"There is a creature alive today who has survived millions of years of evolution without change, without passion, and without logic. It lives to kill. A mindless eating machine, it will attack and devour anything. It is as though God created the devil and gave him jaws."
- From the preview for 'JAWS' - 1975
For many people, Wal-Mart tops the list of feared and hated corporate giants. The retailer swept across the country during the last 50 years, devouring countless main street merchants and leaving in its wake a list of corporate offenses related to unfair labor policies, poor environmental practices, and ruthless tactics against competitors and suppliers alike.
Starting with one location -- a franchised Ben Franklin variety store in Arkansas, Sam Walton and his successors built what is today the largest retailing operation in the world. There are 5,000 Wal-Mart stores (in a variety of formats) and the company has 1.9 million full time employees -- that's right, 1.9 million employees.
With revenues of just over $300 billion, Wal-Mart is one and a half times larger than its next biggest 13 competitors combined. This list includes storied retailers such as Sears as well as trend setting newcomers like Target. In fact, Wal-Mart is six times larger than Target. Today, Wal-Mart stands at number two on the FORTUNE 500 list just behind Exxon Mobil.
There is a well organized and financed activist movement against Wal-Mart. One example is the organization -- "Wake Up Wal-Mart" -- which is backed by The United Food and Commercial Workers International Union. Wake Up Wal-Mart claims over 500,000 members (union card carriers perhaps?) and has a well-designed, multi-functional website prompting you to sign up, spread the word, adopt a Wal-Mart, donate and take action. link
Or, check out Wall-Mart Watch, which is a joint project of The Center for Community & Corporate Ethics and its advocacy arm, Five Stones. The Center is devoted to studying the impact of large corporations on society. link
Wal-Mart is clearly not invincible. The effort against Wal-Mart includes economic research, academic studies, film projects and other union movements. A growing number of communities have successfully rallied and prohibited Wal-Mart from opening. The company has repeatedly failed, attempting to expand internationally. While the company has long been noted for its extremely efficient supply chain model, 70% of its products are sourced in China, creating a new level of vulnerability.
Wal-Mart is a remarkable retailing achievement. Its low prices and breadth of inventory provide a measure of consumer value without competitive parity. And as such, it has many loyal consumers and business advocates. However, to grow -- which all public companies must do -- the Wal-Mart model must adapt. The social environment companies operate in today will not allow Wal-Mart to operate like it has in the past.
Will Wal-Mart face extinction like the once feared T-Rex? Or, will the retailer be destroyed like the man-eating Great White in Jaws? I doubt it. Rather, watch for Wal-Mart to strengthen its ethical values voluntarily and integrate these into its business model. Imagine low prices, a wide selection of merchandise AND a values driven approach to people, society and the planet -- that's an unbeatable business model for Wal-Mart over the next 50 years.
1 comment:
It will be fascinating to watch to what extent their model of corporate leadership on this issue takes hold. You have to give them credit for being bold, but there is something disturbingly messianic about the way the company operates.
On a personal level, about a month ago I was summoned to Bentonville along with about 50 other publishing executives to brainstorm with Walmart on how to improve the efficiency of the magazine category in Walmart. I was impressed by their commitment to sustainability, but put off by their bullying attitude. There was no question that this was all about cutting waste (and cost) out of the system in order to improve Walmart's profitability. On the other hand, if they can show that companies can improve profits by being more green, that's the kind of model we should be looking for.
Also...There is a very good article in Fast Company on Adam Werbach, the former head of the Sierra Club who broke with traditional environmentalists to become a consultant to Walmart. It's a fascinating story and a great read. Here's the link:
http://www.fastcompany.com/magazine/118/working-with-the-enemy.html
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