Control Mechanisms of Wal-Mart Case Study Example | Topics and Well Written Essays - 750 words

Control Mechanisms of Wal-Mart - Case Study Example This made the role of middle men in supply chain activities, as an employee in Wal-mart. After that Wal-mart brought a far larger group of potential consumers within reach of the small commercial centers. This resulted in the control mechanism of building the efficient warehouses necessary for discount operations as part of transactional strategic investments. This can be termed as the control mechanism of buying products from producers directly as the warehousing involves storing the goods economically. (Nelson Lichtenstein, 2005) The control mechanisms that implement the aspects mentioned in part A can be divided into price, integration, contract and trust developed with communication. These involve internal audit, external audit, market control and financial control. The internal audit of the Wal-mart involves asset protection. The auditors concentrate on making inventory process efficient in and over the USA. The loss due to shrink, theft and any types of losses or damages are calculated and communicated to the store management to minimize the problems. There are 11 locations of internal audit in USA. (http://walmart.feedroom.com/fr_story=FEEDROOM119269&rf=rss) The external audit of Wal-mart is responsible for consolidated annual financial statements and so the external auditor. This financial reporting will be according to legally accepted accounting standards. The observation process involves the closed door meetings of the management with external auditors. The external auditors have reasonable independence on preparing the financial statements to make company's transactions transparent. The financial statements prepared by external auditors will be presented to shareholders. (Hector M, 2002) The market control mechanisms of Wal-mart involve the cost cuts and global supply chain. It controls the market by opening large scale supermarkets that sell at low cost and by partnering with local retailers. It establishes its presence in the large retail markets by opening stores that sell the products less than the prevailing prices. It concentrates on increasing profit and sales by decreasing the purchasing costs and profit percentage. In every location the gigantic stores of Wal-mart are a success. (http://i.walmart.com/maint/) The financial control of Wal-mart involves reducing organizational debt and in course of time making the organization debt free. This is possible by maintaining enough cash flows for short term debts and partnering with local partners to establish new stores in new locations that minimize the credit taken from financial organizations. (http://i.walmart.com/maint/) Part C The above mentioned execution of control mechanisms shows effect on planning, organizing, controlling and leading of Wal-mart in its activities. These activities are concentrated in enhancing the exploration of supply chain management by using information systems. This resulted in application of information systems to support supply chain management in order to strengthen the control mechanisms. In the course of implementation only the information systems are being reengineered but not the business processes. This means the business processes dictate the information systems to be used. The business processes are planned keeping in view satisfaction of end user and the relationship of retailer with supplier. By focusing on developing adaptive networks the customer