Walmart Management

Wal-Mart Management

Wal-Mart was a vision of founder Sam Walton. Using his keen business sense Mr. Walton toured many different retailers and learned what retailers where doing and what they should be doing to become better and more efficient. Walton was exposed to different companies' policies and procedures; in his travels and his own employment. Walton chose which of these policies he wanted to apply in his business that he envisioned opening one day. That business became a reality which was established in 1962 and named Wal-Mart. Later under Mr. Walton's guidance the company and its mission expanded. Sam's Club opened in 1983 and with that Wal-Mart strengthened its hold on the retail industry.

Wal-Mart grew quickly over the next forty years and became the world's largest retailer and also the world's largest private employer (Ghemawat et al.,). As they grew the company has been faced with many criticisms. One of the criticisms that Wal-Mart faces is its size. This relates directly to the fact that Wal-Mart is known for paying its employees low wages. It is thought that a company of this size could afford to pay higher more reasonable wages for the work they are doing. They also are charged with having a detrimental impact on the environment. This also has a lot to do with size. A company this large will make an impact in normal operations simply due to its size. Diversity is yet another criticism facing this retail giant. Wal-Mart was under scrutiny from activists as a sweat shop supporter. A major criticism facing Wal-Mart today is health insurance, or rather the lack of it for their employees. In fact, one employee couldn't afford to have health insurance through Wal-Mart as it would have subtracted approximately one-sixth of her weekly paycheck thus she had to rely on Medicaid. As a corporation Wal-Mart has done many things to counter act this negative image in recent years. However, this has fallen to even more criticism seen as simply a public relations ploy.

Turnover rate was a major issue for Wal-Mart; at one time it was as high as 44%. The retail giant also faced many lawsuits (Ghemawat et al.,). Wal-Mart's top management was charged with ethical violations. Another major issue facing Wal-Mart is that their top management seems to be divided against each other, personally as well as professionally. This fighting surely had an impact on the culture of Wal-Mart and flowed down the management chain effecting more than those assigned to corporate headquarters (Kapner, 2009). Bad publicity is another issue Wal-Mart has been faced with. Seen as somewhat of a bully forcing other companies to play nice or fail Wal-Mart's bad press is somewhat self imposed. They use size to leverage buying power and price other companies out of markets. This forces a supplier to provide them with low prices and eve exclusive products or the supplier fears they will not be given shelf space. Many of the issues that plagued Wal-Mart during this 2004 study hold true today. Wal-Mart is such a large organization that it is difficult for them to turn things around quickly. They are not a nimble and lean company like a speed boat, rather they are a freight carrying ocean liner and changing issues take time to navigate.

Lee Scott in October 2005 addressed several new priorities that the company would pursue. Some of which, he claimed, were to continue Sam Walton's philosophy of helping people in small town and rural America enjoy a similar quality of life as those who lived in the big cities. Scott addressed the criticism of Wal-Mart size by trying to understand where their critics were coming from. Scott claimed that they were helping these smaller areas because, "saving people money makes it so they can live better" as he claimed on walmartstores.com. It was no surprise that critics felt differently than management of Wal-Mart did, Wal-Mart's upper managers truly believe that they are following the wishes of Sam Walton. Critics believe that they are trampling on it by pricing out smaller stores with better pay and benefits for employees. Some critics also claim a loss of quality in Wal-Mart products due to price setting of suppliers by the retail giant. Scott expressed to critics that his management team spent a year listening to their concerns and the consensus was that Wal-Mart was still wanted to be an operating business however; critics still believed business the way Wal-Mart was doing things needed to change. In Scott's opinion they believed all business needed to change.

Hurricane Katrina became an area for Wal-Mart's management to point out that one of their Mississippi store managers was a heroine and worked to aid the victims. Pointing out that she did the right thing and that thousands of their associates also did the right thing, that this is a trait supposedly bred in Wal-Mart's culture. EDLP, everyday low pricing, was promised as a commitment to the customers. Jobs, healthcare, community involvement, product sourcing, diversity, and environment impact were all issues that Scott mentioned needed "to be viewed in a different light". In fact, much of his article pointed out issues and then related them back to hurricane Katrina. Perhaps these references were to soften the current image of Wal-Mart's management and humanize them. Although critics may only view it as a long shot attempt to save face in the wake of tragedy. Time will tell if Wal-Mart keeps these types of efforts up or just seizes opportunities as tragedy appears.

Wal-Mart has been making an effort in their public relations to change their image and will possibly continue to look for places to improve. However, critics like Paul Blank from wakeupwalmart.com claim, "...Wal-Mart's rhetoric doesn't match reality..." Scott claimed that one of Wal-Mart's new priorities was to put people first. He stated that creating an environment where diversity, innovation and excellence could flourish. Lee also claims that Wal-Mart is now a recognized leader in the solution to most pressing economic and social challenges. Scott cites that in response to the health care crisis the U.S. is in Wal-Mart is helping by providing $4 generic prescription drugs. Critics remain skeptical of these claims and disagree that Wal-Mart has done any real good with these programs.

Wal-Mart's strategy has always been growth. They believe the more stores they can build will be the answer to their greatest financial return. Wal-Mart is always searching the real estate market for future opportunities to develop more stores and thus they believe more profits. Another avenue for the future has been for Wal-Mart to offer financial services, new product