Case 1: Wal-Mart: The Main Street Merchant of Doom Wal-Mart: it‟s a familiar name to most Americans, as well as some citizens of other parts of the world. Since its beginning in 1962, Wal-Mart stores have spread throughout the United States and even operate international stores in nearly a dozen of other countries throughout the world (Carroll and Buchholtz 772-77). Currently, over 7200 Wal-Mart stores operate worldwide (“Wal-Mart 2009 Annual Report” 4-7). Wal-Mart Stores, Inc. has “four major retail divisions— Wal-Mart Supercenters, Discount Stores, Neighborhood Markets, and Sam‟s Clubs warehouses” (Carroll and Buchholtz 772).
In Business & Society: Ethics and Stakeholder Management, Carroll and Buchholtz, state Wal-Mart became the “world‟s largest retailer” by 2001 (772). To some communities, Wal-Mart is “seen as a friend” while in other communities, it‟s seen as a „“billion-dollar parasite” and a “nation retail ogre”‟ (Carroll and Buchholtz 771-75). When Sam Walton began Wal-Mart, he targeted small rural towns with less than ten thousand people (Carroll and Buchholtz 772).
According to Carroll and Buchholtz, he looked for towns that needed this “friend” that Wal-Mart would become to them (771). His goal was to provide loyal customer service and “fast, friendly service coupled with consistently low prices” (Carroll and Buchholtz 772). Walton‟s main goal was providing convenience and efficiency to his primary stakeholders: consumers. Wal-Mart has both external and internal stakeholders. I will discuss one main external stakeholder: consumers. Consumers are those people who shop directly at Wal-Mart stores or online at walmart.com.
Consumers have a direct financial stake in Wal-Mart. Consumers, along with manufacturers, determine the level of profitability of WalMart. The amount of profit Wal-Mart makes depends, more or less, on how much or how little the consumers spend. Consumers, especially in small rural towns, depend on Wal-Mart to provide them with the basic things they need (Carroll and Buchholtz 772). Consumers rely on
Wal-Mart as much as Wal-Mart relies on them. If Wal-Mart were to change their store hours to 9am-5pm, it could affect some consumers. Perhaps, certain consumers may not even be able to shop at Wal-Mart due to conflicts in work schedules. Therefore, changes in hours, products, payment methods, etc., can affect the average consumer, making it a primary stakeholder.
On one hand, a lot of people feel that Wal-Mart is a friend to their communities. Some communities are standing and waiting for Wal-Mart with open arms. When “Sam Walton opened his first store in Rogers, Arkansas,” he had a goal to target “small, underserved rural towns with populations of no more than ten thousand people. The people responded, and Wal-Mart soon developed a core of loyal customers who love the fast, friendly service coupled with consistently low prices” (Carroll and Buchholtz 772).
People were grateful for the Wal-MartThey enjoyed the convenience that Wal-Mart brought to them as well as Walton‟s philosophy of making customers feel like they are at home when shopping (Carroll and Buchholtz 772). According to Business & Society: Ethics and Stakeholder Management, Carroll and Buchholtz, state that part of Walton‟s cultures included: “exceeding customer expectations” and “helping people make a difference (772). According to Carroll and Buchholtz, “in spite of its challenges, Wal-Mart has millions of supporters,” which visit stores on a regularly weekly basis (779).
Although there is some controversy about Wal-Mart putting small downtown businesses out of business, it also provides thousands of people with jobs. “It (Wal-Mart) is the biggest employer in 21 states, with more people in uniform than the U.S. Army” (Useem, Schlosser, and Kim 64-78). When a new WalMart is being constructed, there are often hundreds of construction workers and other related employees working to build the Wal-Mart. Someone has to pour the cement, install doors, wire the building, etc. Wal-Mart is providing jobs before it even opens its doors.
Corporate social responsibility (CSR) is defined as “seriously considering the impact of the company‟s actions on society” (Carroll and Buchholtz 35). Corporate social responsibility is very important in a business. Millions of Wal-Mart shoppers feel Wal-Mart is socially responsible for their actions and provides high value (Carroll and Buchholtz 779). As issues of environmental awareness grew, Sam Walton began to think environmentally and made commitments to “land, air and water” (Carroll and Buchholtz 774).
Wal-Mart began to be socially responsible for the environment by making shelf tags from “100 percent recycled paper” in hopes of informing customers about Wal-Mart‟s efforts to be environmentally safe (Carroll and Buchholtz 774). On the other hand, some business and communities dread “the winds of the „Wal-Mart Way‟” (Carroll and Buchholtz 774). Carroll and Buchholtz, quoting Kennedy Smith, state that „“downtowns will never again be the providers of the basic consumer goods and services they once were”‟ (774). One of the biggest complaints of communities is that Wal-Mart “kills” small “mom and pop” downtown merchants because they cannot compete with Wal-Mart‟s low prices (Carroll and Buchholtz 774).
These small stores have been around for years, and Wal-Mart just comes and takes over. Carroll and Buchholtz say that some retailers believe the methods that Wal-Mart uses/d to compete with their competitors left “bad tastes” in their mouths (775).
Retailers told Atlanta Journal-Constitution, that “Wal-Mart sent employees, wearing name tags and smocks, into their stores to scribble down prices and lists of merchandise” (Carroll and Buchholtz 775). Carroll and Buchholtz state that Wal-Mart began to carry some of the same merchandise that small retailers carried in their stores only at discount prices (775). Although Wal-Mart is typically very beneficial to small, underserved rural towns because of the “variety of product choices” and convenience, not every community feels a Wal-Mart
would benefit them (Carroll and Buchholtz 776). Some resort communities, such as Steamboat Springs, Colorado, felt that Wal-Mart‟s low-cost reputation just didn‟t fit in well with their community (Carroll and Buchholtz 774). Some communities opposed the expansions of WalMart to their areas because “they wanted to insulate their unique cultures from what they considered to be the offensive consumerism that is usually generated by Wal-Mart‟s presence (Carroll and Buchholtz 776).
After looking at both sides, I say that I am a supporter of Wal-Mart; I feel Wal-Mart is a “friend.” I have no opposition to the expansion of Wal-Mart stores throughout cities in the United States or other countries of the world. I do not feel like Wal-Mart is dooming our world. I am an avid shopper; I shop at Wal-Mart at least once every week, if not twice a week. If I were to sum Wal-Mart up in two words, they would be cheap and convenient. What more could one ask for?
As the economy changes, we, the population, change as well. As unemployment and the cost of living rises in this country, the ways we live our lives may change as well. We may have to cut back on spending or sacrifice things that once used to comfort us.
This is where Wal-Mart falls into play. I feel that Wal-Mart‟s low costs and convenience are comforts to the average consumer in our fast-paced lives. People look for ways to save money, and Wal-Mart takes the work out of that concept. “Wal-Mart‟s biggest and most obvious effect is that it offers lower prices to consumers (Basker 2005b).”
“The money that consumers save on purchases at WalMart” nutures “the demand for and enabling the consumption of new kinds of goods and services” (Paruchuri, Baum, and Potere 3-5). Increasing demand and consumption will not only be advantageous to Wal-Mart but to consumers as well. Consumers could benefit from the development of new products and services. Wal-Mart is not only a discount store; it is also a
large food retailer/grocery store. Consumers can go to one store for most of their needs. With small “mom and pop” stores, consumers may have to visit more than one store to fulfill all their needs on their grocery lists. It can become inconvenient and time consuming. I do feel empathy for small downtown “mom and pop” shops owners because no one wants his/her business to be unsuccessful.
Shop owners operate in hopes of serving their local community and to make a living. I feel as technology evolves, we, the population as a whole, should evolve as well. To me, most small “mom and pop” stores lack current technology. Most do not even have a computer in the shop. Our economy is becoming a computerized one. Computers are beginning to run our lives..
I feel we need this technology to thrive in life. If a company cannot or does not want to keep up with the changes in technology, then, they should probably stop competing. They should let the others that can keep up with these changes thrive and prosper.
They should not fight the inevitable. Wal-Mart uses an “extensive computer network system” that enables “round-the-clock inventory control and credit card sales control” (Carroll and Buchholtz 772). Carroll and Buchholtz state that Walton used the information he obtained from this system to determine the total sales of his products and where they sold (772). He knew what was selling and where it was selling. This tool is a great asset for any business owner, and I feel this helps Wal-Mart is its thrive of the nation.
WORKS CITED Carroll, Archie B., and Ann K. Buchholtz. Business & Society: Ethics and Stakeholder Management. 7th ed. Mason, OH: South-Western Cengage Learning, 2008. 35-776. Print. Paruchuri, Srikanth, Joel A.C Baum, and David Potere. "TheWal-Mart Effect:Wave of Destruction or Creative Destruction?" Economic Geography 85.2 (2009): 3-5. Academic Search Premier. Web. 7 July 2010. Useem, Jerry, Julie Schlosser, and Helen Kim. "One Nation Under Wal-Mart." Fortune 147.4 (2003): 6478. Academic Search Premier. Web. 7 July 2010.
Wal-Mart Stores, Inc. Annual Report. Bentonville, Arkansas: Wal-Mart Stores, Inc, 2009.