Background of the Research
“The essence” of a family-owned business is regarded to be a result of a family’s impact on the company’s culture, operations, and behavior. The strategic management of a family firm is therefore directed toward sustaining the economic and noneconomic worth of the enterprise for future generations of the family. Growth as a major approach is demonstrated in this chapter by the Sheetz family firm, which is profiled as a case study, through the care and empowerment of employees, community involvement, and social responsibility. Owning a family has a significant impact on the strategy formulation and implementation processes. Families and businesses have long been seen as two interdependent systems that influence one another. Family and employee ownership of the convenience strategy ensures that it grows quickly. The family’s strong dedication to values like unity, harmony, and continuity, not only within the family but also in the communities they serve, can be seen in the methods like employee care, community engagement, and social responsibility (Barros et al.,2016). Scholarly attempts to study the particular problems and strategic advantages of family-owned businesses are on the rise as interest in the oldest and largest family organizations grows. Although the importance of strategic management in these family businesses has been widely discussed in the past global corporate landscape, it is still vital to address the different challenges and concerns these family-owned businesses face in contemporary times.
Research Rationale
It is possible to think of strategy as a series of choices and activities designed to take advantage of an organization’s competitive advantages to meet predetermined goals. Strategic substance, context, procedures, and their relationship to company performance have been of interest to strategy researchers for a long time. According to previous research in developed economies, strategic content has a significant impact on the strategy-making process (Chrisman et al.,2008). The importance of new product development and rearrangement, for example, is noted in a classic study on organizational decision-making. Many factors can complicate a strategy’s formation process. For example, if a strategy’s outcome is uncertain because of the dynamic and complexity of external environments, the strategy formation process may become more complicated than those processes with routine and straightforward matters, such as personal choices and family ethics. This can have a significant impact on business strategy and decision-making because of the influence of the family’s preferences (Bhalla et al.,2009). In addition, the family firm’s strategic aggressiveness can be limited by family considerations.
What motivates this study is the concept of “bounded reasoning,” which states that the rationality of actors in strategy formation processes is bounded because the information is limited due to expensive information search and collection while their minds are limited by limited capabilities. This research is based on this concept.
Aims and Objectives
The research focuses on addressing the following aims and objectives.
Aims
The research aims to understand and evaluate the influence generated by the family firms like Walmart in carrying out strategic management practices.
Objectives
- To understand the manner of strategy formulation within family firms like Walmart
- To understand how strategies are executed and monitored by the family firms like Walmart
- To understand the success of the strategic implications undertaken by the family firms like Walmart
Research Questions
- How are business strategies framed by family firms like Walmart?
- How are business strategies executed or implemented by the family firms like Walmart?
- Who is responsible for providing strategic directions in a family firm like Walmart?
- Who is responsible for monitoring the success of the strategic implications in a family firm like Walmart?
- Have the strategic management practices in family firms like Walmart gained needed success?
Brief Literature Review
Walmart as a Family Firm
Baron and Lachenauer (2021) recognize both family and business as the two most significant forces that tend to influence the activities carried out in the world. The impact rendered by them is amplified when both aspects are combined wherein it also enhances the level of complexity involved regarding such. The family business that has gained due success, in the long run, is identified to bear three different traits (Baron & Lachenauer, 2021).
Reflecting on these traits Baron and Lachenauer (2021) state that family businesses are operated effectively by people that tend to be lifelong learners and bear a curious mindset. Further, family businesses also gain needed success based on the existence of needed collaboration and teamwork. As a team, the family businesses are involved in citing emerging problems and challenges and thereby generating effective solutions collaboratively. Finally, family businesses are also observed to be effectively adaptable to changing circumstances so that they can counter emerging challenges (Baron & Lachenauer, 2021).
Again, Grundy and Alston (2022) highlight the definition of family firms put forward by the Small Business Administration in the United States. Family firms are indicated as small business institutions that tend to employ around 500 employees (Grundy & Alston, 2022).
In terms of evaluating the retail giant, Walmart as a family firm Johnson (2020) reflects that the first store of the retail giant was opened by none other than the owner of Walmart, Sam Walton, in Bentonville based in Arkansas. Subsequently, Walmart turned out to be a multinational retailer and thereby a brick-and-mortar retail giant. The founder of Walmart, Sam Walton, expired in 1992. After his demise, Walmart’s equity of 50 percent is now owned by his wife and children. The shares are managed by the family based on the Walton Enterprise. The members belonging to the Walton family have long served the company as part of the Board of Directors of the firm (Johnson, 2020).
Significance of Family Firms in the United States
In a report generated by the Grand Valley State University (GVSU) in 2021, it is reflected that around 5.5 million businesses operating in the United States of America are family owned in nature. Family-owned business practices are reflected to contribute to around 57 percent of the GDP of the United States and also happen to employ around 63 percent of the total workforce. The estimates reflect that the population of around 98 million is alone absorbed by family-owned businesses in the United States (GVSU, 2021).
GVSI (2021) also accounts that family businesses based in the United States also tend to account for the creation of around 78 percent of new jobs in the United States. The family firms operate based on certain distinct value sets and not only for a profit motive. The value sets that effectively differentiate family businesses from other types of businesses are the philosophy of generating long-term investment, working in a committed manner for meeting the needs of stakeholders like employees and suppliers, and also looking forward to addressing the needs of society (GVSU, 2021).
In terms of categorizing the ownership of family-owned firms, Grundy and Alston (2022) state that in 2019 the maximum number of owners of family firms in the United States are men which are followed by women and then by minorities and Hispanics (Grundy & Alston, 2022).
Reflecting on Walmart’s contribution to US GDP, Unglesbee (2019) highlights that during 2018 the total revenue of Walmart amounted to $514.4 billion. It accounts to be around 2.4 percent of the country’s GDP (Unglesbee, 2019). Further, the Corporate Website of Walmart (2022) reflects during March 2021 the company announced an investment of around $350 billion regards to the future of US Manufacturing which in turn will support 750,000 new job opportunities (Walmart, 2022).
Strategic Management Practices in Family Firms like Walmart
Daspit et. al. (2017) reflects that the strategy formulation approach focuses on the development of an effective strategy for meeting the objectives of the business institution. Regards family firms the goal-centered approach of strategy formulation earns an effective relationship with the transfer of business ownership in a transgenerational manner. Likewise, the implementation of business strategies is made based on the encompassing of diverse elements like the business structure, operational systems, and business processes which in an overall manner contribute to the effective execution of the business strategy (Daspit et al., 2017).
Daspit et. al. (2017) further reflects that the implementation of strategic decisions in a family firm tends to gain lesser resistance owing to the existence of family members belonging to the same generation compared to a family firm run by members belonging to diverse or mixed generations. Likewise, the existence of other non-family members in the family business firms tends to make matters worse regards to the execution of strategic objectives. The failure in aligning the overall mindset between the family and non-family members in a family business happens to jeopardize the effective implementation of the strategic initiatives owing to the generation of increased resistance (Daspit et al., 2017).
The corporate website of Walmart (2022) reflects that the Board of Directors of the company bears the overall responsibility for deciding on the firm’s business strategy and strategic objectives and also carrying out strategic planning. The management of the firm earns responsibility for executing the business strategies as underlined by the board of directors from time to time (Walmart, 2022).
6. Research Methodology
6.1. Research Design
This particular research work shall be following the qualitative research design. In a qualitative research design, the focus is primarily on gathering information from secondary sources, which that implies, the resources are taken from the literature that is already available in the print as well as in online media. These materials are mostly in form of the research which has already been accomplished in the field and also in form of the data from the documents published by the company, which is Walmart as far as this particular purpose is concerned. A qualitative research design based on secondary research methods, with no scope for primary data collection, characterizes the research work which shall be conducted.
6.2. Research Philosophy
There are generally three research philosophies that are followed in conducting research work, positivism, interpretivism, and realism. However, for this particular research purpose which is likely to be conducted, the philosophy of interpretivism shall be followed. The main essence of interpretivism lies in the fact that it seeks to interpret the data against a particular hypothesis and find out whether the chosen hypothesis is valid or invalid based on the data collected. This is also instrumental in terms of finding out what the research literature referred to has to convey, the convergences among them and their respective divergences, and also finding out the gaps in the literature available on the issue.
6.3 Data Collection Method
Given the fact that the research design is qualitative, with no scope for primary data collection. The method to be followed for the research to be conducted in this particular regard shall thus be without the scope of any sampling approach. The process of literature review shall be followed for data collection from both online and offline sources, which essentially must follow the protocols of academic relevance and integrity.
6.4. Data Analysis Method
The research analysis method shall be deductive with a focus on trying to find out the interpretation of the data against a particular hypothesis and find out whether the chosen hypothesis is valid or invalid based upon the data collected, and also to find out the gaps in the literature available on the issue. This is how the deductive approach shall be implemented in the research process.
6.5. Research Ethics
Ethics are an important part of any research work as it helps to establish the validity and verifiability of the research. Certain key aspects of research ethics ought to be followed. First of all, the aspect of avoidance of any form of plagiarism or indulgence in any ethically unacceptable practice has been avoided. Rather the material referenced shall be paraphrased. Secondly, comes the aspect of referencing which too has been adhered to, as it is necessary to give the due credit to the author of the original work.
6.6. Justification of the Research Methodology
The qualitative research mythology shall be followed throughout the research process given the fact that there are plenty of materials available on the issue. Also due to the constraints of time and funding, the chosen research methodology shall be the most beneficial one.
7. Limitations of the Research
This particular research shall not be producing or contributing any new information in the field of research, which is due to the constraints of time and funding. However, it does not imply that the research is invalid as it helps to view the existing research in a new light with a focus on the gaps which could effectively be fulfilled in the subsequent attempts.
References
Baron, J. & Lachenauer, R., 2021. Harvard Business Review Family Business Handbook. Massachusetts: Harvard Business Review Press.
Daspit, J.J., Chrisman, J.J., Sharma, P. & Long, R.G., 2017. A Strategic Management Perspective of the Family Firm: Past Trends, New Insights, and Future Directions. Journal of Managerial Issues, 29(1), pp.6-29.
Grundy, A. & Alston, S., 2022. U.S. Census Bureau Resources, Data Tools Help Mom and Pop Businesses, Highlight Their Business Impact. [Online] Available at: https://www.census.gov/library/stories/2022/03/mom-and-pop-businesses-key-contributors-to-united-states-economy.html [Accessed 29 April 2022].
GVSU, 2021. Family Owned Business Institute. [Online] Available at: https://www.gvsu.edu/fobi/family-firm-facts-5.htm [Accessed 29 April 2022].
Johnson, J., 2020. 10 Family Businesses That Have Made It Big. [Online] Available at: https://www.uschamber.com/co/start/startup/family-businesses-that-made-it-big [Accessed 29 April 2022].
Unglesbee, B., 2019. Retailer of the Year: Walmart. [Online] Available at: https://www.retaildive.com/news/retailer-walmart-dive-awards/566187/#:~:text=The%20company%20last%20year%20made,times%20the%20GDP%20of%20Morocco. [Accessed 29 April 2022].
Walmart, 2022. Corporate Governance. [Online] Available at: https://corporate.walmart.com/esgreport/esg-issues/corporate-governance [Accessed 24 April 2022].
Walmart, 2022. Investing in American Jobs. [Online] Available at: https://corporate.walmart.com/purpose/opportunity/investing-in-american-jobs#:~:text=In%20March%20of%202021%2C%20Walmart,than%20750%2C000%20new%20American%20jobs.&text=With%20this%20new%2010%2Dyear,more%20value%20to%20our%20customers. [Accessed 29 April 2022].
Barros, I., Hernangómez, J. and Martin-Cruz, N., 2016. A theoretical model of strategic management of family firms. A dynamic capabilities approach. Journal of Family Business Strategy, 7(3), pp.149-159.
Bhalla, A., Lampel, J., Henderson, S. and Watkins, D., 2009. Exploring alternative strategic management paradigms in high-growth ethnic and non-ethnic family firms. Small Business Economics, 32(1), pp.77-94.
Chrisman, J.J., Steier, L.P. and Chua, J.H., 2008. Toward a theoretical basis for understanding the dynamics of strategic performance in family firms. Entrepreneurship Theory and Practice, 32(6), pp.935-947.
