1. Identify the primary issues facing Wal-Mart. Should Wal-Mart have been able to anticipate the issues it now face?
The primary issues facing Wal-Mart relate to the relationship it has with the public. The company is so massive that it has a profound effect on the nation’s economy and the quality of life of those in the area, whether it is businesses or the people. This puts it at the center of criticism, and the company is consistently ridiculed. While hindsight is 20/20, I think Wal-Mart could have initiated community efforts earlier, such as what it did for relief during Hurricane Katrina. The public relations efforts should have been there from the start, but I suppose an increase in environmental awareness and the ability to organize lobby groups through mediums such as the Internet, has increased the power of those who oppose Wal-Mart. This is an evolution that Wal-Mart wasn’t prepared for. The practices that Wal-Mart had would have likely been relatively undetected until the 1990s, but social media has increased its exposure to the public and has increased the power of lobby groups.
2a. Which interests are opposed to Wal-Mart and what are their costs of organizing for nonmarket action?
Small business were opposed to Wal-Mart, and so too were the unions, NIMBY groups and organizations aligned with the unions. The Service Employees International Union pledges $1 million to fund a campaign against Wal-Mart. Six unions also funded a $25-million campaign against Wal-Mart.
b. Which interests are aligned with Wal-Mart and what are their costs of organizing for nonmarket action?
The interests of the workers for Wal-Mart were aligned with the company, as it was a massive employer. Also, many politicians and the general public believed Wal-Mart benefitted the economy by providing many jobs. Also, Wal-Mart was paying for initiatives in the community such as a $45-million scholarship fund, for example. The costs to Wal-Mart were in settlement amounts and for defending themselves against the critics. For example, the company needed to make a video in response to a damning video against the company.
3a. In which institutional arena will the issues be resolved?
Many of the issues are resolved in the courts, as the so-called transgressions of Wal-Mart are brought to light. They are either settled in court or with out-of-court settlements. The courts also play a role in determining if Wal-Mart is in neglect of the environment, for example.
b. What role will government institutions play?
The government plays a role by either allowing or vetoing legislation that requires Wal-Mart to participate in initiatives such as providing health insurance for its workers. The government also plays a part in funding many of the initiatives against Wal-Mart. Also, municipal government can approve or not approve zoning changes for Wal-Mart to open new locations. City council can also not allow Wal-Mart to operate, and the public can speak out at public hearings.
4a. How effective has Wal-Mart’s strategy been in addressing the pressures on the company?
Wal-Mart has made changes to its practices, particularly since after the case study was written. The company now has to complete economic impact studies, and it has to have a close eye on its environmental footprint. It also changed its lunch break policy, as well as the practice of hiring illegal labor. This has kept negative press about Wal-Mart largely out of the news, and the company has been viewed as helping Americans support themselves and find work during the recession. Efforts at Hurricane Katrina also appear to have helped.
b. How will the likely resolutions of these issues affect Wal-Mart’s ability to execute its market strategy?
This will have both benefits and drawbacks for the company. The net profits will likely not be as large, because it is paying more for workers and for public relations. However, it is likely paying less on legal settlements. The store is likely also more welcome in communities because of its improved public image.
5. Should Wal-Mart stop its opposition to the unionization of its associates?
It shouldn’t stop the opposition because the unions lobbying against Wal-Mart haven’t succeeded full-scale. The settlements that Wal-Mart has paid aren’t more expensive than what the company would be paying if employee wages were bumped due to unionization of its workers. Further, the workers have largely voted against unionizing.
6. Should Wal-Mart agree to independent inspections of its suppliers’ factories?
Yes. For public image, Wal-Mart should agree. Furthermore, it should agree for ethical reasons. It shouldn’t have subpar working conditions.
7a. Should Wal-Mart select its employees based on their expected health care costs?
No. It is unethical for Wal-Mart to choose employees because of health concerns. The company should not discriminate, and I believe it hasn’t. Relatively recently, the company has hired many special needs people.
b. Should it include physical work in every job?
I like the idea of included pushing carts in everyone’s job. Physical activity is a good idea to have in any line of work, as exercise can decrease stress and improve employee physical health.
8a. What should Wal-Mart do about the environmental pressures it faces?
Wal-Mart has a lot of money. Conducting environmental impact studies shouldn’t affect its bottom line. It should create an environmental analysis of the impact of its fleet, and its stores. It should hire an outside agency to make recommendations about how the store can limit its environmental footprint.
b. Should it undertake environmental initiatives?
Other than the environmental impact studies, the company should spearhead an electric fleet of vehicles, if that is viable. The company can really improve its public image if it participates in initiatives such as that. Its efforts with relief for Hurricane Katrina really helped, but that is not entirely the type of environmental effort to which this question is referring.
9a. What should Wal-Mart do in the aftermath of the Wal-Mart bill in Maryland?
The Wal-Mart bill has been vetoed. But if it weren’t the company should have appealed the decision in court. The 8 per cent is a bit much to ask, and I guess that is why it was vetoed.
b. Should it switch its distribution center to another state?
If the bill stuck, it could have moved its distribution center to mitigate some of the costs.
c. What should it do about similar bills in other states?
All the company can do is appeal the bills in court. If it doesn’t succeed, the company has enough money to pay for the new rules outlined in the legislation.
10a. Should Wal-Mart make concessions to improve the chances for approval of its industrial bank application in Utah? For example, should it pledge not to open branch banks?
The company shouldn’t open branch banks. Wal-Mart should be satisfied with its billions of profits, and it should stop growing. Either that, or it should make its stores nicer, because big box stores such as these are an eyesore. The company is getting pretty greedy with all these expansion efforts and it is taking away business from small companies.