Walmart founded by Sam Walton in 1962 is a multinational retail corporation, with the opening of the first Walmart discount store in Rogers, Arkansas (US). As the nation’s largest retailer and second largest corporation, Walmart has the significant influences on the retail world. It offers to its customers a one-stop shopping experience because it has a full offering of groceries and general merchandise in a single store. Now Walmart consists of over 110,000 stores and 2.2 million sales associates in 27 countries. Also, Walmart promises her customers: “Saving people money so they can live better.” It provides low prices to her customers and high return on investment to its stockholders.
Focusing on the corporate social responsibility, Walmart is doing well in environment responsibility, country responsibility and local responsibility. Viewing Walmart’s 2013 Global Responsibility Report, Walmart now utilizes Sustainable Value Networks (SVN) to help integrate sustainable practices into all parts of their business, mainly concentrating on renewable energy, sustainable facilities, sustainable transportation and operations waste and recycling. Walmart is progressing toward its goal of being supplied 100 percent by renewable energy. At the end of 2012, Walmart had more than 280 renewable energy projects in operation or under development.
These projects provide Walmart more than 1 billion kilowatt hours of renewable electricity annually – enough to power more than 95,000 American homes. Also, it has made strong progress on its commitment to generate zero waste to landfill, reduce one-time-use bag waste. This achievement alone had the potential to prevent more than 11.8 million metric tons of CO2 emissions annually, the equivalent of taking more than 2 million cars off the road. As for the company responsibility, Walmart is committed to engaging all its stakeholders, both internally and externally, to become the most sustainable, responsible company it can be.
It continually benchmarks with other companies around the world and across industries to ensure excellent processes at Walmart. It has embarked on a journey to develop the finest compliance progra in the world – a risk-based program that leverages technology and sets the standard for global companies. Walmart has appointed a new global chief compliance officer. These compliance leaders have more than 60 years of combined compliance experience. They are definitely instrumental to anticorruption professionals in the markets.
Then, Walmart makes huge progress in local responsibility. For example, in 2012, Walmart invested 3.1% in programs designed to address the root causes of some of Africa’s biggest challenges. Job creation and promotion of its associates remains a top priority at Walmart Argentina. Plus, $14.2 million was raised and $8.6 million donated to help Canadian families in need. 181,490kg food was donated in Chile.
However, Walmart’s social responsibility has always been doubted. Even though Walmart has the largest private employer, around 1.3 million workers, it has become a symbol for much of what is wrong with employers. Walmart reported a net income of over $11 billion last year to remedy some questionable workplace practices, including wage law violations, inadequate health care, exploitation of workers and the retailer’s anti-union stance.
Generally, about 5,000 lawsuits are filed against Walmart each year, or roughly 17 suits per working day. In California, about 116,000 Walmart employees joined in a class-action lawsuit against the retailer, claiming that Walmart violated a California law requiring employers to provide an unpaid 30-minute lunch break to employees who work at least six hours. In the end, California Walmart employees prevailed on their claims in front of a jury, collecting $57 million in compensatory damages and $115 million in punitive damages. In another instance, in 2012 November, an internal memo from a Walmart executive recommending numerous ways to reduce health care spending was discovered by the New York Times.
The memo’s recommendations to reduce health care spending include discouraging unhealthy people from working at Walmart, hiring more part-time workers and putting health clinics in Walmart stores. In addition, Walmart was accused of failing to provide adequate safety equipment
(gloves) for its fabric cutters and seamstresses overseas. According to one report, in Walmart’s cost- benefit analysis, it was cheaper to wash workers’ blood from clothing before shipping the clothing overseas for sale than it was to provide gloves. So, it seems that Walmart is a sweatshop-like working condition with low-wage and low-skilled.
How to change the situation of Walmart? One of the most important obstacles to change is Walmart’s business model, with its foundation in everyday low prices. This strategy imposes severe limits on any price increase, for fear that competitors will take away its market share. At the same time, Walmart must generate comparable return on equity to satisfy potential investors. Therefore, growth in profits must come from expansion of business activity around the world, and from procuring goods and services at the lowest possible prices. Hence, the use of sweatshops and terrible working conditions contribute to the biggest share of Walmart’s profits.
Like every company, Walmart faces external pressures in the marketplace: customer loyalty, industry best practices, expectations of major shareholders and investment community, and increased government pressure and regulatory oversight. However, these external pressures are instrumental to Walmart. Despite extensive media coverage, demand for Walmart’s products continues to grow. In most industrially advanced countries, product boycotts by consumers have been short-lived, so public pressures and media coverage tend to blow over. Walmart does not have to fear its competitors either, because they all use factories with similar cost structures and labor practices.
In addition, consumers should certainly put more pressure on retailers to ensure that their goods are produced in safe conditions, for fair wages. The shareholders could then exert more pressure on Walmart’s compliance program to ensure that Walmart have the compliance maintained and verified. Then, Walmart could use successful compliance to build corporate reputation which causes sustainable growth. This would give it a competitive advantage in entering new markets. I believe there will come a day when it will be in the self-interest of Walmart to stay within the law and to treat their workers humanely.
Work Cited 2013 Walmart Global Responsibility Report-Walmart Corporate The good, the bad and Walmart-Workplace Fairness Why you should dump Walmart-The Motley Fool, John Bromels, 2014 Walmart 2011 Sustainability Report-Walmart Corporate Walmart Highlights Progress in 2014 Global Responsibility Report-Walmart Corporate POWERED BY TCPDF (WWW.TCPDF.ORG)