Learning to become a high reliability organization in the food retail business

Abstract

This case discusses Selectos, a retail chain based in El Salvador, which was put under severe strain when Walmart entered its domestic market, threatening the leading position it had acquired through many decades of investment. The case illustrates that Selectos succeeded in competing Vis a Vis Walmart because it implemented the principles of high reliability organizations. First, before Walmart entered the market, the Salvadoran company invested time and financial resources to audit its routines, finding several areas of improvement. Second, its core strategy was to focus on continuous improvements in its operations. Third, it engaged its workforce, and especially the shop floor managers, in the process of executing its strategy at the whole corporate level. Fourth, through consultation with the managers of its functional areas, it enacted systems to manage unexpected events, ranging from hurricanes to violent attacks on its facilities (preparation for unexpected events). The case is designed to illustrate how a domestic firm from an emerging market competes with a leading multinational corporation, emphasizing the importance of organizational learning, especially the development of routines and mechanisms that allow for flexibility and adaptability to changes in conditions.