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Walmart said yesterday that it will reorganize and simplify its US store operations so that it can “react more quickly to changes and better communicate,” according to a story from Bloomberg.

While the company has not been specific yet, Bloomberg writes that the plan is to “consolidate its U.S. business to four divisions, down from six, each of which is managed by a senior vice president … The number of U.S. regions will be reduced from 44 to 36.”

According to the story, “The shake-up follows several rounds of job cuts at the retailer’s Bentonville, Arkansas, headquarters over the past two years. Chief Executive Officer Doug McMillon has been trimming expenses to help offset increased spending on e-commerce and employee wages.

“In simplifying its U.S. business, Wal-Mart said it’s returning to an approach it was using before another reorganization a few years ago.”

Walmart’s statement on the issue said, in part, “Our last field restructure was several years ago and our business has changed over that time. The structure we are putting in place will help improve communication and execution, streamline decision-making and help us accelerate our pace of change.”
KC's View:
When I read the stories about Walmart’s reorganization, I had a couple of different reactions. One is that they’re absolutely right - that every company has to find ways to be faster and more nimble. And frankly, the bigger you are, the more important it is.

But I also found myself thinking about my old friend Glen Terbeek, who has forgotten more about the food and retailing business than I’ll ever know. Glen used to talk about how companies can actually be more effective by driving down the decision-making process to more granular levels. If Walmart has some 4,000 stores in the US, for example, he would argue that it ought to be broken down into pods of 10 or 15 or 20 that can be more responsive to local market needs.

I guess the question I have is whether streamlining and simplifying is the same as centralization … and if so, does it really serve the goal of making a company more nimble and responsive?

I don’t really have an answer to that question … though I do think that if I’m right, it would suggest that all these efforts could be for nought in the long run.

Just asking.