Case 1 - Case 1: Wal-Mart: The Main Street Merchant of Doom...

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Case 1: Wal-Mart: The Main Street Merchant of Doom 1. What are the major issues in the case? Assess Wal-Mart’s corporate social responsibility using the four-part CSR model. Is Wal-Mart socially responsible while it has 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 of the communities in which it enters? Wal-Mart has been criticized for the aggressive and even predatory tactics that it takes with respect to local merchants. Competition is what drives Wal-Mart, and a merchant who competes directly with them will lose. Is it unethical for any company, not just Wal- Mart, to drive out any and all competition? Is Wal-Mart using its size and ability to undersell small local merchants until they are driven out to establish an unfair monopoly on local markets? Is this a violation of the spirit of anti-monopoly laws? The following is an assessment of Wal-Mart’s corporate social responsibility using the four-part CSR model: Economic: Wal-Mart’s economic performance has been outstanding. According to the text, Wal-Mart was the largest retailer in the world with over $345 billion in sales in 2007. Its goal of providing quality merchandise at low cost to consumers meets the requirement of society regarding Wal-Mart. Legal: Wal-Mart’s adherence to the laws of the country generally has been good, but an explosion of recent lawsuits by employees and other stakeholders is tarnishing the company’s image in this area. According to Wal-Mart’s annual report for the year ended January 31, 2007, the company is a defendant in “numerous cases containing class-action allegations.” The company notes that if these cases are “decided adversely to [the company] or settled by [the company],” it could result in a material liability to the company and adversely impact the company’s “operations, financial condition and liquidity.” In February 2007, the Ninth Circuit Court of Appeals upheld the class-action status in Dukes v. Wal-Mart Stores, Inc., a class-action lawsuit “brought on behalf of all past and present female employees in all of our retail stores and wholesale clubs in the United States.” The certified class includes approximately 1.6 million individuals. Ethical: Wal-Mart’s internal policies have certainly been above the spirit of the law. Questions may be raised, however, about (1) the degree to which it has considered its impact on other small stores and merchants and to town culture, and (2) certain employment-related practices which have resulted in mammoth lawsuits for the company. Discretionary:
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Case 1 - Case 1: Wal-Mart: The Main Street Merchant of Doom...

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