The consequences of stakeholder management or lack of

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Unformatted text preview: ey stakeholders’ reactions to the entry of WalMart into South Africa were predominantly negative. Stakeholders such as the Tribunal, who had formal power, were engaged through the formal proceedings and some concessions regarding stakeholder demands were made through these proceedings, although they were not deemed adequate by the stakeholders making the demands. The consequences of stakeholder management, or lack of it, was an entry marked by acrimonious litigation and public spats with key stakeholders. The results are discussed and analysed in the next chapter. 68 CHAPTER 6: ANALYSIS OF THE RESULTS 6.1 Introduction The research was concerned with management of stakeholders by Wal-Mart when it entered South Africa. The results were presented in the form of themes emerging from the documents and thereafter tabled in accordance with the research questions. This chapter will analyse the results under each research question and the findings will be discussed in the context of existing literature. 6.2 Who were the main stakeholders during Wal-Mart’s entry into South Africa? Trade unions and the government were found to be the key stakeholders. In South Africa trade unions possess all three attributes of Uusitalo and Rokman’s (2004) stakeholder model - power, legitimacy and urgency - making them definitive stakeholders. This is slightly different from Uusitalo and Rokman’s (2004) research in Finland, which found employees to be a discretionary stakeholder, whose only attribute was legitimacy. Part of the difference is explained by the fact that Uusitalo and Rokman’s (2004) analysis involved employees who were not unionised, and they themselves acknowledged that in Nordic countries the involvement of trade unions would strengthen the position of workers. It must also be noted that in South Africa the unions do not necessarily possess formal power, but rather it is derived from their strength and the networks of relationships between different stakeholders. For example, the unions can exhibit power in South Africa when they raise issues that are in the interest of the country or when dealing with ministers who are themselves former trade 69 union leaders. COSATU is also in alliance and some influence in the governing party in South Africa. That market entry requires consideration of a broad range of stakeholders, including government and trade unions, is widely recognised (Elg et al, 2007). Government plays an even more critical role in the entry of retailers in emerging markets. While emerging markets are characterised by high growth, they also characterised by institutional voids and immature supplier industries. The government often steps in to ensure that the entry of large retailers into emerging markets does not lead to the elimination of its local supplier industries and jobs. The concerns that Wal-Mart, given its global reach, size and global sourcing capabilities, could lead to a shift away from local suppliers to imports is a reasonable expectation, or assumption. Given the estimated unemployment rate of about 35% in South Africa, jobs are a national priority and on top of the government’s agenda. Agriculture and agri-business have been identified as one of the job drivers in the Government’s Economic Growth Path. In addition, the Department of Agriculture, Forestry and Fisheries has a mandate to ensure food security in South Africa. In view of the above, the government’s interest on the matter and its emergence as a key stakeholder was not surprising. The government is a highly salient stakeholder as it has both power and legitimacy; although in this case less urgency than would have been the case if Wal-Mart had been able to enter without their approval. Trade unions’ emergence as a stakeholder is largely linked to Wal-Mart’s reputation of not allowing unionisation in countries such as the United States and Canada. There are very vocal anti-Wal-Mart groups where it operates or intends to enter, and criticism is levelled that Wal-Mart’s presence leads to the lowering of wages for workers and a reduction in employment as well as the displacement of local suppliers. While these arguments are countered by Wal-Mart, its sympathisers and some academics, the anti70 Wal-Mart coalitions project an image of an uncaring corporate citizen that does not care for its stakeholders. It was thus not surprising to see the unions in South Africa adopting the stance they did. What was striking about Wal-Mart’s entry into South Africa was that at a time of wideranging discourse about the entry, certain stakeholders were notably silent or offered limited contribution to the debate. Amongst these were the consumer groups, suppliers and business associations. One could expect consumers, especially, to have an opinion on the merger. While the competition authorities would, in their analysis of the issue, have considered consumer welfare, they can, in no way, substitute for the role of consumer groups. In some instances trade unions purported to speak on behalf of c...
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This document was uploaded on 01/24/2014.

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