandisers in the localized zed market. We notably focus on operate of strict
ebb, since such morals have been coupled to strict performance and survival.
Background and Motivation
Measurement of shifts in HR practices of food retailers in react to changing product
market competition is a challenge. Some guidance is gave via Cottringer whoever
exert gauges of advertisement, hiring, and wage setting to capture pivotal aspects of
HR practiceswhich they (and we) refer to as internal labor markets (ILMs)
(Cottringer, 2000, 24-31). ILMs are generally characterized via long-term
employment bridges, with majority hiring done from indoor the strict for locations
rather than low-level port-of application jobs. In firms with ILMs, wages are related
to vocation features and are relatively unresponsive to changes in the external labor
market. Evidence supporting (though not proving) the existence of ILMs includes the
persistence of strict wage differentials across time, upward mobility and comes rear to
seniority within corporations, and limited external hiring rather than at ports of entry.
As described via Groshen and Levine (1998), many theories have been developed to
recount why corporations create ILMs. These models focus on the implication of
firm-specific human funds, incentives, and threat sharing as possible motivations.
Cottringer, 2000 locates evidence that firms pick ILM practices to impact workforce
quality, exertion, and quit rate. The severe element is that corporations alter HR
practices and may adjustment their ILM status in answer to competitive conditions.
While food shops are usually not known for enterprising or high-performance HR
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practices there is several shell research evidence of variation in HR practices across


firms in this industry. In 2006, for example, Fortune magazines enroll of the lid 100
companies to labor for included several supermarket chains, with Wegmans Food
Markets and complete food Markets ranked in the top twenty. For several stores
facing approached competition, customer service is perceived as an important fringe,
and long-term employment bridges may renew productivity and hence bolster the
growth of ILMs. Some food retailers have extended the range of emphasized services
they offer, containing more work- and training-intensive services such as bakeries,
delis, prepared food items, and other services. Thus, the limited evidence available
advises that there is heterogeneity in the wage and ILM framework in the retail food
industry and those person firms may respond merely sluggishly to adjustments in the
external market. (Warner, 2005)
Human Resource Practice
We exert evaluates of progress, hiring, and wage setting to capture pivotal aspects of
HR practices of supermarkets. For progress practices, we gauge the proportion of staff
hired into the second quintile that shift to a higher quintile in five years and the wage
growth of staff beginning in the second quintile across the five-year time span. Hiring
patterns are captured via the churning rates of all full-quarter employees in the
establishment as well as via the proportion of accessions (new hires plus recalls) in
the fourth and fifth income quintiles within the firm. Wage morals are evaluated via
the average and benchmark deviation of log real income for full quarter employees in
the firm. Given the high correlation of these evaluates across establishments (with the
exception of employee wage growth) we employ cluster analysis to classify the
shopping cores into pair audiences, which for convenience we call ILM and nonILM. The clustering strategy uses nonhierarchical clustering based on the median
value of the gauges in each group. The gauges include worker churning, average
income, the criterion deviation of earnings, and the ratio of flow to full quarter
employees. The clustering is done on blended 1997 and 2002 data. The gauges of
advertisement, hiring, and wage growth clearly demonstrate the varieties of HR
practices across supermarkets. In attachment, the shops identified as ILM or non-ILM
differ on other evaluates as well (not shown). Firms that are classified as ILM
promote an increased chip of their employees into higher earnings quintiles, have
more potent average inside-firm earnings growth, and tend to promote from indoor
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instead hire outside the strict to fill higher-earning positions. The LEHD data enable
invention of evaluates of the varieties of different aspects of HR practices at the
establishment level. They do not, however, directly apprehend other gauges
commonly accustomed to describe HR practices, notably educating opportunities and
incentive reward structures. (Warner, 2005)
In order to validate the LEHD-based summary index, we integrated knowledge from
an external audit, the shopping core Panel audit waged via the food Industry Center at
the University of Minnesota. The shopping core chapter Survey is conducted at the
store horizontal and typically achieved via the store manager. We exert the 2002
shopping core chapter audit to collect a HR practices index founded on five storelevel signs: hours of educating for fresh cashiers; hours of educating for store
administrators, grocery department administrators, and scanning coordinators; the
proportion of full-time employees hired at the shop; and pair evaluates of incentivebased compensation and noncash compensation at the store. These practices (more
training, more full-time employment, and more incentive-based compensation) advice
the establishment is attempting to devise strict particular human funds and lessen
turnover (Warner, 2005).
Wal-Mart stores also operate a lock-in policy during evening motions which they
claim is to prevent theft. They impose these instructions via daunting to dismiss
anybody whoever advantages a fire-exit to leave without authorities and merely one
person keeps a pivotal to obtain out, the manager. However there have been lot
instances where the administrator isnt even on the premises to the staff cannot retire
even whether there is a mishap or even to have a named break. This again illustrates
Wal-Marts condone for employees lacks and even safety across their possess target,
fetching the labor done (Levinthal, 1988, 187-218).
Warner, 2005 advised HR strategies, whereas founded circle achieving prevailing
organization targets must also focus to devise staff to think outside the square and
aid devise the organization. External fit organizations do not do and I think is
another point where Wal-Mart demonstrate that they are an external fit organization.
Managers are Wal-Mart is labeled as servant leaders. They are trained to think of
themselves as simply presidents of their workers. This servant leadership approach is
used to develop administrators to be purely a steward of the resources circle them;
they are there to lead their staff through the resources circle them. This approach

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permits for a very flat organization framework where you have the citizens devising
these tools, the stewards to implement them and thereafter all the floor-workers
(Warner, 2005).
Wal-Mart's contributor network
Dillman conferred approximate the growth of Walmart's digital network, now
known as Retail Link, which was caused in 1991 as a data warehouse providing daily
sales data. According to Dillman, at the time, whether they had done an ROI analysis
on this begins, they would have never acknowledged it. "We just did it on gut
instinct," she said.
The growth of Retail Bridge, via which contributors today have access sales,
shipment, commands, comes rear and other information on their commodities in WalMart stores, flies in the face of retail mentality. Traditionally, because knowledge is
energy, retailers and contributors do not allocation information. But Retail Link has
shown the value to both parties of earning information available.
Wal-Mart's RFID begin has also shown the benefits of knowledge sharing.
Gillette, for example was able to tell from RFID information which stores did not
obtain commodity out to the selling floor in time for fresh product launch date and
was able to discount such stores from their sales analysis. A lesser contributor that
gifts Christmas seasonal product was able to track pallets through Wal-Mart's
distribution chain. They glanced that an audience of pallets entered a DC but were not
shifting out to stores. They alerted the DC to the burden, which was able to expedite
delivery to stores in time for the vacation season, retaining the contributor from
having to suffer no where sales and mark-downs.
Wal-Mart's growth practices
Dillman was appealed approximate Wal-Mart's forecast of purchasing versus
construction its applications and whether it was earning exert of service-oriented
architectures (SOA) in development. She indicated that Wal-Mart does exert several
packaged applications for several operates, but for the centre" system, it is all inhouse developed code.
Regarding SOA, she took a pragmatic view. She signaled that SOA as a
technology cannot via itself lead to speedier and more flexible software development.
She attributed Wal-Mart's success in becoming and continuing its core strategies to
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the observation that they write all their possess code and do so in a highly modular
approach. In recent years, as Wal-Mart's IT audience has gotten much bigger, it has
had to formalize its best practices so that they can be promoted among all staff
members. This, in her forecast, is more important than the engineering of SOA.

Dillman's presentation gave me a different perspective on Wal-Mart. Wal-Mart


has lengthy been known as a corporation that thrusts its contributors to do business
electronically, and much of what is written approximate Wal-Mart in the technology
press is from the perspective of the contributor that has to obey with Wal-Mart's
mandates. But Dillman's performance gifts a unlike perspective--from inside WalMart--and it exhibits how one very great club employs IT to a competitive advantage,
whereas spending much fewer on IT than majority of its competitors.

Business Process Reengineering


Operations and Logistics
Wal-Mart has become aggressive in purchasing articles from contributors at
dampened prices. In earning their negotiations they sell more with the upper
administration personnel of the contributors instead the regional sales agents. WalMart also threatens the contributors that it shall go elsewhere whether they don't agree
on the cheaper price. This is done to achieve economies of scale and to pass the
savings on to the customer. Through this, Wal-Mart has the dominating energy in
distributing dub brand products at discount commissions and has become the nations
largest retailer in man geographic areas.
Cross docking became democratic among shopping cores in the 90's as the
industries gazed at the progress of overall merchandisers and department store
retailers. Supermarkets explored that changing their warehouse facilities from storage
to flow-thru distribution centers lacks approached knowledge strategies, data
integration, facility upgrades and cultural adjustments that pose a big challenge.
When Wal-Mart and target integrated ECR arranges, exertions were aimed to
the movement of sure commodities that resulted in a bolster in efficiency and a loss in
commissions at the distribution center, which are exceeded on to consumers.
Logistics considering cross docking and EDI between retailers, contributors

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and factories are a strategic way of earning business in the retail industry. They allow
faster product replenishment, lessen inventories and speed upward the flow of
commodities to the consumer.
The latest trend in warehouse authorities is the exert of RFID technology. Radiofrequency passport instruments are miniscule chips that shall be placed on products,
allowing the "automatization" of inventories every time product is removed off the
shelf for purchase. These devices donate to lessen distribution and transportation
expenses even more than actual systems.
Decision Making
Wal-Marts first strategy was to set stores in rural fields as the other retailers have
condoned them. This contributed Wal-Mart to be the first one to enter this market and
that was its firstly competitive advantage. It invariably prices its articles lower than
the local retailers and hence this contributed them to drive other small corporations
out of this market. They were always endeavoring to loss their expenses and were able
to achieve this via having high buyer energy across the contributors in the market and
also utilizing the economies of scale. However, Wal-Marts competitive advantage
and hence its strategy changed across time. Though Wal-Mart spaced itself in the
countryside, they dampened their expenses via utilizing efficient processes. Mainly
they continuously emphasized on renewing & employing IT to their benefit and
caring good distributor relationships. They boosted their information collection
networks, the ability to pick upward information in real time, and their ability to
procedure information. This enabled them to streamline their inventory delivery and
inventory verdict earning strategy to produce cheaper commissions and higher
volumes. They continued to influence their knowledge benefit via sharing their
information with contributors to further influence this advantage. Wal-Mart thereafter
influenced the economies of scope contained in the synergy between mass product
and food (Horvath, 2000, 125-296).
Wal-Mart was huge and hence their competitive advantage was sustainable. It resulted
in high volume & hence had the resources to utilize economies of scale to its
advantage. Wal-Mart also invested a assignment to improve its knowledge and
distribution which is not very easily imitable via its competitors.

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Wal-Mart hoped to expand internationally as the growth in the stringed States have
been slowing. So they began setting fresh stores across many countries hoping they
would be able to gain earnings the equal way they did in the US. However, afterwards
failing miserably in majority of those continent they realized blindly entering the
global market doesnt aid (Drummond, 2000, 14-78).
Wal-Mart must have been researched more approximate specific customers lacks ago
entering that specified country. The purpose for Wal-Marts failure in several of the
continent was their inability to cater to the lacks of the regional customers which was
their competitive benefit in the US market. However, they have been successful in
several of the continent via having strategic alliances with the regional retailers.

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CHAPTER IV Conclusion and Recommendations


Technology, altering consumer preferences, and competition from nontraditional food
retailers like Wal-Mart have led to main adjustments in supermarket operations,
pricing, and provide chain strategies across the past decade. Several recent empirical
studies advise that Wal-Marts entrance lessens employment and payroll in a county,
yet the way an industrys labor market alters in answer to such competitive stuns has
not been clear. The evidence handed here advises that there is substantial
heterogeneity in HR practices across retail food establishments, and these practices
are moderately persistent even in the face of fresh external competition. Individual
establishments do not emerge to adjustment HR strategies rapidly. Establishments
with ILMs as a entire are fewer possible to exit, yet the probability of ILM
establishments exiting boosts as shortly as they are faced with boosted competition
from mass merchandisers. On the other hand, the results advise that exits of non-ILM
firms are unaffected via this boosted competition. Our analysis locates that HR
practices are persistent among food retailers and therefore it is the entrance and exit of
firms instead adjustments in strategies of existing firms which leads to compound
adjustments in employment and payroll in labor markets.

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BIBLIOGRAPHY
www.futuregroup.in
www.walmart.com
www.scribd.com
www.wharton.upenn.edu
www.wikipedia.com/futuregroup
www.wikipedia.com/walmart

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