Sustainability Efforts in Wal-Mart - Research Paper Example

? Sustainability Efforts in Wal-Mart Sustainability Efforts in Wal-Mart Introduction An organization’s long term sustainability depends on the effective performance of four major functions including planning, organizing, leading, and controlling. A firm, regardless of the industry it belongs, has to design long-term and short-term strategies to pace with the changing business environment. Strategic efforts taken in this regard can be termed as sustainability efforts. This paper will explore the sustainability efforts of the Wal-Mart, an American multinational retail corporation giving particular emphasis to its history of strategic success and flaws. Company Overview According to the Fortune Global 500 list in 2013, Wal-Mart is the world's second largest public corporation and largest retailer in the world with over two million employees. The company was founded by Sam Walton in 1962 and still it is owned and controlled by the Walton family with 50 percent of its shares. It was in the late 1980s and early 1990s the company rose to be a reputed national firm by opening an array of outlets and clubs. According to the reports, Wal-Mart has 8,500 stores in 15 countries, under 55 different names like Walmex (Mexico), Asda (UK), Seiyu (Japan) etc. Sustainability has been one of the major concerns for the company since its beginning, and now it tends to rely on suppliers to carry out its sustainability efforts. Wal-Mart in its annual Global Sustainability Milestone (Sept. 12) meeting held in Bentonville “presented nine initiatives that have raised the company’s overall sustainability index reading by 12% in the past year” (The City Wire, 2013). The company believes that the suppliers can do better in taking up sustainability efforts as compared to retailers. Goals and Strategic Efforts Obviously, the Wal-Mart has its own clearly set goals and strategies throughout the planning, organizing, leading, and controlling functions. Regarding the planning function, it seems that the company practices different levels of management planning to develop visions, goals, and objectives. As Bedford, Cable, Oulicky, Sanchez (2007) point out, Wal-Mart’s management specifically focuses on planning processes so as to enable the firm to evaluate where they are, where they need to go, how they can reach there, and what are the main strategies to be deployed. Evidently, in each stage of its planning, the Wal-Mart tries to retain its status as a value driven company. Wal-Mart’s attributes include its physical strength that greatly relates to the firm’s organizing function. Other organizational resources including human capital, knowledge, and money also constitute its organizing function. Wal-Mart normally charges low prices for its products. Hence, it pays specific attention to organizing its physical assets so as to ensure its sustainability. If the company’s asset organization is not efficient, naturally the firm would incur increased production costs and ultimately it may be compelled to raise prices. Regarding the leading function of the Wal-Mart, it seems that the company has been maintaining a servant leadership strategy. To illustrate, the company has framed effective mechanism to develop leaders who willingly listen to their partners and subordinates. The management believes that the servant leadership strategy would help the firm to motivate its workforce to accomplish the company’s long term goals. The company offers its leaders many training programs like Business Leadership Series. For instance, as the company announces, “opportunities to lead at Wal-Mart encompass many areas, such as leadership development, talent management, business action plan development, and experiential learning on the job” (Wal-Mart Corporate, n.d). Well structured control mechanisms and their right time evaluation also constitute Wal-Mart’s success. As Lichtenstein (2005) points out, market control, clan control, performance standards, and manager audits are the major control mechanisms employed by the Wal-Mart. These control mechanisms help the company to verify if its implemented strategies are performing effectively and producing projected results. The Wal-Mart’s controls mechanisms also intend to promote the confidence of its employees, buyers, and suppliers. The top executives of the concerned departments hold the power to take final decision on various control mechanisms. Altogether, Wal-Mart’s control mechanisms monitor the firm’s operational efficiency and thereby resolve all issues identified. Admittedly, Wal-Mart has distinctive policies to manage its planning, organizing, leading, and controlling functions. The strategic steps taken in these four functions have helped the organization to dominate the global retail market throughout its corporate history. Business Expansion Like many other business firms, Wal-Mart also had to enter foreign markets due to multiple reasons. There are three reasons that made Wal-Mart decide to go global. The first one is the increasing competition in the domestic market. For example, companies like K-mart and Target had started eating into Wal-Mart’s market share through aggressive marketing strategies. So, Wal-Mart decided to explore new markets. The second reason is that the company understood the potential of markets outside the US. And, confining its operations to the US market which represents only 4% of the world population was no more a good idea. The third reason is that globalization and the subsequent trade liberation around the world enabled businesses to operate anywhere in the world. As stated already, Wal-Mart has been one of the global leaders in the retail industry that thoughtfully apply management planning function to gain competitive advantages over its rivals. In the planning phase, the Wal-Mart management chooses appropriate short term policies and courses of action to meet the firm’s long term goals and objectives. In addition, the company analyzes competitor prices on identical products and, based on this comparison; it will set lowest possible prices to offer customers. It seems that the company tries to gather customer feedback and employee opinions before planning a policy or program. The company conducts market surveys and online polls to effectively plan its new market entry and or business expansion. The firm’s efficient strategic planning played a notable role in positioning the corporation at the top of the world’s retail industry. Wal-Mart’s strategic planning team gives great emphasis on ethnical diversity because the firm the corporation has a global presence. While analyzing the Wal-Mart’s corporate history, it is obvious that the firm’s budgetary concerns have been the central factor that drove the business to success. As we discussed earlier, the organization follows a low cost strategy and hence it is essential for the firm to extensively trim down its operating expenses. The organization gives prime focus on budgetary control so as to offer increased financial benefits to its customers. Since fixed costs remain unchanged regardless of sales volume, the corporation gives specific focus on variable costs. In order to reduce costs; the company deploys several approaches such as budgeting payroll, cutting of travelling expenses, and increased technology sector investments. Budgeting payroll is one of the most notable strategies used by Wal-Mart to review departmental costs and thereby a balance between employee hiring and fund availability. Finally, Wal-Mart’s financial managers are cautious to make certain that actual expenditure never exceeds planned budgetary expenses; otherwise, they immediately seek solutions to fix the problem. Sustainability Effort Failures Reports indicate that Wal-Mart has failed to achieve its sustainability efforts in many respects. As Mitchell, a senior researcher at the Institute for Local Self-Reliance reports, the company’s promises on environmental sustainability (promises to go green) still remain ‘more hype than reality’; and “Wal-Mart has a highly unsustainable business model, built on shipping goods long distances, selling mountains of very short-lived products, and big sprawling stores that entail lots of driving" (as cited in Sheppard, 2013). Another report released by the Institute for Local Self-Reliance (ILSR), shows that even since the launch of the 2005 campaign, ‘Wal-Mart’s greenhouse gas emissions have grown 14%’ (Edwards, 2013). Many people are skeptical about the reliability of Wal-Mart’s sustainability campaigns including ‘sustainable agriculture’, ‘100% by renewable energy’, ‘Global Sustainability Milestone Meeting’, and many more. Although the company claims to have reduced pollution and waste, reports indicate that the firm’s ‘store-waste reduction programs’ are ineffective compared to the volume of pollution and garbage that result from consumption of Wal-Mart goods. In the same way, the company’s efforts to achieve ‘running on 100% renewable energy’ has lost credibility due to its slow progress on renewable. Wal-Mart is also questioned for the compromising quality and durability of its consumer goods, which expand the amount of material consumers buy and discard across the globe. In contrast to its ‘go green’ promises, Wal-Mart has been consuming land avidly for launching several supercenters in the U.S. and other regions; and in many cases, the land it acquired include vital habitat for endangered species. Yet another criticism is that Wal-Mart’s “sustainable agriculture” is only a promotional tactic. Although the company claims to support sustainable food production, it is responsible for industrializing the food system. The company has been using its buying power and business practices to intensify the wave of mergers in the food industry. Many argue that Wal-Mart’s distribution model is still favorable only for large suppliers rather than local producers. Conclusion Wal-Mart has a very successful story of business. It has performed well in planning, organizing, leading, and controlling functions throughout its history. However, when it comes to corporate social responsibility, the company is facing an array of reasonable criticism. Recent reports clearly point to the failure of Wal-Mart’s environmental sustainability efforts. References Bedford, M., Cable, J., Qulicky, W & Sanchez, C. (2007). Wal-Mart: Strategic management. Retrieved from http://resume.edjent.com/pdfs/strategicmanagment.pdf The Citywire staff. (2013). Wal-Mart highlights sustainable efforts. The Citywire. Retrieved from http://www.thecitywire.com/node/29564#.Uqqct9IW0l8 Edwards, A. (2013). “New Report Unveils Hidden Cost of Walmart's Climate Damage, Failure to Meet Environmental Target”. Institute for Local Self-Reliance. Retrieved from https://www.commondreams.org/newswire/2013/11/13-6 Lichtenstein, N. (2005). Wal-Mart: Template for 21st century capitalism. New Labor Forum, 14(1), 21-30. Sheppard, K. (2013). “Walmart's Sustainability Results Don't Match Promises, Report Finds”. Huffington Post, 13 Nov. retrieved from http://www.huffingtonpost.com/2013/11/13/walmart-sustainability_n_4263032.html Walmart Corporate. (n.d). Opportunity to lead. 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