Reflection Paper # 1 – Is Wal-Mart Good for America?
Brandon A. Grossberg
University of Redlands School of Business
“The secret of successful retailing is to give your customers what they want. And really, if you think about it from your point of view as a customer, you want everything: a wide assortment of good-quality merchandise; the lowest possible prices; guaranteed satisfaction with what you buy; friendly knowledgeable service; convenient hours; free parking; a pleasant shopping experience.”(Walton) This direct quote from Wal-Mart founder Sam Walton, was placed at the top of their website to inform its consumers of their general management philosophy. It is meant to instill a feeling of comfort that such an enormous multinational retailer still manages to hold on to its small town founder’s values. Provide people with the lowest possible prices on items that they need, whatever the cost. This slogan of always providing the lowest prices has made Wal-Mart the largest retailer on the planet and they generate billions of dollars in profit annually. But is Wal-Mart good for America? On the surface it would seem that providing a customer with an item at the lowest possible price is a good thing. However, to get a more comprehensive answer to the prevailing question, one must more closely examine the mechanisms by which Wal-Mart is able to provide merchandise at such bargain basement prices. Providing people the lowest possible prices, whatever the cost. In this case, these low prices are being provided at the cost of the environment, Wal-Mart vendors, Wal-Mart employees, and even the American taxpayer. As the “Wal-Martization” of America is forcing businesses to outsource their jobs oversees just to stay solvent, it creates a problem here back home of people not being able to pay their bills and maintain adequate living standards. Is Wal-Mart creating the greatest good for the greatest number? Or are they just creating the greatest good for their executives and investors? This reflection paper will attempt to analyze and answer these questions as we dive deep into the culture of Wal-Mart and its effect on society domestically, as well as globally. The two dominant points of view used to analyze corporations and their overall purpose could be summarized by the terms “stockholder” and “stakeholder” management. The former was championed by the well-known economist Milton Friedman. He believed that “a corporation’s primary and perhaps sole purpose is to maximize profits for stockholders…” (Arnold, Beauchamp & Bowie, 2013) Friedman would view Wal-Mart as a corporation that acts solely in the best interest of their stockholders. Wal-Mart is notorious for not paying their employees very high wages and not offering much to their employees in terms of retirement benefits and health care coverage. At least when compared to other successful competitors such as Costco, Wal-Mart clearly comes up short in this department. The latter point of view mentioned was made popular by Edward Freeman in his essay, “Managing for Stakeholders.” In it he argues that “the primary responsibility of the executive is to create as much value for stakeholders as possible, and that no stakeholder interest is viable in isolation of the other stakeholders.” (Freeman, 2007) When we speak of stakeholders, we are referring to the five basic groups that stand to gain or lose from corporations. These groups are customers, suppliers, employees, the local community and the stockholders. Freeman argues that no one stakeholder’s interest should be taken at the expense of the others and that all must be considered by a corporation when it comes to making the best decision. While the “Friedmanite” view has been seen as the classical dominant view on corporations and their purpose, the stakeholder view on management has been gaining speed over the last thirty years and cannot be...
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