One nation under Wal-Mart - Case Study Example

 One nation under Wal-Mart 1. Is Wal-Mart’s rapid rise to retail dominance a positive or a negative development for our society? What does it tell us about capitalism, globalization, and the plight of workers? As a retailer, Wal-Mart can be characterized as quite successful. As noted in the case study, currently, the stores of Wal-Mart are estimated to, at least, 4,750, a figure that it is quite high if taking into consideration the level of growth of other retailers globally. The rapid and impressive expansion of Wal-Mart has resulted to strong conflicts, in regard to the role of the firm for the society. For many people, Wal-Mart has helped towards the increase of equality in society; people of different financial status have the potential to visit one of the firm’s stores and buy products of various prices. In other words, Wal-Mart eliminates barriers related to buying, as a critical human experience; such barriers are common in societies of non-developed countries which are characterized by extreme gaps between rich and poor. This means that Wal-Mart helps towards the reduction of social inequality, a fact that promotes peace at all levels of social and private life. At the same time, the stores of Wal-Mart are structures in such way so that they can offer to customers the chance to make their choice among products of different quality/ characteristics. In this way, customers are given the freedom to develop their decision making skills. The above positive influence of Wal-Mart in regard to a person’s social and private life is highly appreciated by consumers; as noted in the case study ‘about 138 million shoppers visit the firm’s stores every week’ (case study, 1st page, 1st par.). On the other hand, Wal-Mart helps people to develop their social life, giving them the chance to buy presents for people in their social environment. As a result, Wal-Mart, contributes in the strengthening of social bonds and the enhancement of social values, as critical parts of social life. There are, of course, those who do not accept the positive role of Wal-Mart for our society. These people tend to relate Wal-Mart with capitalism and globalization, claiming that through Wal-Mart, as also through other retailers of similar size, the above two concepts, i.e. capitalism and globalization are promoted. Such view could not be accepted for the following reasons: a) Wal-Mart cannot be blamed for the changes in the life of style, including the development of new modes of retailing, similar to that promoting by Wal-Mart. Large retailers exist in all developed countries, being part of daily social life; b) Capitalism and globalization, as concepts, are not related solely to retail; they rather reflect a radical change on traditional views of life and priorities. In fact, retail is just an aspect of capitalism and globalization; existing political systems worldwide are the key supporters of these concepts. According to the above, it would be not fair to claim that Wal-Mart has promoted capitalism and globalization. Still, the success of Wal-Mart proves that people worldwide tend to support capitalism and globalization, at the level that products of well known brands, that are popular worldwide, are highly preferred by consumers. As a result, workers have become willing to spend on products that meet the standards of fashion, even if these products are going to cover the workers’ primary needs. In any case, these trends cannot be considered as based on Wal-Mart’s strategies. Rather, Wal-Mart has aligned its objectives with the principles of capitalism and globalization which are, in any case, indispensable part of modern life. 2. Can a retailer ever become too large and too powerful? In the context of modern market, a firm can increase its size and its power by following specific rules. For the retail industry a similar rule exists. Primarily, emphasis needs to be given to consumers’ preferences, as influenced by local ethics and culture. At the next level, it is necessary for the firm to identify brands that are popular worldwide. In Wal-Mart such strategy has been followed. As noted in the case study, Wal-Mart has a key role in the promotion of products of quite popular brands, such as ‘Revlon and Del Monte’ (case study, 1st page, 2nd par.). Keeping production costs low is also vital for a firm that wants to emphasize on its expansion. According to the case study, Wal-Mart has the control of a ‘high percentage, about 10%, of ‘goods imported by China’ (case study, 1st page, 2nd par.). Most important, a firm that needs to achieve a significant growth has to offer to its customers bargains, meaning products at lower prices compared to competitors. Keeping prices low is a key strategy of Wal-Mart (case study, 1st page, 3rd par.); through this strategy the firm has managed to develop an extended customer base which is continuously increased, at the level that new customers, looking for bargains, are attracted to the firm’s products. In the case of Wal-Mart reference should be also made to the following fact: a firm operating in the retail industry can become quite powerful and large if it can align its strategies with local culture. This means that all the firm’s strategies should respect the cultural characteristics of the country where the firm operates. The establishment of a strong relationship with a country’s culture can also be an advantage for organizations in different industries. Wal-Mart has been related to the culture of US; as a result, the firm may face fewer barriers, than its competitors, in entering new markets. Because of the issues discussed above, the development of Wal-Mart as a global retailer can be characterized as rather expected. In addition, Wal-Mart has proved that a retailer can become too large and too powerful without the interests of its stakeholders to be harmed. In the case study reference is made to certain practices of Wal-Mart, as en employer: the low wages and the unpaid overtime work of employees (case study, 1st page, 6th par. & 2nd page, 1st par.). It is explained that these practices of Wal-Mart have negatively affected the rights of employees in the retail industry across USA, forcing employees to accept lower wages and unpaid overtime work (case study, 1st page, 6th par.). These claims are not fully justified. In fact, global firms, like Wal-Mart cannot survive without keeping their costs low. The expansion of these firms has contributed in the significant increase of job positions worldwide. In USA a similar phenomenon appears. Managers in Wal-Mart have kept wages low trying to secure the survival of the firm in the context of global crisis; moreover, the stores of Wal-Mart across the country offer job to thousands of people who would not have the chance to enter the job market if firms like Wal-Mart would not exist. Indeed, during periods of strong financial crisis it is very difficult for small firms to survive. Large organizations are better prepared to face such challenges, a fact that makes them more attractive to candidates aiming to secure a job position that would last for long. 3. Is opposition to Wal-Mart's expansion a legitimate part of the political process or is it unfair interference with our market system and a violation of the company's rights? Do opponents of Wal-Mart have any valid concerns? According to the case study, a potential expansion of Wal-Mart would further harm the rights of employees across the country, since the firm’s operations are related to non-ethical practices such as keeping wages too low and refusing to pay overtime work to employees (case study, 2nd page, 1st par.). The opposition to Wal-Mart cannot be considered as a legitimate part of the political process for the following reason: the current political system of US, as also of other developed countries worldwide, is mainly based on the freedom of trade and commerce. In this context, the interference of the state in the firm’s expansion would not be aligned with the country’s economic and political culture. At this point, the following claim could appear: the country has interfered in the strategic choices of Wal-Mart aiming to secure the health care protection of the firm’s employees. The support provided by the state to the firm’s employees is welcomed but the following issue needs to be highlighted: the introduction of plans supporting the rights of employees across US should be related to employees in all industries, not just in the retail industry. Emphasizing on the problems related solely to workers in Wal-Mart leads people to consider this initiative as politics-based and not so much as society-based. Indeed, even if employees in Wal-Mart are many they should be treated like employees in other sectors. In this context, the ‘Fair Share Health Care Fund bill’ (case study, 3rd page, 5th par.) can be characterized as a valuable piece of legislation at the level that it addresses the activities of all firms meeting specific criteria, i.e. it is not related solely to Wal-Mart. Moreover, the emphasis by local communities on the activities of Wal-Mart can lead to skepticism in regard to the actual motives of this practice. According to the case study, there are firms of similar size with Wal-Mart; for example, in Maryland, three other firms employ more than 10,000 employees as Wal-Mart does’ (case study, 3rd page, 5th par.). Still, it is Wal-Mart that attracts the oppositions of local communities; the potential existence of conflicting interests in local markets would be a reason for this phenomenon. In general, the opponents of Wal-Mart have valid concerns in regard to the respect of their rights; still, the firm seems willing to discuss on the introduction of plans for securing the interests of its employees. Of course, under current market conditions, the pressures against the organization are many. Without securing its market position the firm would not be able to support its employees. For this reason, the concerns of Wal-Mart’s opponents are valid but it would be rather impossible for these concerns to be fully addressed. Unless the economy of US, as affected by the global market, would show signs of recovery, no measures would be taken by the organization for increasing the existing benefits of its employees. Such decision would possibly lead to the need for decreasing the firm’s existing workforce, a perspective that would clearly harm the employees’ interests more than the non-payment of overtime work. Works Cited Wal-Mart, case study Read More