Wal-Mart: An Abusive Retail Tycoon or An Altruistic Supplier of Goods to the Masses?
Wal-Mart started out as a small chain retail store that grew to 5,000 stores in ten countries and has an estimated 1.7 million employees around the world. This company’s primary focus is keeping the consumers happy, beating competitors, and escalating shareholder value with their big discounts on consumer goods. Currently, Wal-Mart has 2,640 discount stores, 2,396 supercenters, 670 Sam's clubs, and 435 neighborhood markets in the United States. Through Wal-Mart’s business model, customers get to save up to $100,000 billion a year and this has become beneficial to the working families, lower-income earners and retired citizens of the United States and other countries they are present in. Wal-Mart is able to achieve this customer satisfaction through a persistent demand on suppliers to lower prices at 5% every year. They also influence suppliers to streamline their companies, as what they have done on their own.
Wal-Mart applies a radio frequency identification (RFID) system in the supply chain, efficiently tracking the consumer goods from the suppliers’ warehouse until it comes out of their stores upon customer purchase. This way, they do not have to hire employees who will constantly check their warehouse boxes and store racks to keep track of stocks. This where Wal-Mart is recognized best—its efficient operations and its capacity to handle, transport, and follow products that come in and out of their hands. Wal-Mart has the tracking system and thus, requires suppliers to acquire the tracking tags for the goods that they need to deliver.
At an immediate glance, it appears that Wal-Mart is a flawless and well-oiled machine. However, this company has undergone much examination and the studies revealed the imperfections beneath the sprawling racks of consumer goods and unbelievable discount rates. As far as Wal-Mart employees are concerned, it is for a fact that Germany is the only country with a Wal-Mart that has unionized employees. In the United States, Wal-Mart employees’ attempts to form unions have been discouraged or even apprehended. It was also known that only 46% of Wal-Mart employees are on Medicaid and the rest do not have health insurance. Lawsuits have been filed against the company on the matter of discrimination against race, gender, and disabilities. There were also reports of failure to monitor the working conditions of employees abroad, which, apparently, were working in a sweatshop set-up. Violations of environmental policies were also held against Wal-Mart on several accounts. The company has also found ways to cut down on hiring employees. Its RFID system replace workers because it keeps track of Wal-Mart's stocks from leaving the supplier until it is bought from their stores. They don’t have to get people to look into boxes and peer over the store racks to check if their stocks are still sufficient or are not moving.
As for dealing with suppliers, Wal-Mart has leverage with them considering the bulk of orders that they send in to supply the chain of stores they have. While some suppliers express that their main business is Wal-Mart, others have their misgivings since they cannot comply with the company’s demand for big discounts on their products. In fact, the RFID costs them, too, since they have to continuously acquire supply of the tags attached to the products being delivered to Wal-Mart.
All these negative information regarding Wal-Mart compelled them to address the issues through establishing various environmental projects. One of which was setting up two experimental stores that are environmentally friendly. It also founded the Wal-Mart Acres for America; the project aims to protect an acre of land that is inhabited by wildlife, for every acre of land that they develop. Efforts to recycle plastics in their stores and warehouses are being applied. The company has even encouraged the participation of communities by involving schools in recycling plastics. Wal-Mart has also implemented a lighting efficiency program by retrofitting their older stores and changing lighting systems for energy conservation. Measures to improve its public image were also taken on. These were done by putting up a website, which offers information about Wal-Mart, media releases that gave the “unfiltered truths” about the company, and they are now working with a public relations firm and a team of communication specialists.
Based on these presentations from the case study, “Wal-Mart: The Challenge of Managing Relationships with Stakeholders”, it can be assumed that Wal-Mart, as a company has been serving itself in the guise of consumer satisfaction. In a capitalist point of view, this is, of course, its recognizable predisposition. Wal-Mart, or any other company for that matter, has to satisfy its customers in order to maintain, if not to further increase, its profits. This capitalist nature can be closely related to the Egoism Theory, which states that the one’s self is, or should be, the motivation and the goal of one’s own action . As an entity, Wal-Mart, like a human being as described in this theory, embodies this tendency of acting for its own welfare.
How Wal-Mart behaves as an entity applies to both variants of the Egoism Theory—the descriptive or psychological egoism and the normative egoism. Descriptive egoism states that people are inherently self-serving and their personal desires and interests motivate everything that they do. For the case of Wal-Mart, its desire and interest is to increase its profits. Since the descriptive egoism, as a theory, was critiqued as negligent of morals and ethics, at some point it does apply to Wal-Mart’s actions that resulted to lawsuits, environmental policy violations, and infringement of labor laws, among other things. This is also the case from a normative egoism point of view, which states that advancement of one’s own concerns is always done with a purpose. From this perspective, Wal-Mart does have a purpose—it wants to keep its consumers happy so that they keep coming back. Besides, the company’s store pricing has brought in great savings to those who really need it. The purpose of keeping employee wages at the minimum, limiting the number of employees with health benefits, among other measures of minimizing company expense, was also for the purpose of being able to keep their prices low for the consumers. At the same time, it is able to maintain profit; enough to expand the number of stores and to have other people gain access to its shopping perks.
As this is the existing character and conduct of the company, management staffs of Wal-Mart are expected to act in accordance to it. They are expected to uphold the company’s well being and continuous growth. Again, a certain desire motivates the management to enact the policies of the company. Basically, this motivation could be the desire to keep their job or probably be promoted and to continuously enjoy the incentives that Wal-Mart management personnel have.
On the other hand, the employees’ attempts to establish or partake in unions is motivated by their desire to put their interests forward. They are not earning enough from all the hard work they put in Wal-Mart; hence, they do not have enough money to attend to all of their needs, including personal health needs and of their children. So, through the unions they were seeking avenues that can assist them in negotiating for higher wages, better benefits, and working conditions. It can also be said for some of the members of the Wal-Mart staff chose not to join unions because they were motivated by the fact that they could lose their job, which is their source of income. The desire to keep working and earn a salary is their primary interest as far as Wal-Mart is concerned.
As far as the suppliers are concerned, those that maintain fidelity to Wal-Mart apply to the egoism theory, as well. Their business engagement with Wal-Mart is beneficial to them, and thus, satisfies its ego as a business entity. For the case of Snapper, the lawnmower manufacturing company that decided not to supply for Wal-Mart, also responded to its personal interests as a business. Despite the alternative presented to them, such as producing and releasing lawnmowers of less production cost, Snapper’s desire was to keep its name as one of the high-quality lawnmower manufacturers in the United States and they were not willing to give that up.
Understanding this psyche of human being is crucial to the field of management. Seeing and appreciating what drives a person to act also means understanding what motivates him or her to maintain good performance and complying with business arrangements and / or company policies. On the other hand, it is also a way of understanding what goes in the way of a good work performance of an employee. It could be the lack of being able to satisfy one’s interests or welfare. Seeing these aspect of the human behavior and philosophy maintains an understanding, which builds a foundation to a good management plan of action. It also builds a good foundation for relationships within the current work environment, among peers and with subordinates.
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