WalMart Case Analysis
Walmart has a very interesting state of existence because of its sheer size. For example, in the book it is mentioned that WalMart’s aggressive strategy of pushing prices down is responsible for reducing the world’s inflation by almost one percent in some years. As has been said in many different arenas of human existence, with great power comes great responsibility. Many would argue that in the time since WalMart has come to exist as the multinational power it is today, it has done nothing short of abuse its power and cause harm to the people it claims to help. However, although WalMart has not achieved perfection when it comes to social responsibility, it been reasonable enough that many of its actions are highly defensible, and, in many ways, the good outweighs the bad.
One of the arguments against WalMart’s strategy of price suppression is that by forcing manufacturers and suppliers to keep costs down, in order to maintain profitability, overseas manufacturing, even if it were inevitable, was accelerated by WalMart. The argument against this is that jobs are going overseas, presumably never to return. However, people neglect to think that the market for employment is pretty liquid. Yes, manufacturing may have moved overseas, but the company will still have offices here. People who would have been on manufacturing floors in the past today are working in offices doing data entry jobs, secretarial work, sales jobs, and other distribution-related things. To a certain extent, unskilled labor has to adapt to whatever the market can use it for. It’s not like people went to college to work at WalMart and their degrees are now worthless, as in some other professions.
WalMart, for the job that its employees do, pays an enviable and competitive wage. People forget that not everyone is going to be able to make $85,000 a year because not everyone is capable of generating that kind of value when they come to work. For some people, especially in parts of this nation where the cost of living is relatively low, that is a decent living wage, a wage they’d probably earn if they were manufacturing trinkets that are now mass-produced in China and Southeast Asia. Also, let’s even assume that their wages are cut by 10% because they work in these new jobs. If the cost of the goods that they buy goes down because they are manufactured elsewhere, perhaps by 10%, then everyone’s in the same boat. I don’t have any mathematical data to say whether this is the case, but it’s something about which no one thinks.
As far as the sexual harassment, WalMart made an excellent point. That can’t be a class-action lawsuit. Each situation is different – some managers may have been discriminating, and some not. You can’t apply discrimination across an entire company because WalMart did not have any kind of a policy against promoting women. It is most conceivable and probable that these were relatively localized incidents, but if over the course of a series of trials, a connection were to be found, only then can such a class-action type of connection be made. WalMart’s objection to a class-action lawsuit is highly valid, as the nature of the alleged discrimination is too specific to the individual.
Many people argue that WalMart’s employment practices are unfair, such as doctoring hours and having people stay later, sometimes off-the-clock, to avoid having to pay overtime pay and thus keep labor costs down. As someone that has been working for over six years in entry-level jobs for unskilled laborers while I’ve been in school, I can tell you that this is something that happens across the board. People that are willing to let their employers doctor their pay a little are often rewarded with better shifts. For instance, at Wendy’s, my checks were paid fortnightly. Let’s say I worked 44 hours in one week, and in the next week worked only 35. My employer, in front of my face or not, would take
Last night, I went to ShopRite to get groceries. I love the ShopRite in my town – the one in West Long Branch, not so much. As I was walking through, I had the WalMart bar codes in my head and the logistics of all that in my mind. Walking through the aisles, the store was out of a total of nine things that I wanted to buy. I can’t help but think that if I were willing and able to drive to the WalMart in Neptune, they’d probably have had those things. WalMart does things that are extraordinarily convenient for the consumer often without them realizing it. The fact is that they are simply the best at what they do – giving you what you need when you need it. God forbid if WalMart were to get a liquor license (30-pack of Miller Lite for $10.00?).
As far as bribing government officials in Mexico, bribes in Mexico are as ubiquitous as Corona, Sol and José Cuervo. That is historically and culturally how business is done, and WalMart can do more by playing the game and afterwards attempting to change the rules than trying to play by American rules in the Mexican board game. Many American companies have had to bribe local officials in order to do business abroad, and there are loopholes in the FCPA that allow you to bribe if it can be shown that it was necessary for the conduction of normal business. WalMart wasn’t trying to get around the law, just to expedite its expansion into the market. That is not criminal, and I certainly hope it never will be.
Overall, WalMart is doing what it can and is adapting quickly to modern laws and social expectations. No company will ever be perfect, it’s just likely that WalMart will get the most flak because it is such a large company under the influence of which so many things can go right or wrong. We also need to take much of the criticism against WalMart with a grain of salt because it is very typical for everyone to go after the person on top because of envy rather than legitimate social and legal concerns.