Business and Society Case #1 Walmart PDF

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Wal-Mart Case Study Problem and Issue Identification 1. What are the central facts of the case? What assumptions are you making about these facts? Sam Walton was the founder of a retail store he called Wal-Mart. When Walmart first start out people were excited, low prices and nice customer service. When Walton had a put a new store in a city, it would make smaller locally owned businesses close down. Then people weren’t so excited about that. As Walton’s stores started to expand moving from city to city, people were starting to organize groups, to stop them from coming to their city. 2. What is the major overriding issue in the case? What major question or issues does this case address? Some of the major issues wal-mart had in this study was mostly from people. After Wal-Mart really started to expand the people living in the towns. They would say that the store takes the small town feeling away. Townspeople started organizing groups opposing further Wal-Mart expansion. Sometimes it’s not just the people living in the city that doesn’t was a Wal-Mart, it’s the whole entire town. A website was created called “Sprawl Busters”, the website is for people to deal their fights on Wal-Mart. Wal-Mart also gave people the citizens within the city issues too. Every time a Wal-Mart was built in a city it would take out other locally owned stores. Which is why there are some cities that won’t let them expand in. 3. What sub-issues or related issues are present in the case that merit consideration now? WalMart has had a few issues throughout the years. One if the issues was bribery and that happened down in Mexico. They were caught bribing Mexican officials to get them building permits faster, and for other favors. There are also potential Bribery cases in a few other international stores. Wal-MArt also had some problems when it came to Labor Practices. They would have workers work off the clock and not get paid overtime, and workers were making a wage that they couldn’t live off of.

Analyzing and Evaluation 1. Who are the stakeholders in the case and what are their stakes (i.e. issues and/or interest)? What challenges, threats, or opportunities are posed by these stakeholders?

One of the main stakeholders in this case are the customers. The customers get cheaper products from walmart rather than paying higher prices from local stores. Some customers enjoy getting cheaper products from Walmart instead of price gauging local businesses. Other customers don't like how Walmart comes through their town and takes over business and uses products from overseas versus american made products. Many people think Walmart will destroy their town if Walmart comes into town. Employees of Walmart are stakeholders as the more Walmarts are built the more jobs there will be available for employment. The walmart employees get an opportunity to obtain a job that does not pay a lot, but they still get a job and Walmart gives benefits. Competing businesses are stakeholders in Wal-Mart, because Wal-Mart takes a lot of their business and their business is decided of Walmart's lack of success. These local business are threatened by Walmart coming into town.

2. What economic, legal, ethical, and philanthropic responsibilities does the company have, and what is the nature and extent of these responsibilities? Walmart has a economic responsibility to sell affordable products and to bring in money for its shareholders. Walmart has the responsibility to have lower prices as they come into towns to run business of of business that charge high prices. Walmart has a legal responsibility to follow labor laws and other laws in business. They have the ethical responsibility to treat employees correctly. Walmart is ethically responsible for running smaller businesses out of town with their lower prices. Walmart has the philanthropic responsibility to give back to the community as Wal-Mart comes to a small town and can control the market in the town. 3. If the case involves company actions, evaluate what the company did or did not do in handling the issue affecting it. In this case Wal-Mart was accused for bringing in products from overseas and taking away American Jobs, giving them to overseas manufactures. Walmart reacted to this as Sam implemented the “Buy American” plan. This plan made Walmart buy more and sell more products domestically. This resulted in a better public image and a estimated 4,538 jobs according to John Huey, “America’s Most Successful Merchant.”

Recommendations 1. What recommendations do you have for the case? If a company’s strategies or actions are involved, should the company have acted as it did?

What action should the company take now? Why? Be a specific as possible. List several options as well as the pros and cons of each alternative. Be prepared to discuss why you eliminated those options you discarded and defend your chosen alternative. Mention and discuss any important implementation considerations. The last step is crucial because recommendations that can’t be implemented are worthless. Throughout reading the Walmart case, Walmart was overall an ethical company that gives back. We feel that Walmart should keep going down the path they are currently on because it has had a beneficial impact on revenue, communities surrounding, and overall growth of the company. Walmart should continue with the Walmart way by giving great customer service, exceeding expectation, making a difference, and making the customers feel at home. Walmart should also continue in the footsteps of Sam Walton by always putting the customers before the bottom line. Walmart has not always been perfect in regards to bribery and labor condition, but Walmart looks after the greater good. With regards to some of these unethical practices, we think Walmart should keep everything legal and not fall to social norms of big business. Lastly Walmart should put more stake in their local communities by buying more local and American made products to benefit the customers around them. If Walmart makes a few small changes it will surpass expectations and continue in its uphill growth.

WAL-MART CASE ANALYSIS QUESTIONS 1. What are the major issues in this case? Assess Walmart’s corporate social responsibility using the four-part CSR model. Is Walmart socially responsible despite having a devastating impact on small merchants? What about its impact on communities in terms of sprawl, traffic congestion, and impact on the appearance of the environment? What responsibility, if any, does the company have to these merchants or to the communities it enters? The major issues addressed in this case are the impact a big business has, the overall size of walmart in relation to revenue, cost saving measures, and national lack of social responsibility. Walmart is seen as very large business which has extreme impacts on small communities it moves into. When Walmart takes over a community it lure in all surrounding customers with friendly service and discount prices. By take the towns customer pool small-town merchants have no other option than to shut their doors and close up shop. This act of bulldozing into small-towns leaves empty shops, unemployment, and division among town residents in it’s path. This bulldozing is seen as a bad act, but Walmart doesn’t really owe the merchants in these small towns anything. Walmart is a powerhouse that didn’t get to the top being courteous to it competitors, they are called competitors not friends. In relation to small-town takeovers,

Walmart is also stepping up it’s game and talking over country's. Some have referred to Walmart as “Placet Walmart” because of it’s growth, size, and over revenue dominance. Walmart on average makes $36 million dollars an hour and could flourish as their own independent nation with their 10,800 stores. As Walmart continuously dominates the globe some of their promises have fallen short, such as “Buy America” and their “Environmental Awareness” campaign. Walmart promised to buy more made in America items, but shortly thereafter abandoned this program to increase their purchases of chinese goods overseas. A another program that was abandoned is Environmental Awareness which was suppose to increase awareness to customers and offer environmentally safer products. This campaign eventually fell by the wayside and was not fully carried out.The expansion has also hurt Walmart bring some labor practices, working conditions, and bribery scandals into the light. Some companies accused Walmart of paying works to little, taking advantage in illegal immigrants, and discrimination against women. Another allegation was that Walmart was not mindful of its subcontractors working conditions which led to a fire in Bangladesh. Walmart was also caught bribing Mexican officials for permits and other favors which is illegal. As I mentioned earlier Walmart's bulldozes towns, figuratively and physically, to gain a profit, but their are great expenses that come with profits. The main expenses Walmart causes is traffic congestion and the population associated with it. Walmart customers, employees, and deliveries congest small towns leaving car emissions in their wake. It is also said that Walmart has “strip-mined” town's culture and values make them look different. When a Walmart comes to town they build up their stores while shutting others down, they demolish beautiful landscapes around them, and they create a cheaper looking landscape in regards to nature but also customers. Walmart is not all bad though because it has contributed in all four parts of the CSR model. First the company is every economically responsible and with their revenue growth trend I see no stopping anytime soon. Second in regards to legally being responsible Walmart did face a bribery scandal but their has been no outcome thus far. Third is ethics, which Walmart is seen as being on the fence when it comes to being ethically responsible in the workplace. As I stated earlier Walmart has had some scandals when it comes to workplace ethics and overseas conditions, but Walmart’s founder was seen to be very ethically responsible. Sam Walton treated all of his employees with respect and was committed to putting the customers first. 2. Sam Walton has been called a motivational genius. After reading this case, and with what you have observed at your local Walmart store, explain how this motivational genius empowered the employee. What is the “Walmart Way”? What has happened now that Sam is no longer around to visit the stores? Sam Walton was seen as a leader to everyone around him and gave his employees something to work for. He empowered employees in three key ways by

being an ethical leader, giving employees the skills they needed to succeed, and giving room for employees to grow. Sam himself set a good example of being ethical by never cutting corners, being enthusiastic, and being committed which the employees would model. Sam also trained his employees giving them the tools they needed to achieve, which eventually meant moving up within the organization. Sam also put into place the “Walmart Way” which is a reflection of essential Walmart culture that is needed for success. The “Walmart Way” was also described as exceeding customers expectations, helping make a difference, and the proponent ten foot rule of greet a customer and helping them out if needed. As a result of Sam not being around the “Walmart Way” and other positive impliment have fall off the wagon. The absence of Sam can be seen in items like the bribery scandal, unfair labor practices, and the over decrease in customer satisfaction. 3. Walmart was an early leader in the area of corporate social responsibility. How do the early “Buy American” program and the “Environmental Awareness” Walmart’s “Buy American” program and “Environmental Campaign” are both great examples of corporate social responsibility. Walmart’s efforts to buy American made products is a very good example of corporate social responsibility because it campaign illustrate this? Were these programs actually examples of corporate social responsibility or were they gimmicks to entice customers into the stores? Are the benefits of its more recent corporate citizenship programs offset by the company’s detrimental impact on merchants?shows a concerted effort by Walmart to assist in the economical development of communities in the United States. Walmart does not have to assist in this development but it shows a sense of caring for the society in which they operate. Walmart’s environmental awareness campaign is another good example corporate social responsibility because it promotes sustainability. A lack of sustainability on behalf of corporations is not beneficial to any stakeholder. We believe that these programs were an actual example of corporate social responsibility because we do not think they were beneficial in getting customers into the store. People shop at Walmart because of the low prices and Walmart knows this. American made products and/or environmentally safe products are going to be more expensive so the average Walmart customer is not going to purchase them. We believe that Walmart knew they would see less sales on these products and went through with these programs anyways because they thought it was the right thing to do. We believe that Walmart’s most recent programs are enough to offset the detrimental impact they have had. These programs provide many good things for the communities they move into such as education and scholarships. 4. Walmart continues to find severe resistance to its expansion into New England and California. Define the true goals of the opponents of Walmart.

Include a consideration of the following: A. stopping Walmart’s expansion B. preserving the status quo (e.g., downtown community and social fabric), C. developing a cause that will pay their bills, D. fighting for an ideology, or something else E. what should Walmart do? The true goals off opponents of Walmart differ from opponent to opponent. Local business owners oppose Walmart because they know that the low prices Walmart offers will seriously hamper their sales and could potentially put them out of business. Residents that oppose Walmart moving into their communities oppose Walmart because they believe that a “cheap store” does not fit into their community. They believe that the downtown community and social fabric they are use to would be disrupted by Walmart and that a small town ideology would not survive with a large corporation in town. We believe that if Walmart continues to offer competitive pricing and continues to give back to communities they are located in more and more communities will allow them to move into their towns. 5. What is your assessment of competitors secretly hiring consulting firms to block Walmart’s entry into new communities? Is this an ethical practice? Is this a fair practice with respect to competitor stakeholders? We believe that the process of secretly hiring firms to block Walmart’s entry into new communities is and unethical and unfair practice. By calling local politicians urging them to stop the invasion of Walmart they were misrepresenting the interest of the community, which is unfair to the local stakeholders. By hiring lawyers and traffic experts to stall or derail projects they were essentially using bribery which is considered unethical. 6. Do your own research to update Walmart’s situation in the Mexican bribery scandal, the fire in Bangladesh, the plan to “Buy more American,” and the campaign to tell its “American Success Story.” Has Walmart made progress or have things gotten worse? Based off my research of the tragic experiences, Walmart has taken action to resolve the scandals. In the Mexican bribery scandal, Walmart has agreed to pay $300 million to resolve the case. Things may be turning for the worse as for the Bangladesh fire case because Walmart refuses to take responsibility for their actions. In the Buy More American plan, Walmart’s commitment to buy products supporting American job is having a tangible impact on communities across America. Lastly in the American Success Story, this has helped improve the Walmart name and become more

successful. 7. When you are the largest company in the world, how do you protect yourself against criticism? Does it seem that no matter how hard you try, it’s hard to make things better? No matter how hard the largest company in America tries criticism will happen based off the Global population. As technology increases, the ability to access social media platforms gives you an opportunity to express their opinion of Walmart. One issue an individual may have can be based off one situation from another consumer. Luckily, Walmart has a positive and helpful social media platform that will assist your experience at the largest company in the world. You can’t promise full global support but things are able to get better....