Business Continuity Plan: Wal-Mart - Case Study Example

Business Continuity Plan One of the most important aspects of any business is its relationship with all the other major factors affecting its operations. That is to say that the environment within which the business operates becomes an important factor that may greatly determine the extent to which a business is successful .For the sake of regulation and working with given standards, all companies have regulations that guide them and that must be followed. These regulations may be looked into as developed into those that are affect it within and those that are developed by other bodies with interests to the kind of business including the government. Working within this framework is essential for any institution and organizations since it ensures legality and legitimacy of the activities being done. It is in this context therefore that this paper seeks to look into how some of these set out standards may influence business success and some of the measures that can be put in place in support of the business.In doing so, Wal-Mart, an American Multinational for its widespread nature. Company Background Fortune Global (2012) named Wal-Mart as the third largest public corporation globally. Some of the factors considered while making this preview is that the company is the world’s biggest private employer with over two million workers. It has also been rated as the world’s largest retailer. The company is largely a family-owned business, given that the Walton family, poses a 48 percent stake. Fortune Global further named the company as the world's most valuable company. The company is the brainchild of Sam Walton, a businessman from Arkansas. His career in the retail business began in the 1940s when he worked at a J. C. Penney store in Des Moines, Iowa. Later on he joined a regional retailer named the Butler Brothers, who ran a chain of variety stores .It is here that he was offered to run one of the branches in Newport, Arkansas where he recorded quite a great deal of success. Shortly after he opened an outlet in Bentonville, Arkansas that went by the name Walton's Five and Dime where he again achieved a remarkable sales volume, recording much higher than most competitors. In a span of five years, the company had opened close 24 branches across Arkansas (Mitchell, 2012). This may be said to have been the turning point of the company and the beginning of achieving a turning point as it his since then been expanding to reach its global status in the modern day. The company was incorporated 1962, the year that it also opened the first Wal-Mart Discount City store. It began trading publicly on the New York Stock Exchange in 1972. Perhaps the company’s success can also be seen in its retail of groceries as it is said to be the United States largest grocery retailer (Ghemawat, Ken 2006). For instance, in 2009, the company generated 51 percent of its US$258 billion sales in the U.S. from grocery sales. With a range of 8,500 stores in 15 countries operating under 55 different names, there is no doubt that its operations can hardly escape the public eye and the general scrutiny of interested parties. Inevitably, the company has attracted acclaim and criticism almost in equal measure from various parties in equal measure over the years .In the light of this, it thus becomes a great case studies in looking at the different political and socio-economic factors that have been associated with the organization. One of the notable initiatives that the company has had is the development of a program that aims at looking into environmental care. In 2005 and 2006 the company announced its short term and long term goals in contributing to environmental care where close to $500 million a year could be used. Under this initiative , the company would work towards increasing its truck fleer fuel efficiency by 25 percent, innovate ways of reducing greenhouse gas emissions by 20 percent as reducing energy consumption at stores by 30 percent. Further mechanisms of reducing solid waste its stores were put in place and the management was optimistic that the company could be a a good steward for the environment especially by adopting the use only renewable energy sources and producing close to zero waste. Through this environmental care initiatives, the company designed three new stores on experimental bases that had wind turbines, photovoltaic solar panels, biofuel-capable boilers, water-cooled refrigerators, and xeriscape gardens. These stores are in McKinney, Texas, Aurora, Colorado, and Las Vegas, Nevada. Another notable step, though not greatly highlighted by critics, was the decision to increase its portfolio of merchandise to include organic milk thereby becoming the biggest retailer of organic milk. It is also cited as the single most biggest buyer of organic cotton in the world and has so far undertaken initiatives to reduce packaging and energy costs. Wal-Mart’s environmental care initiative has been successfully enhanced by the services of consultants who have helped to improve its overall performance in this area. It has been discovered for instances that by coming up with ways of reducing excess packaging on their toy line Kid Connection, they may be able to save $2.4 million a year in shipping costs and by extension also save 3,800 trees and several millions of barrels of oil( Zook,Graham 2006). Great acclaim has been given to its move that has seen the company come up with its own electric company in Texas, Texas Retail Energy through which it is expects to supply its stores with cheap power. Employee and Labor Relations Over a long period of time, the company has closely been highlighted by various interest groups for alleged violation of labour laws and disregard of collective bargaining agreements. one of the issues that has been largely highlighted is the issue of wages where the company critics argue that on average, most Wal-Mart employees earn far much less per hour compared to their counterparts in other stores. One of the areas in which the company has been greatly criticized on is the alleged unwillingness of its workers to join their organizations which is said to be influenced by thee company's anti-union stance. Further, the company has received disapproval for its extensive sourcing of foreign products. In one way or the other the criticism waged against Wal-Mart has been cemented by its opposition of the Employee Free Choice Act (EFCA), through which workers can easily unionize having removed employer's ability to demand a secret ballot in union elections. The Act also requires mandatory arbitration of labor disputes thus giving employees an opportunity to be heard as opposed to settling labor related disputes without arbitration. The whole issue surrounding this Act has brought about a sense of political inclination into the company’s affair. This can be seen for instance, in mid-2008 while the United States was at the height of political activity, senior managers and department heads at the company attended meetings where there was expression of dissatisfaction with the Employee Free Choice Act (EFCA).By and large , these meetings were used to foster criticism against Democratic candidates who were running in the elections specifically for the United States Senate and the House of Representatives and by extension the Democratic Presidential nominee, Barrack Obama.It is said that the managers feared that a win by the Democrats would automatically result in passage of the EFCA thus bringing forth more unionization. In as much as this may not be seen as a active or direct participation in political activity, the ability of the outcome of such opinions to influence voter decision can not be undermined. In this regard, Wal-Mart’s expression of dissatisfaction with EFCA ,which was effectively passed across to stakeholders was and still is a matter of concern. From one perspective, it may appear as a matter of little concern but one must look at its ability to affect a large number of people who may in turn influence an election out come. This particular incidence has led to calls for investigations by Several labor-rights groups including who have sought the indulgence of the Federal Election Commission to find out whether Wal-Mart broke federal election rules by advocating against Democratic candidate Barack Obama in meetings with employees. It is important also to note that in recent times (Barbaro,2006), Previously, there had been a poll that indicated that after in the elections of 2004, about 76 percent of voters who shopped at Wal-Mart once a week voted for George W. Bush, while only 23 percent supported senator John Kerry .Arguably, Wal-Mart shoppers have been cited as some of the most conservative as far as political voting is concerned. Company Leadership A fifteen member Board of Directors oversees the operations of the company. The Board is elected annually by shareholders. Several influential people including Hillary Clinton and Tom Coughlin have sat at the Board at different times. Given the influence of the Walton family in the company and their greater share holding capacity, quite a number of family members sit at he board. The board tries to dissociate the company form major political influence though the magnitude of the company and the command it hs in the overall US market places it conspicuously I the eyes of media and the federal government. Risk Assessment As has been already established, the company is in the retail business and therefore most of its operations directly interact with consumers of various products. As a general retailer, the company is almost unlimited as to the customer base and probably it would be right to say that a good percentage of the population in the various markets where the company operates have an association with it. In this consideration, it is important that the company gives a closer and detailed attention to almost all of its activities. As a public trading company listed in a major stock market, the company is subject to public scrutiny and must therefore put in place measures that ensures there is the minimum risk possible(Fried,2001) One of the most sensitive areas that the company must give key consideration is its labour relations. In several instances, the company ahs come under sharp criticisms for its alleged disregard of employees rights n relation to working conditions and wages. On its part, the company has argued that its employees do not comprise some of the worst compensated or under recognized in the market. However, this may not be taken as an argument supportive enough to wade away the public scrutiny that has seen several campaign being raised against the organization. It would be important to put in place measures to ensure that the organization does not receive a bad public image and in case of an extreme situation it is corrected accordingly. In recent years the company has been faced with campaigns that condemn its labor polices. In the public eye, these are situations that need to be looked into in consideration of the fact their repetitive occurrence would give the company a poor image thus affecting their overall business. We can for instance, examine some of the incidents that have seen the company come in somehow bad faith. In 2005, activists launched two campaigns with an aim of compelling the company to instill some important polices especially in regard to its treatment of its employees. These groups have suggested that the company pays a relatively lower wage to its workforce. These groups have further claimed that workers at Walr-Mar are generally exposed to poor working conditions and the management seem to do very little about .By all standards, these claims are a risk factor that must cannot be looked down upon. In as much as the company may have several arguments that trying to demonstrate that it indeed works within the provided laws, it must be understood that activist groups work in such a way that their activities are highly publicized and just like the company itself, they may claim to operate within the a certain legal framework. From a certain perspective, one may argue that the organization is perhaps far much larger that any activist group and thus may not be easily brought down. However, it must be understood that a continued highlight of the company in bad taste especially on the same issue may spell doom for the organization. It must also be understood that still in matters regarding employment, the company has been alleged to have conditions that do not favour women and minority groups. In 2007, the company was taken to court (Dukes v. Wal-Mart Stores, Inc.,) in a lawsuit that unsuccessfully failed to show how the company discriminated against women especially in promotions. Although the case was ruled in favour of Wal-Mart, it can be highlighted that there is a great danger when and if an organization is faced with lawsuits from time to time as this may prove to be a very expensive affair. Besides, it is time consuming. By and large, it may can be seen that Wal-Mart’s main challenge is inclined towards labour relations. In this regard, the company may implement a business continuity plan that aims at winning public confidence and convince interest groups that the situation is not as has been displayed in various forums. Further, it would be important to come up with a system that sets out to improve on the various aspects that on which the company’s performance has been questioned (Mit Business Continuity Plan, 1995). In consideration of the increased calls by governments and individual groups to conserve the environment, the company must also give great consideration to this aspect and implement its environment policies as outline. It has been highlighted in this paper that the company as put in place mechanisms and ways through which but is plans to contribute to the conservation of the environment. In recent time, organizations have come under sharp criticism for their failure to keep their promises and even for their disregard of environmental policies(Jemler,2001) In view of this argument, it may be said that an organization that does not give consideration to matters regarding environmental conservation is doing so at its own peril. Individuals as well as organizations have become vibrant and matters regarding the environment are highlighted at any possible forum. This aspect is thus highlighted as risk factor for Wal-Mart given that in the range of its operations and the waste that is eventually generated from its activities. It would be important that the company develops a plan that puts in place long short and long term plans highlighting the measures it intends to undertake in order to achieve its objectives in environmental conservation. Risk Recovery Timeframe Having highlighted some of the risks that the company faces in its operations it would be important to come up with a tentative frame work that may help to tackle these challenges. Risk Factor Counter mechanism Timeframe Employee / Labour relations -Constantly review employees’ wages -Keep in touch with emerging market issues Such as new labour laws and market demands -Have a vibrant human resource management department that is able to keep up with the market demands. Continuous activity Environment Factors Develop Long term and short term goals 1 -2 years Develop environment care polices. 2-5 years. -Put in place waste reduction mechanisms Risk Monitoring Mechanisms Stakeholder Role Benchmark Board of Directors Facilitating the management to put in place the necessary polices on environmental challenges and employee relations Managers Implementing and safegrading any polices put in lace to cater for the risks therein Employees Assisting customers to adjust to any polices such as waste management and ensuring that the management delivers on its part of the bargain. Customers Working as a watchdog to ensure that company keeps to its commitment. Staff and Risk Assessment The risk monitoring mechanism has cited the role of the employee as one that demands them to assist customers in ensuring that they observe the existing polices. In connection to this, the employee the leads from the forefront in demonstrating to the customer how matters such as waste must be dealt with (MIT, 1995). For instance, the employees must demonstrate goodwill by directing customers to the right places of putting waste. These factors have been highlighted as important in consideration of the overall effect to the organization and to the community at large. For instance, the issue of employee remuneration attracts great interest from all stakeholders since it is seen to eventually reflect on the overall performance of the economy. In that regard, there is a tendency to look at the overall performance of the company vis a vis the remuneration of the employees. Individually, employees feel agitated if and when they feel that their contribution to the organization is not appropriately compensated while they tend to work well and feel motivate if their input is well looked into (Gonzala,2009). The importance of giving key consideration to employees is to ensure that you win their loyalty since they act as representatives of the organization. The essence of ensuring that the company is in a position to address issues related to the environment is mainly to ensure that the company is compliant with the several international and even internal laws as well as to enhance its responsibility for the sake of the larger society (Drizer, 1998) In any case, the company cannot operate in a vacuum and therefore it must be at of the larger society which has a responsibility of taking care of the environment. Therefore it must be realized that the being constantly charged with the challenging question of what the company may be doing to take care of the environment may not auger well with interested stakeholders if the people concerned do not give a reliable response. Dealing with Disruption For one reason the other, the mechanisms described above may fail to be fully implemented. There are several factors that may lead to this such as time limitations or limitations related to resources. Nonetheless, this may be dealt with by putting in place a committee that would be tasked with a specific duty of ensuring hat this plan takes place as scheduled. The committee should including people from the human resources department so that the department can be involved in dividing tasks among various employees, the finance department, environmental committee and leaders of the workers union. It would also be necessary that the senior management of the organization oversee the activities of these groups by getting feedback from time to time as well as being allowed to give their input. This would be triggered by ensuring that the people who sit in the committee believe in its course and are committed to achieving the objectives set. Maintaining and Testing the plan In putting in place such a plan,, it would be incomplete if the organization does not bring forth parameters to measure the extent to which the plan is successful or ways to bring in adjustments as well as an overall methodology of sustaining the plan. The following strategy may be adopted for this undertaking. Maintenance / Implementation plan Issue Testing Methodology Agenda I Employee relations -Employees’ satisfaction -Employee’ feedback -Improved work input by employees Agenda II Environmental care -Stake holders feedback e.g. national environmental board recognition of the initiative -Public feedback and recognition of the project -Overall visible result/outcome on the project. References Barbaro, M., 2006. "Wal-Mart Enlists Bloggers In P.R. Campaign". The New York Times. Accessed 23rd Jan 2013. Cherry ,T. Business Continuity: New Risks, New Imperatives And A New Approach, Brief By Ibm Global Services. 1999. Url:Http://Www Drizer K, 1998 International Business Continuity Planning Model Url:Http://Www.Dr.Org/Model.Htm Accessed 23rd Jan 2013 Fried, S.,2001 “Information Security: The Big Picture - Part Iv” Information Security Kickstart Highlights, Sans Giac. Gonzala ,F. 2009 General Business Continuity Terms Business Continuity Institute Glossary. Url:Http://Www.Thebci.Org/Frametrial.Html Accessed 23rd Jan 2013. Ghemawat, P; Ken A. 2006 "The Real Wal-Mart Effect". Havard Business School Jemler Z. 2001 What Is Business Continuity & Recovery Services (Bcrs)? Handout In Ibm Security And Availability Seminar. 2001. Massachusets Institue of Technology (MIT) 1995 MIT Business Continuity Plan Url: Http://Web.Mit.Edu/Security/Www/Pubplan.Htm (26 Sep. 2001) Mitchell, S. 2012. "Walmart's Greenwash: Why The Retail Giant Is Still Unsustainable". Grist.Org.. Accessed 23rd Jan 2013 Zook, M, Graham, M. 2006. "Wal-Mart Nation: Mapping The Reach Of A Retail Colossus". In Brunn, Stanley D.. Wal-Mart World: The World's Biggest Corporation In The Global Economy. Routledge. . Read More