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NORTHCENTRAL UNIVERSITY

ASSIGNMENT COVER SHEET

Learner: Mishelle Gray


THIS FORM MUST BE COMPLETELY FILLED IN

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MGT7019-2 Dr. Jo Ann Davis

Wal-Mart Case Study Activity #2

Faculty Use Only


Wal-Mart Case Study

Mishelle Gray

MGT7019

Submitted to Northcentral University

December 06, 2010


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Wal-Mart Case Study

Abstract

Wal-Mart claims to have a social responsibility, the company has had a devastating impact on

small merchants and the environment. The purpose of this paper is to provide the reader with an

understanding of the impact Wal-Mart has on the local community as well as the environment.

Furthermore, this report will concentrate on the following topics: (a) evaluate the findings of the

case study Wal-Mart, Main Street Merchant of Doom, (b) review the commonalities and

differences between the two parties (Wal-Mart and small merchants), (c) discuss methods that

can be employed by Wal-Mart to aid in reducing the negative impact on the environment, local

merchants and the community, and (d) the importance of improving relationships with the local

merchants as well as being a more environmentally friendly company.


Evaluation Findings

An evaluation of actions that a company may take to meet ethical considerations relative

to social performance, financial performance, and reputation will be discussed. Assessing the

extent to which social, ethical and public issues must be considered within an internal and

external relationship with stakeholders. The issues surrounding the environment and community

of Wal- Mart’s social responsibilities has caused a disturbing outcome on many of the small

merchants. Wal-Mart faces challenges such as ethical issues, wages, labor rights violation,

gender discrimination, and preservations. Moreover, this essay will discuss ways that Wal-Mart

can enhance quality of life for citizens and by building relationship with local merchants and out

in communities across the globe.

According to Carroll and Buchholtz (2009), the single most notable challenge that Wal-

Mart faces today is repairing the battered reputation. Across the country, local citizens are

forming groups in an effort to stop the large Wal-Mart Supercenters from gaining a foothold in

their community. One example occurred when Wal-Mart attempted to construct a large

Supercenter in Boulder, Colorado. Across the country, local citizens are forming groups in an

effort to stop the large Wal-Mart Supercenters from ever gaining a foothold in their community.

One example occurred when Wal-Mart attempted to construct a large Supercenter in Boulder,

Colorado. According to Carroll and Buchholtz (2009) organizers begin a protest to stop Wal-

Mart’s entrance into Boulder, Colorado. This situation was somewhat different from the

downtown merchants that faced the possibility of being forced out of business by Wal-Mart.

Over the years, Wal-Mart’s decisions influenced wages and working conditions across a

wide swath of world economy. Wal-Mart was founded by Sam Walton in 1962 applying
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Wal-Mart Case Study
knowledge he adopted from the J. C. Penny idea for middle class Americans. The Wal-Mart

chains consist of large and small stores that are American public corporations making the

corporation the world’s largest public corporation raising outstanding revenues in retail. Wal-

Mart has been named the largest supplier for grocery retailers also in the United States.

However, later Wal-Mart incorporated in 1969. In addition, Wal-Mart became a part of the New

York Stock Exchange back in 1972 according to Carroll and Buchholtz (2009). Although Wal-

Mart has been known for its outstanding revenue and sales, Wal-Mart has also had some

controversy.

Wal-Mart has been continually criticized by different community groups, labor unions,

women’s rights groups and more. The retail giant reforms his corporate practice because of the

many accusations made towards Wal-Mart at that time. However, Wal-Mart continues to adopt

an image for developing markets that were highly saturated, and the developing markets would

offer higher growth with a lower margin for consumers.

According to Carroll and Buchholtz (2009) Walton, was influenced to invest in the best

technology network system available to ensure round the clock inventory control within his

stores. Wal-Mart became the world’s largest retailer by 2001 with $191 billion dollars in sales.

In addition, another ongoing challenge Wal-Mart faced was when the development of new

products in the global economy established a long-term marketing investment strategy for brand

name products and services by continuing to improve products and services to maintain the

competitive edge of its competitors. This was because of their low rates for employee health

benefits and insurance, alleged sexism, and more.

The Commonalities and Differences between the two parties


Wal- Mart is one of the world’s leading and most profitable conglomerates in the world

employing over 1.2 million employees with annual net revenue over $256.3 billion dollars

(Carroll & Buchholz, 2009). Traditional western communities have thrived commercially in city

centers. The centers are traditionally composed of a mix of retail, commercial and office space

(Sheehy, 2004). The majority of the commerce in these city centers is transacted primarily

through small businesses (Sheehy, 2004). These businesses have a tendency to be highly

involved in the local community, create various types of jobs that pay modest salaries that enable

the employee to sustain a reasonable standard of living, pay taxes, is innovative, community

building in the sense of promoting ideas, these local business owners have and express the true

entrepreneurial spirit.

Sam Walton also implemented the “Buy American Plan” and the environmental

awareness campaign providing bigger opportunities, and responsibilities as a merchant. Sam

Walton bought cheaper foreign goods, which allowed him to supply his customers with a low-

cost quality of goods. Instead of purchasing goods from overseas manufacturers he solicited

foreign items challenging his competitors. The way smaller merchant do business is different for

the way Wal-Mart ran their operation

Reducing the Negative impact on the Environment and Small Merchants

To avoid negative effects on communities, some county leaders may not allow Wal-Mart

to enter; Boulder County in Colorado is one such example (Carroll, & Buchholtz, 2009).

Consequently, the question of whether or not Wal-Mart reduces social capital is an important

question for community leaders and local businesses to ask and must answer before eliminating a

business opportunity from ever entering their community (Ran & Largay, 2009). According to

Jia, (2008), stated that Wal-Mart has implemented key changes with stores like Costco, Carre

Four SA, and target retailers so that it can keep its competitive edge over their competition of
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Wal-Mart Case Study
how each one is conducting business. Jia, also stated that changes were imperative due to how

people spend.

According to Ran and Largay, (2009) research, leaders must weigh and take under

consideration all aspects of Wal-Mart’s entering into their communities is good for the

communities. Change in one’s income, entrepreneurship, employment, and social capital may

be a result in deciding if supporting Wal-Mart’s would be beneficial. Wal-Mart is constantly

changing and adapting to community pressures and concerns. For example, the corporation in the

past few years introduced a new advertising campaign that emphasized saving money over lower

prices, the slogan changed to the following “Save Money Live Better,” which replaced the

previous advertising slogan “Always Low Prices” that was used for more than nineteen years.

Internal and External Relationships with the Small Merchants

The goal is to change the identify Wal-Mart’s has displayed over the years; not with just

having the lowest prices on merchandise, but also improving the connection between Wal-Mart’s

presence and conventional social capital assessments. One of the major goals of Wal-Mart was

not focused on benefiting the corporation but also benefit and add value to the countless

communities it serves (Ran & Largay, 2009). Wal-Mart must be proactive, that is Wal-Mart

executives must meet with not only with the local government and Chamber of Commerce, and

in each State. Wal-Mart must hold town meetings with the local community to discuss their

plans explain what their intentions are and how they can help each other meet each of their goals

and expectations. Failure to take the initiative places Wal-Mart on the defensive ultimately

making it difficult to develop and grow their business, this is what happened to the expansion

plans in Boulder, Colorado (Ran & Largay, 2009).

Conclusion
An evaluation of the case study “Wal-Mart the Main Street Merchant of Doom” was

conducted with an emphasis on possible detrimental effects caused to local merchants and

communities. Finally, Wal-Mart’s philanthropy was touched on emphasizing charities and

community service. The great power of corporations such as Wal-Mart are able

to externalize enormous costs onto society and hence onto the average

member of society. Wal-Mart can

increase their presence by emerging markets through more partnerships, and joint ventures. By

having partnership in a business environment


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References

Carroll, A. B. & Buchholtz, A. K. (2009). Business & society: Ethics and stakeholder

management. Mason, OH: South-Western Cengage Learning.

Jia, P. (2008). What Happens When Wal-Mart Comes to Town: An Empirical Analysis of the

Discount Retailing Industry. Econometrica, 76(6), 1263.

From Research Library. (Document ID: 1607842281).

Ran, Z., & Largay, I. (2009). Wal-Mart and Social Capital: Builder, Destroyer, or Both?

Academy of Management Perspectives, 23(2), 98-99. Retrieved from

Business Source Complete database.

Sheehy, B. (2004). Corporations and Social Cost: The Wal-Mart case Study.

Berkeley: The Berkeley Electronic Press. Retrieved December 06, 2010 from

http://heinonline.org/HOL/LandingPage?collection=journals&handle=hein.journ
s/jlac 4&div=6&id=&page=

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