WMcasestudy - Introduction Starting off with Sam Waltons...

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Introduction Starting off with Sam Walton’s idea of low prices in the 1940s, Wal-Mart has since then become the world’s largest public corporation, topping the list of Fortune’s Global 500 for the sixth time in seven years. 1 With headquarters in Bentonville, Arkansas, this retail giant has over 2 million employees worldwide, with 1.4 million within the United States alone, making it one of the largest private employers in the nation. 2 (For Corporate Fact Sheet see Appendix A). As with any global corporation, Wal-Mart engages in multiple and complex relationships with a number of different stakeholders. Labor unions, environmentalist groups, grassroots organizations, religious groups and community members have criticized Wal-Mart for its perceived lack of concern in its current business practices and policies. Complaints have included unequal employment opportunities to lack of health insurance leading to lawsuits, which were close to 5,000 in 2000. 3 The opposition came to a head in 2005, as two advocacy groups specifically targeting Wal-Mart were formed in spring 2005 to unite disgruntled community members: Wake-Up Wal-Mart, a union group backed by the United Food and Commercial Workers, and Wal-Mart Watch, a joint project of the Center for Community and Corporate Ethics. The mission of both groups was to cause the corporation to improve its practices for its employees, its customers, and the surrounding communities in a more ethical and acceptable way. A documentary directed by Robert Greenwald, Wal-Mart: The High Cost of Low Price , was released on November 4, 2005, which was highly critical. Through a series of interviews and video footage interspersed with statistics, Greenwald attempted to depict the unethical business practices Wal-Mart implemented on a daily basis and the negative 4 effects these practices had on employees and small business owners. A study on the impact of Wal-Mart supercenters in rural communities found that small towns can lose up to 47 percent of their retail trade as soon as 10 years after the establishment of a Wal- Mart. 4 Wal-Mart soon found itself witnessing the repercussions of this negative coverage. By November 2006, Wal-Mart’s stock was down 30 percent since 2000, and its sales growth slowed to 1.5 percent in the third quarter, compared to the 4.6 percent
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growth of competitor Target. 5 (See Appendix B) A confidential report for Wal-Mart by percent of consumers no longer wanted to shop at the store due to the negative press they have encountered. 6 The growing opposition to Wal-Mart was quickly becoming detrimental to the growth of the company, not only externally, but internally as well. It was imperative that Wal-Mart take matters into its own hands and handled these issues through effective communication and strategic organization, as its very reputation and image depended on it. This particular case study details exactly how Wal-Mart used an
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This note was uploaded on 09/30/2011 for the course BUS 682 taught by Professor Staff during the Spring '11 term at S.F. State.

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WMcasestudy - Introduction Starting off with Sam Waltons...

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