Wal Mart Inc Under Attack Case Study

  • Length: 8 pages
  • Sources: 3
  • Subject: Business
  • Type: Case Study
  • Paper: #25273867

Excerpt from Case Study :

Wal-Mart may find that it is not able to "rollback prices" to compete with discount underwriters. One key opportunity for Wal-Mart is to focus on social welfare to improve their stature within the various communities Wal-Mart is located.

Problem Definition

As was stated at the outset Wal-Mart is one of the most reviled corporations within the United States. For the various reasons previously stated, Wal-Mart has attained a vastly negative reputation within certain areas of the United States. This section will identify the problem as developed through the analysis, explain what is the intended accomplishment for proposing various solutions and examination of the root causes. It is important to determine the cause of the problem before alternative solutions can be addressed.

The root cause of Wal-Mart's negative persona is found in its dominance in smaller retail markets. Wal-Mart does not garner any fans when it arrives in a previously undisturbed rural or suburban setting, muscle into the competitions market space and proceed to undercut other businesses to the point where the competition can simply not compete on a business level with Wal-Mart. As a result, Wal-Mart has put numerous smaller retail stores and countless "Mom and Pop" stores out of business, costing communities jobs. Wal-Mart counters their stores provide hundreds of jobs for communities. This is refuted by pointing out that a 2005 memo circulated around the upper levels of management at Wal-Mart hypothesized various ways the company could save money and the number one model was to cut the wages and benefits of the employees. Information like this combined with the perspective of Wal-Mart being nothing more than a "corporate bully" lend themselves to the negative impression Wal-Mart is currently attached to.

There are solutions that Wal-Mart can implement in order to reverse this negative association and damage to its business reputation. By focusing on social welfare, Wal-Mart will be able to improve its standing and approval ratings within certain aspects of the community. By highlighting the positive influences through marketing campaigns, public awareness programs and media projects, Wal-Mart will place itself within a position to dramaticaly increase its stature.

Alternative Solutions

Currently, Wal-Mart is on pace to have another record year in terms of earnings, despite the lagging economic conditions stemming from the near economic implosion of 2008. Therefore, it is imperative to address various alternative solutions to the company's likewise lagging approval ratings among certain interest groups. First and foremost could be a reevaluation of Wal-Mart's ultra-competitive and hyper-aggressive business model and corporate culture (McGahn, 2004).

The first rule of business is to be competitive, however, when competition comes at the expense of local communities and stores that have been part of a communities very fabric for generations, Wal-Mart's ubercompetitive nature should be reexamined. The current culture of Wal-Mart creates the image of a bully and a tyrant along with a company that tramples on the rights of its workers for the sake of the bottom-line. Wal-Mart must project an image of understanding to the needs of the customer, the community and to the employee.

Wal-Mart must also re-examine the nature of its charitable contributions. Wal-Mart claims in its corporate filings to donate over $100 million to charities such as the United Way, however this figure is the result of individual employee contributions, not direct contributions from the direct funds of Wal-Mart. Wal-Mart must improve its philanthropic operations to foster the image of an organization that can balance the intense competition of the retail space but also provide much needed charitable work to improve its standing within the community (Van, 2008). With their current charitable giving, it appears that Wal-Mart is not only uncaring but also "cheap" in that it relies on employee contributions when the company is making millions. The final solution for Wal-Mart could be a modification of the company's policy toward unions.

Currently Wal-Mart will not allow employees to discuss the prospect of unionization. Therefore, this gives the impression, Wal-Mart does not care about the rights of its workers. If Wal-Mart made strides in modifying this attitude it would make significant changes in the attitudes many individuals and groups have regarding the retailer (McGahn, 2008).

Conclusion

Wal-Mart is an inherently complex, fascinating case study in Capitalism vs. social perception. From a clearly text-book economic standpoint, Wal-Mart is a classic case of a business providing goods and services at lower prices than their competition and satisfying various needs for the consumer. However, the question remains: to what degree does Wal-Mart's policies, cultures and behaviors factor into and directly cause such a harsh negative attitude toward the company?

The answer can be readily seen in the analysis provided herein. Wal-Mart has an extremely aggressive corporate culture aimed specifically at extending Wal-Mart's brand recognition and dominance within the markets it integrates itself into. However, this competitive model and culture has lead to significant negative impressions of the company as corporate bully and tyrant. Wal-Mart's claims about putting people to work is a misnomer when considering the fact that Wal-Mart puts the smaller more local retailers out of business in a community in order ensure Wal-Mart is the dominate retailer in the area. As described in this analysis, this attitude is not only limited to the United States, Wal-Mart has taken this aggressive attitude to Europe as well.

Wal-Mart does have many strengths as well as weaknesses. However, if Wal-Mart is to rectify its negative impression among individuals and groups it must radically alter this perception of an over-eager, corporate raider. Wal-Mart must examine its corporate culture and determine if it wants to improve its public persona or continue on the path that has lead to this negative relationship in the first place. Furthermore, Wal-Mart must improve its philanthropic activities. No longer must the company equate employee contributions as charitable donations incurred by the company, this makes Wal-Mart look cheap and uncaring.

Lastly, Wal-Mart must improve its attitude toward collective bargaining and employee unionization. Current attitudes toward unionization give Wal-Mart the stigma of not caring about its employees. This perception makes it difficult to improve Wal-Mart's persona. Change corporate attitudes toward unionization will greatly improve Wal-Mart's perception in the community.

References

Camerius, J., & Hunger, J.D. (2009). Wal-Mart Stores, Inc. Under Attack. Strategic Management and Business Policy Achieving Sustainability (pp. 2-28). New…

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