Is Wal-Mart’s mission and vision aligned with the needs of their stakeholders?
After reading “Wal-Mart’s Midlife Crisis” It seems to me Lee Scott, current CEO of Wal-Mart is trying to stay in business by starting a new relationship everyday with out working on his current relationships. It is like neglecting the current issues and instead prefers to deal with new issues rather that facing the current ones. Since his hiring in 2000, the reputation of Wal-Mart (no fault of his) has had a major reputation problem as well as rising overhead and declining sales. But instead of facing his existing problems with failing stores and how to boost sales and concentrate on each store as an individual, he would just rather open up a new store everyday for the next 3 years. Part of the negative backlash is that there already are too many stores.
In May of 2008 Starbucks announced they were going to close 500 stores. This was due to over saturation – and a growing reputation of high priced coffee. What was once thought of as being part of the scene and having a cup of gourmet coffee was now just perceived as expensive bitter coffee. Too much of a good thing always comes with a backlash. There are so many Wall-Marts that they compete with them selves. In 2004-2005 major issues were brought to the eyes of the public about the “cost of low prices”. Many employees were given no medical benefits, and encouraged to apply for Medicaid (A medical benefits program administered by states and subsidized by the federal government. Under this plan, various medical expenses will be paid to those who qualify) through Wall-mart management. Women employees had proven to be discriminated against and overlooked for opportunities. Employees were encouraged to work off the clock for the fear of being replaced. Sweat shops were exposed in China of deplorable living conditions that actually had the workers living in dorms inside of the factory working 7 days a week. Management as conspiring to unionize thought of any organization of employees, and so often employees were fired. A big problem was that Instead of challenging these accusations, they decided to go about business as usual and these problems would eventually be fixed or go away. That looked arrogant and most people middle class folks decided to take their business else where instead of supporting this evil Goliath – but in actuality they have made improvements on certain conditions but little or no coverage from the press still left them will the reputation as the evil Goliath.
Today’s topic is Wall-Marts vision with the needs of the stakeholders, not a plan to get Wal-Mart out of trouble but I wanted to go ahead and address some of the problems that face Wal-Mart first, which affects the bottom line. Obviously Wal-Mart as a corporation’s vision for the future is more growth, at least 10% profits from each store and stability. The Official vision statement is: To become the worldwide leader in retailing. Wall-mart also broke down this statement into 9 sections. Section 1 is vision for the customers; while section 8 is their public image and 9 are their employees. I will focus on the customers and employees.
Mission Statement for the customers: “Our fist responsibility is to provide all consumers the best products and services with guaranteed satisfaction under one roof”. Wall-mart provides a wide array of products like toys, electronics, groceries, jewelry, ladies, men, and children’s apparel, and hard goods at reasonable prices. This is obviously been their ingredients for success. Since 1962 Sam Walton (founder of Wal-Mart) had a philosophy – price it low, pile it high, and watch it fly. It is still true to this day. Low priced goods are what brings shoppers in, and no matter what reputation Wall-mart might have been given lately, it will always be known for Low Prices- everyday. This at least gives the customer some assurance that they can always save money and be given the highest quality of products as in this portion of their statement: We will continue to offer the highest quality products at the lowest price to strive to be the best in the retail industry. This is why I have to agree that the customers are aligned in the vision of the company’s vision.
Wall-Marts vision statement for employees: “We are dedicated in recruiting rewarding, and retaining employees of good moral standing by providing benefits for excellent performance, providing clean environments to work in, and by providing equal-opportunity for all individuals”. This is what they have committed to and seems to making progress. As of October 25th 2005, Wal-Mart Stores Inc. pledged to more closely monitor suppliers’ factories for labor abuses, improve health benefits for employees and support an increase in the federal minimum wage – taking on critics of its treatment of employees while acknowledging the needs of working-class customers. Scott has dedicated to bring insurance within reach of all his employees, a major point with labor, which contends that Wal-Mart’s combination grocery and general merchandise Super-centers drive out unionized supermarkets that offer higher wages and low-cost family healthcare. The company’s insurance programs cover fewer than half of 1.2 million U.S. workers at more than 3,600 stores. Wal-Mart will offer some associates a new plan with premiums as low as $11 a month, a program the company hopes to expand nationally. Other employees will be offered a plan for about $25 a month for individuals and $65 for families – about 40% to 60% less than the current plan. The new plan has a $1,000 deductible, similar to the company’s current program, but will allow three doctors visits for each family member, with a $20 co-pay, before the deductible kicks in, a spokesman said. Scott said Wal-Mart would support an increase in the federal minimum wage from the current $5.15 an hour. On average, the company says, it pays full-time U.S. associates $9.68, so a higher minimum wage would have a much tougher effect on Wal-Mart’s smaller rivals.
Looking at the numbers, Wal-Mart seems to be on their way back from a midlife crisis. As for October 2008, stock has fallen to $50 because of the stock market crisis, but as the market stabilizes it should reach the $59 mark where it was in August and September of that year at least, which coincidently is where it was from 2000 until 2005. Then in April of 2005 as Wal-Mart hit their skid, the stock dropped to $42 dollars and remained there until April of 2008, and has spiked again to its original Value of around $57-59. So with the commitment to its employees and customers with their vision, it looks like Wal-Mart is back on the right track with their stakeholders.
The Real Facts About Wal-Mart. Article from:
· Wal-Mart 2000 Visionary Statement. From: http://126.96.36.199/search?q=cache:L8nbUMotXyEJ:faculty.uwstout.edu/adekolaa/STRAMGT/powerpoints/Wal-Mart%2520-%25202000.ppt+Wal-Mart+2000+visionary+statement;cd=1;hl=en;ct=clnk;gl=us;client=safari
Wal-Mart’s Midlife Crisis, By Anthony Bianco APRIL 30, 2007. Article from:
Wal-Mart Supports Federal Wage Increase By Abigail Goldman
October 25, 2005. Article from: http://articles.latimes.com/2005/oct/25/business/fi-walmart25