Strategic and Business Goal, Economic

¶ … strategic and business goal, economic and labor market conditions, and explanation of specific HR-related situations facing the organization and to perform an analysis of the organization and recommednd appropriate practices for alleviating the HR situations and for facilitation the achievement of the business goals.

The Wal-Mart Stores -- Company Description

Wal-Mart is without any doubt the largest retailer within the United States. And aside from being this retail monolith, it is also an American icon. Sam Walton's vision changed the face of shopping for ever, and not only within the United States, but throughout the world.

Wal-Mart was established in 1962 in Rogers, Arkansas by Sam Walton, who had a vision of creating a store to sell all commodities necessary to the general population, to offer his merchandise at affordable prices and to create a pleasant and nurturing working environment. Today, Wal-Mart's motto is "Save money. Live better" and the primary scope remains that of offering the lowest prices on the sold commodities.

Throughout the years, the company has been faced with multiple accusations, most of them regarding the strong commitment to low price, which in many instances, has materialized in losses for the stakeholders. Robert Greenwald's documentary "Wal-Mart: The High Cost of Low Price" (2005) reveals some of these accusations. For once, the employees argue that they work on minimum wage and that they do not receive medical insurance. Then, customers have often complained about the quality of the products -- which are said to be imported in unsafe and sometimes unsanitary conditions from various global regions which reveal comparative advantages.

Also, there have been accusations referring to the safety of the Wal-Mart employees and the Wal-Mart customers. Interviewed people in the documentary argued that the Wal-Mart stores are filled with security guards and surveillance cameras, to make sure that the risk of theft is minimized. Yet, the parking lots are poorly lighted and not guarded. On several occasions, customers or employees have been attacked, robbed, injured or even killed.

Wal-Mart has even been accused of damaging the socio-economic stability of the communities in which it operated. While the company argues that it promotes the development of these communities, some disclaimers argue that the mom and pop stores, also part of the American culture, become unable to compete with the low prices implemented by the retail monolith, and that this leads to the bankruptcy of thousands of American families.

Yet, in spite of these accusations, the Wal-Mart stores continue to thrive. And this is specifically because they identify and serve a stringent need of the modern day community -- the need for speedy shopping in a single place and the need for cost efficiencies. The corporate logo of Wal-Mart is that of "Saving people money so they can live better." This vision drove Sam Walton into success more than four decades ago and this vision continues to drive business at today's Wal-Mart.

"Today, this mission is more important than ever to our customers and members around the world. We work hard every day in all our markets to deliver on this promise. We operate with the same level of integrity and respect that Mr. Sam put in place. It is because of these values and culture that Wal-Mart continues to make a difference in the lives of our customers, members and associates" (Wal-Mart Stores Website, 2010).

The company promotes itself through three economic roles. The first one is that of creating opportunities for development within the communities in which Wal-Mart operates. The second is that of being a price leader within the industry in which it operates. The third is that of allowing American families to better manage their finances by reducing their living costs.

Wal-Mart has recently intensified its efforts of expansion. The company has identified the need for efficient shopping outside of the United States as well and has strived to satisfy it. The expansion strategy was also constructed on the belief that the foreign markets would present the retailer with various comparative advantages, such as an increased purchasing power on the part of the customers, cost efficient commodities or a cost efficient labor force.

Yet, in spite of the foreseen success, the international expansion strategy has been met with reticence. The most relevant failure has been registered in Germany, where the store was forced to close its subsidiary. In Europe generally, Wal-Mart faces intense competition from regional superstores, such as Metro or Carrefour. Today, Wal-Mart is present in 14 countries outside the United States and the results of the international division accounts for 24 per cent of the group's entire revenues (Wal-Mart 2009 Annual Report).

Wal-Mart employs over 2 million individual worldwide. The Wal-Mart employees are referred to as associates and this is done out of both a sense of respect, as well as the realization of the important role played by the employees in the creation of organizational success. Wal-Mart argues that one of its goals is that of making the world a better place for its customers, shareholders, but also for its associates. The organization addresses the prospective employees through various channels, including the most recent internet recruiting.

The company lures future associates through the promise of several benefits. These benefits are generally divided into two categories: health and wellness benefits and financial benefits. The first category of benefits includes medical coverage, dental insurance, business travel insurance, disability coverage or illness protection. The financial incentives include a stock purchase plan, a retirement account rollover, discounts on purchases, paid holidays, Wal-Mart profit sharing and the 401 K. plan (The Wal-Mart Stores Website).

Still, despite these benefits, the company continues to encounters several critical aspects in its approach of the employees. In other words, there are several human resource issues which should be addressed. Some of the more noteworthy ones include:

(a) Lack of financial incentives -- the Wal-Mart employees are paid minimum wage and their levels of on-the-job satisfaction are decreased. While this strategy is recognized as necessary in the maintenance of the lowest retail prices, it should also be recognized that it creates internal tensions.

On the one hand, there is the dissatisfaction revealed in the relationship with the employer, represented by the managers. Employees will tend to reduce their commitment to completing the tasks assigned to them by their supervisors. On the other hand, the dissatisfaction of the staff members would be felt in the relationship with the customers. Not being able to benefit from the proper assistance, the customers' satisfaction would also decrease, all to impact the final profitability levels of the corporation.

This status quo points to a situation in which the retail giant cannot afford to not address the problem of employee dissatisfaction. In other words, with the implied risks of increasing operational costs, it is recommendable for the company to present its associates with more financial incentives.

(b) Lack of non-financial incentives -- the Wal-Mart employees often argue that the medical insurance they receive from the employer is insufficient and that they often have to pay for the medical services from their own pockets. Also, there have been complaints according to which the treatment of the employees is far from being equal. According to the current and former employees at Wal-Mart interviewed in Greenwald's documentary, the company favors white males for promotions in managerial positions. Women and different ethnicities are said to be discriminated against.