They have been touted to put out quality products at lowest prices daily. Not only providing quality of products, Wall-Mart has also proven to take accountability for its communities, as well as its employees, shareholders and vendors. As for corporate citizenship, they have received many awards from various organizations for supporting its local activities.
From the recent findings grading corporate reputation, more and more corporations are beginning to find it as a prominent importance in sustaining their profitability for a long period of time. After a comprehensive 2003 survey gathered from local community leaders, suppliers, and employees, they have realized that consumers have some mistrust the company’s labor practices and its impact on the community, despite its efforts.
Survey has revealed that Wall-Mart has been the target among many groups such as organized labors, feminists, HRS activists, environmentalists, local businesses and other anti-sprawl activists. All of these ropes have been negatively impacting the company. There are reasons why Wall-Mart gets the blame. Compared to Wall-Mart employees, union workers in the retail industry get paid 25 percent more after 2 years on the job. National Labor Relations Board has ruled that Wall-Mart broke the law by firing union supports and interrogating workers.
Wall-Mart is known to have a lot of diversity in employment, but internal audit found more than 1300 instances of minors working during school hours and forcing workers to work without scheduled breaks. There were more than 40 litigation regarding discrimination on gender quality, such unequal pay, preferential treatment and promotion. As for the environmental side, Wall-Mart gets to be on the top of the list for environmental threat, which includes air quality standards on traffic, mismanagement on sewage, and many more.
To drive the cost of the products down, most of the Wall-Mart’s products are from overseas. The media however, negatively portrayed Wall-Mart due to unethical business practices and working conditions in China. Wall-Mart has proven great market share in its market environment, but not so well in its marketed environment, which consists of the social, political, and gal environment among companies and afflicted public. Due to these negative influences, the company had tarnished its corporate reputation, affecting their long term profitability.
As a response, the company has initiated more effort in developing external communications programs to provide an outlet to the public showing company’s philanthropic work as well as career opportunities. To mitigate the issues even further, they have launched advertisement campaign regarding employment. To improve employee representation, they forms a diversity office, recruiting and promoting various segments. More and more spokespersons and executives are more engages in the media, mending every holes regarding Wall-Mart’s reputation and operations.
In agreement to let their old store to lease it to small businesses in town, they get to run any businesses as long as it is not used as a pharmacy, discount store, or warehouse club. Wall- mart’s also changed its litigation policy so that it makes a point of appearing reasonable, appealing to fewer cases, and publicizing disputes it has resolved. The purpose of this change is to reduce further conflict with the public. Wall-Mart case questions . The issues that Wall-Mart is faced with deals with marketed factors, such as employee satisfaction, community risks, as well as its suppliers (vendors).
Wall- Mart should have known these issues will occur, despite the great philanthropic work they have been done. They are constantly faced with litigation regarding company’s business practices, so Wall-Mart were aware of these issues early on. 2. There are many industrial groups that are negatively impacting Wall-Mart’s reputation, such as feminist group, unionized workers, environmentalists, local community leaders to name a few. These factions are tainting the company’s image, impacting their sustainable long term profitability. 3.
Areas that Wall- Mart needs to be solves are in groceries, banking, unionization, health care, environment, health-care benefits, wages, discrimination, store openings, and employment practices in domestic as well as overseas. The government needs detailed cooperation with the company to provide either monetary support or legal approval to fix each of these issues. 4. Wall-Mart has adopted many approaches to fill in the gaps, but it was both failure and success. The philanthropic work they have practiced created some merits in the community but still many people have negative stereotypes of the company’s practices.
And even if the resolutions are resolved, that will be in direct conflict with Wall-Mart’s core strategy, which is to offer low cost products backed by efficiency. To make this offer a reality, they had long put effort to deny any union workers and its activities. This issue is a catch-22 situation for Wall-Mart, and they really need to reconsider its tradeoffs before they make any amendments. 5. I believe Wall-Mart would stick with its core strategy, which is to offer low cost of their products every day.
In order for this to work, they cannot afford to have union workers, since this will reduce profit margins. Union workers can later use strike and walk- outs which will further provide negative impacts. 6. Think Wall-Mart should allow independent auditors to inspect suppliers’ factories, since this will further gain positive acknowledgement and trust from the public for making their operations transparent. 7. Wall-Mart should select employees based on their health care sots because this directly correlates to their business profitability and incurring costs.
And believe almost all Wall-Mart employees should be somewhat physically active in their work, because there are many work related health problems occurring in the office due to inactivity. 8. Wall-Mart should rethink their strategy so that it is taking initiatives to solve some of the environmental issues. As of moment, the company is facing fines for many of the charges, but think Wall-Mart should think further to reduce the core problems within their processes (such as packaging products smaller to reduce waste). Wall-Mart Bill stated that it required all employers in the state with 10,000 or more employees to spend at least 8 percent of their sales on medical benefits for their employees or pay the difference into the state’s health insurance program. Wall-Mart should not change its distribution center, even though Wall-Mart will incur some of the cost, because I believe this will satisfy many of the employees (due to medical benefits) who are working in Maryland. 10. The application of industrial bank into the Wall-Mart stores will benefit the company but believe the opportunity sots is huge on this one.
There are many coalitions and petitions that are against for this application, so Wall-mart should just back away from this business (since this isn’t even their core operations anyway). 11. I believe Wall-Mart has grown substantially to support their core vision, which is to serve low cost quality products. Supporting and helping to please all the groups will eventually lose Wall-Mart’s competitive advantage. There are many tradeoffs that needs to be made, and changing their strategy to fix these problems can cause internal problems in the Wall-Mart’s structure.