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Can the outcomes that are socially undesirable be reined in to an acceptable level within a capitalist economy? Wal-Mart has done this in the face of considerable corporate competi- tion: Before Walton had opened 20 stores, there were Kmart stores. The dramatic growth of Wal-Mart Corporation has reflected the dynamism with which Sam Walton oper- ated the organization, maintaining the marketing principles of low prices and customer sat- isfaction that he practiced and preached while becoming the single largest retailer in the world, and growing.

International sales increased 41 percent in and represent Employees Wal-Mart is presently the largest U. In , there were an estimated , Wal-Mart employees in the United States, with another , employees internationally Wal-Mart d. In , the total num- ber of associates climbed to 1. This makes Wal-Mart the sec- ond largest overall employer in the country, second only to the federal government Peled see Table 1.

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Imagine your personal income increasing by these percentages from one year to the next, for seven consecutive years see Tables 2 and 3. In , Wal-Mart ranked as the largest corporation in the United States and the world in terms of sales revenue, but note that the U. Formerly Dayton-Hudson Corporation. In fact, only about 22 countries have equal or more revenue than Wal-Mart, making it comparable to the gross domestic product of Austria Belsie Retail Market Share U. Wal-Mart dominance is 53 percent of the total combined market share of the above corporations, more than three times the market share of its closest competitor.

Working Poor? This section of the case study outlines the more vital issues facing U. Wal-Mart em- ployees. How can Wal-Mart cut operation costs and simultaneously create an environment that moti- vates employees and promotes their loyalty? The aim of this section is to provide informa- tion necessary for readers to answer this question. The basic approach to management at Wal-Mart is to rhetorically treat associates as equals, to keep them fully informed of company developments, to invite them to share their own suggestions regarding company policy and practice, and to make them feel that their contributions are important and that they are listened to Vance and Scott It seems probable that employees would be happy to be working for such a company, one listed in the top one hundred companies to work for by Fortune, Hispanic Magazine, and Latina Magazine Wal-Mart b.

The low income of full-time Wal-Mart associates may be in part a reflection of their workweek. A shorter workweek may partially explain why half of Wal-Mart as- sociates, including some full-time, qualify for food stamps and even cash income assistance in states with higher social insurance benefit levels Wal-Mart Watch ; Shils and Taylor In fact, the New York Times has uncovered evidence that Wal-Marts in as many as eighteen states have gone to the extreme measures of forcing workers to work off the clock for hours at a time.

The report notes that managers have deleted worked hours from time cards. Managers have also told workers to start work without punching in or to punch out and continue working. Some workers in California, Louisiana, New York, Ohio, Oregon, and Washington even reported being locked in the store after they had clocked out as a measure to keep them cleaning and doing other work off of the payroll to keep labor costs low.

The report noted that workers complied out of a fear of being fired Greenhouse At the same time, research on income inequality demonstrates that the richest 20 per- cent particularly the richest 1 percent of U. An associate at the Flagstaff, Arizona, Wal-Mart claimed that in her department, eight of the ten employees hold a second job and a few were forced to hold three jobs just to make ends meet. Here, it may be of interest to note some of the impacts of Wal-Mart on the grocery in- dustry in and of itself.

First, Wal-Mart is changing the playing field. By competing with the grocery industry through retail management, it reduces the cost of managing a supermarket. Already, Wal-Mart is the largest grocer in the United States and indeed, the world. To sustain deepening competition among grocers, the industry is see- ing growing mergers and acquisitions and fewer independent grocery stores Boarnet and Crane With Wal-Mart able to pay its grocery workers retail wages, it will likely con- tinue to increase its hold in that industry globally and put stress on its large and small competitors.

Introduced in , the profit-sharing and stock-ownership plans provide an incentive for employees to work hard as they have a shared interest in the overall well-being of the company. Theoretically, their own incomes become linked to their productivity. From the perspective of the com- pany, these plans have several benefits: 1 Wal-Mart does not need to pay high labor costs when the company is not experiencing profit growth, 2 associates are motivated to work hard, and 3 stock benefits can be used to redirect complaints about poor pay.

The program is structured using a formula based on profit growth. Employees are awarded a contribution to their profit-sharing plan according to their wages, which employ- ees can keep or cash out when they leave the company. Between and , the profit-sharing bonus value paid out to employees averaged 6 percent of their wages Walton and Huey Boarnet and Crane suggest that this low number of covered employees probably increases the use of public services and public health; the cost of employee benefits, therefore, is passed on to the general community.

Wal-Mart refused to buy the seven Woolco stores that had union- ized, leaving 1, Canadians jobless. In the province of Quebec, French is the official lan- guage and, for some, the only language they speak. Yet when Wal-Mart took control of the Woolcos located in Quebec, they required employees to sign contracts that were made available only in English Mander and Boston — Calculated using investment calculator at Wal-Mart Stores, Inc.

Jacques et al. Should corporations provide fair or living wages to employees? On local gov- ernment revenue? On family life?

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Wal-Mart won a court ruling against the United Food and Commercial Workers UFCW in October of Wal-Mart wins again , and the right of a union to organize workers at the location of labor see Appendix A was temporarily restrained while the union was banned from Wal-Mart prop- erty. Wal-Mart, the leading direct private employer in the United States, had once again avoided the union by winning a battle with the unions in court. In Merrill, Wisconsin, Wal-Mart showed antiunion videos to associates, and the com- pany was also charged with destroying union literature and intimidating workers Dedman In decisions dated , , and , Wal-Mart was found to have threatened associates affiliated with protected organizing activities National Labor Relations Board Also, because, as one study esti- mates, for every person Wal-Mart employs, they displace 1.

This is why some studies suggest that social service needs, such as food stamps and health care, go up in an area where Wal-Mart is a major employer Shils and Taylor ; Boarnet and Crane To offset this increase in costs, Wal-Mart would likely argue that it would need to in- crease prices or lay off large numbers of workers if workers unionized.

Kenneth Stone noted that as with many of the effects of Wal-Mart on a community, this kind of es- timate assumes low or static growth in the retail market of that area; in high retail growth, these estimates be- come much more complicated.


The size of the retail pie available is key—if the pie is small, static, or shrinking, Wal-Mart is more of a threat than in a large retail pie that is growing. One department in one store in the United States has voted to unionize, and one store in Canada has been unionized.

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After this vote, Wal-Mart implemented a policy to begin using pre- packaged meat. This would then allow them to close the butcheries in their stores, but Wal-Mart has denied the closures are related to the union and have anything to do with bar- gaining in good faith demanded by the NLRA Wal-Mart a.