Standards, values, morals and ethics have become increasingly complex in a postmodern society where absolutes have given way to tolerance and ambiguity. This particularly affects managers in Human Resources, where decisions will affect people’s jobs and their future employment. This paper will look at the history of Wal-Mart and it will glance at the management style and Ethics of Wal-Mart towards it internal and external customers.
Wal-Mart Ethical and Management Style
Wal-Mart is not only the largest retail company but it is the largest company in the world. It is bigger than Home Depot, Target, Costco, Kroger, Sears and Kmart combined. The only competitor that might be considered to be Wal-Mart biggest and closest rival is Target, but it is still small in comparison. Wal-Mart succeeded over their rivals due mainly to Walton’s focus on the ignored small-town market, an innovative distribution and inventory control system that allowed the company profitably to undersell rivals, and Walton’s ability to build a strong feeling of community among workers and customers (Vance and Scott, 1994). Wal-Mart Stores operates retail stores in various formats across the world. In the U.S. the retail formats operated by Wal-Mart include discount stores, supercenters, neighborhood markets, marketside, and Sam’s clubs. Internationally, the company operates in Argentina, Brazil, Canada, Chile, China, Costa Rica, El Salvador, Guatemala, Honduras, India, Japan, Mexico, Nicaragua, Puerto Rico and the UK. (www.datamonitor.com, 2011). Wal-Mart is more than just another large company, in 2011 their total revenues was $419 billion and they employed over 2.2 million workers in the United States at about 3,600 stores and more than 550 employees at Sam’s Club (Neumark et al, 2005). Wal-Mart’s success has drawn both imitators and critics. Wal-Mart has been accused of putting thousands of local stores out of business, driving down wages and forcing its workers to turn to the government to pay for their health care. Wal-Mart, a chain of discount stores was founded by Sam Walton in 1962. Prior to Walton opening Wal-Mart he refined his managerial and marketing skill as the owner of a growing number of small variety stores. Walton traveled the country studying everything he could about discount retailing. Walton became convinced that American consumers wanted a new type of store. Trusting his vision Walton and his wife put up 95 percent of their money to purchase the first Wal-Mart store in Rogers, Arkansas. Walton realized that most retailers were looking for a deal from suppliers and would leave their store prices unchanged and pocket the extra money. Walton realized he could earn his profit through volume and pass on the savings to his customers. This insight would form a cornerstone of Walton’s business strategy when he launched Wal-Mart in 1962 (Frank, 2006). After the death of Walton in 1992, Wal-Mart experienced several months of negative publicity. Wal-Mart experienced a clear lack of direction while the company was going through a transition, which resulted in poor performance. These results for the company was short lived, by the end of the year Wal-Mart had rebounded. Sales and profits continued to climb thru the 21st century with no sign of any adverse affect from the weakening global economy, but employee moral continued to decrease. Employees
Sam Walton’s was a good man who cared very much about his customers and employees. Walton understood that a major requirement for keeping costs down was by controlling the payroll. Walton preferred to hire as few people as possible, but he also dreaded paying them more than he had to (Frank, 2006). Unions were particularly feared, and Walton did everything he could to fight them, almost always successful. Walton understood the long-term benefit of convincing employees and customers that the company has a conscience as well as calculator. He introduced a profit-sharing...
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