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(A) DISCUSSION CASE: Wal-Mart

Ques.1:-How would you describe the managerial philosophy of Wal-Mart? What principles are involved? What are the overriding aims, values, and goals of Wal-Mart? Answer: - The managerial philosophy of Wal-Mart was to emphasize on low prices and this strategy continues today as reflected in its marketing campaign of "Everyday low prices." The goal of Walmart is to achieve low retail prices by leveraging its buying power as the world's largest, retailer and by controlling labour costs. Wal-Mart cites several values that it promotes in its own self-description. Wal-Mart describes itself as a business that "was built upon a foundation of honesty, respect, fairness and integrity." The principles that are followed by Walmart are: respect for individuals, service to customers, and striving for excellence. These are also called as basic beliefs attributed to founder Sam Walton. Principles involved Honesty Respect Fairness and integrity

Aims, Values and goals of Wal-Mart Respect for Individuals Service to consumers Striving for excellence

Ques.2:-Evaluate the management philosophy of Wal-Mart from the point of view of stockholders, employees, customers, the local community, and suppliers.

Answer:-At first glance, there are many values promoted by Wal-Mart's success. Stockholders have received significant financial benefits from Wal-Mart. Consumers also receive financial benefits in the form of low prices, employees benefit from having jobs, many businesses benefit from supplying Wal-Mart with goods and services, and communities benefit from tax-paying corporate citizens. For example (i) Some critics charge that Wal-Mart's low-priced goods, and even their placement within stores, are a ploy to entice customers to purchase more and higher-priced goods. (ii) (iii) Walmart is criticized for paying its workers poverty level wages. Suppliers had to enter into a bid so that Walmart will carry their product in its stores. This is harm for suppliers both nationally and internationally. (iv) Critics point out that when the largest national employer establishes low workplace standards for wages, benefits, and labour practices, other

employers have both the incentive and opportunity to follow. As the competing janitorial service companies learned, competing fairly and legally can result in the loss of business. (v) Many local communities also criticize Wal-Mart as a major factor in the demise of small towns and local businesses. Small retail businesses find it difficult to compete with Wal-Mart's pricing and marketing strategies and local communities suffer when Wal-Mart builds giant stores in suburban and rural locations. This not only encourages sprawl and places additional burdens on roads and transportation, it can undermine the local tax base. All these examples portray a negative managerial philosophy of Walmart from the point of view of major constituencies.

Ques.3:-Should business management always seek the lowest prices for its customers and the highest rate of return on investment? What reasons might there be for seeking something less for customers and stockholders?

Answer: Business management should always seek reasonable prices which would justify product or service worth. Highest rate of return attracts more investors, but it may be at the cost of high risk. Reasons for seeking something less for customers and stockholders For taking competitive advantage Attain profit maximization and long term survival

Attain customer and brand loyalty If only customers and stockholders are given priority over others, this will result in: (i) (ii) (iii) (iv) Disrespect towards the organization by other groups. They try to shift to other business houses. Market image of the company will be in danger. Business will incur losses and in turn customers and stockholders get affected.

Ques.4:-Economists define costs in terms of opportunities forgone. What opportunities are forgone by Wal-Mart's "everyday low price" marketing strategy? Who pays the costs of Wal-Mart's low prices?

Answer: - 'Ethical criticisms have been raised against Wal-Mart on behalf of every major constituencycustomers, employees, suppliers, competitors, communitieswith whom Wal-Mart interacts. By controlling labor costs through wages, minimum work hours, and high productivity, and by keeping unions away, Wal-Mart is able to offer consumers the lowest everyday prices. Among the criticisms of Wal-Mart's labor practices are claims that Wal-Mart pays its workers poverty-level wages. Wal-Mart offers health care benefits to full-time workers, but/relative to other employers, Wal-Mart employees pay a disproportionately high percentage of the costs. According to critics, these low wages and benefits result in many Wal-Mart employees qualifying for government assistance programs such as food stamps and health care, effectively

creating a government subsidy for Wal-Mart's low wages. Wal-Mart has also been accused of illegally requiring employees to work overtime without pay and to work offthe-clock. Wal-Mart has also been accused of obstructing employees' attempt to organize unions. The National Labor Relations Board filed suit against Wal-Mart stores in Pennsylvania and Texas charging illegal antiunion activities. Wal-Mart alleging sex discrimination against women employees. Employees of Walmart and Government pay the costs of Walmarts low prices. WalMart offers health care benefits to full-time workers, but/relative to other employers, Wal-Mart employees pay a disproportionately high percentage of the costs. According to critics, these low wages and benefits result in many Wal-Mart employees qualifying for government assistance programs such as food stamps and health care, effectively creating a government subsidy for Wal-Mart's low wages.

Ques.5:-Wal-Mart's wages are above the legally required minimum wage, and health benefits are not legally mandated. Are there reasons for a business to take actions not required by law but which might reduce profits?

Answer: - Wal-Mart's wages are above the legally required minimum wage, and health benefits are not legally mandated. These are the reasons for a business to take actions not required by law but which might reduce profits. As employees are assets for any company, it is required to take care of them for smooth functioning of company.

According to critics, these low wages and benefits result in many Wal-Mart employees qualifying for government assistance programs such as food stamps and health care, effectively creating a government subsidy for Wal-Mart's low wages. Wal-Mart has also been accused of illegally requiring employees to work overtime without pay and to work off-the-clock. A law suit was filed on behalf of several of these workers claiming that Wal-Mart knowingly employed illegal workers as part of a scheme to pay below minimum wages, deny overtime pay, and otherwise exploit their illegal status. This reflects over companys brand image, profitability and ROI of stockholders, in the form of their share value.

Ques.6:-Does Wal-Mart have any responsibilities to its suppliers other than those specified in their contracts?

Answer: - Wal-Mart have following responsibilities to its suppliers other than those specified in their contracts. Wal-Marts pursuit of profits does not lead to the greatest collective good for society because many small business owners and Wal-Mart employees have to declare bankruptcy. This occurs because customers prefer the lower prices offered at Wal-Mart to smaller convenience stores. According to utilitarian theory and Corporate Social Responsibility Wal-Mart should create the greatest possible good for the entire society. Requiring Wal-Mart to satisfy the stockholders and the stakeholders- suppliers, shareholders, employees, customers, and managers. Through the help of multiple

partners Wal-Mart can grow as a corporation and return the profits earned to the stakeholders. Many local communities also criticize Wal-Mart as a major factor in the demise of small towns and local businesses. Small retail businesses find it difficult to compete with WalMart's pricing and marketing strategies and local communities suffer when Wal-Mart builds giant stores in suburban and rural locations. This not only encourages sprawl and places additional burdens on roads and transportation, it can undermine the local tax base. Further, the loss of local business has a trickle-down effect when local suppliers and professionals, such as accountants, lawyers, and banks; suffer the loss of local business to Wal-Mart's national and international suppliers. Wal-Mart's aggressive strategy to lower costs also is criticized for the harms it can cause suppliers both nationally and internationally. Wal-Mart has been known to force suppliers to bid against each other in a type of "reverse auction" in which suppliers compete to see who can offer their products at the lowest costs. Because Wal-Mart controls such a large market segment, many suppliers cannot survive if Wal-Mart declines to carry their product. This practice has caused some businesses to go out of business, and many others to find ways to send production off-shore. One result is that Wal-Mart, which promoted a "Buy American" marketing campaign is responsible for the loss of uncounted American jobs as American businesses have been forced to outsource their production as the only means available to meet Wal-Mart's price targets. Wal-Mart have responsibilities to remove the same and ethically running its business

B Discuss the current CSR Practices of any one firm in India. Larsen & Toubro Limited (L&T) is a technology, engineering, construction and manufacturing company. It is one of the largest and most respected companies in India's private sector. L&T has an international presence, with a global spread of offices. A thrust on international business has seen overseas earnings grow significantly. It continues to grow its global footprint, with offices and manufacturing facilities in multiple countries. The company's businesses are supported by a wide marketing and distribution network, and have established a reputation for strong customer support. L&T believes that progress must be achieved in harmony with the environment. A commitment to community welfare and environmental protection are an integral part of the corporate vision. In response to changing market dynamics, L&T has gone through a phased process of redefining its organisation model that facilitates growth through greater levels of empowerment. The new structure is built around multiple businesses designated Independent Companies or ICs. The Company's philosophy on Corporate Governance is built on a rich legacy of fair and transparent governance and disclosure practices, many of which were in existence even before they were mandated by legislation. The Company's essential character revolves round values based on transparency, integrity, professionalism and accountability. At the highest level, the Company

continuously endeavours to improve upon these aspects and adopts innovative approaches for leveraging resources, converting opportunities into achievements through proper empowerment and motivation, fostering a healthy growth and development of human resources. L&T believes that the true and full measure of growth, success and progress lies beyond balance sheets or conventional economic indices. It is best reflected in the difference that business and industry make to the lives of people. Through its social investments, L&T addresses the needs of communities residing in the vicinity of its facilities, taking sustainable initiatives in the areas of heath, education, environment conservation, infrastructure and community development.

HEALTH L&T's participates in building a healthy community through continuing initiatives in several areas of healthcare, with a focus on mother & child care and HIV/AIDS awareness. All L&T locations, including construction sites, have in-house AIDS awareness programs. Five additional mother & child care centers were set up in 200607. In partnership with local NGOs, these centres benefit children of commercial sex workers, street children and tribal communities. Through health care centres and regular family camps L&T organizes health checkups, provides gynaecology and laboratory facilities, carries out free cataract surgeries and intra ocular lens implants, and helps maintain health data for children. Supply of equipment and aid for orphanages and physically challenged children, periodic

counseling to combat rampant alcoholism, awareness camps on childcare, reproductive health, sanitation, dental check-up, provision for safe drinking water, cancer awareness etc. are other healthcare activities that L&T supports. EDUCATION L&T's diverse and sustained programmes in education provide underprivileged children with learning opportunities through supply of educational materials, teaching aids, recreational tools and up scaling school infrastructure. L&T also enriches children's lives through programmes like summer camps, maths coaching, providing facilities like science laboratories, scholarship to deserving students, etc. The vocational training institutes of the Larsen and Toubro Public Charitable Trust, provide local communities with skill-based training in Formwork, Masonry, Agro Mechanics, Electricals, Fabrication, Welding and Housekeeping. Various diploma courses are also conducted by L&T Institute of Technology for the children of employees. L&T has developed training modules in local languages in six centres across India for imparting skills sets in construction. L&T Training Centers provide courses for improving the standards of electrical engineering practices and for upgrading knowledge of maintenance, repair and welding. ENVIROMENT Global warming: at L&T, we have always been conscious of the need to maintain harmony with the environment. We continuously seek newer environment-friendly approaches in all our operations energy conservation, exploring alternative sources like wind and solar energy, waste water reduction, etc.

The Zero Discharge approach of the Powai Campus saves over 350,000 litres water every day through water treatment and recycling. More than 13,500 trees have been planted in different L&T campuses in the last year, and an additional 4,000 saplings were distributed among local communities. RESPONSE TO NATURAL CALAMITIES L&T and its employees have provided relief measures during natural calamities like earthquake and floods. L&T has assisted in disaster relief through employee and corporate donations, employee volunteering, supply of construction material, medical and food supplies. After the floods in Surat (Gujarat-India), L&T played a major role in road-clearing operations, organising medical camps, and supply of food, water, clothes and other relief materials.

EMPLOYEES VOLUNTEERING L&T encourages employees to volunteer for CSR activities, resulting in a self-driven approach while retaining consistency. L&T employees and the ladies clubs formed by their families at different locations, serve their communities by investing personal resources and time.From taking initiatives in building the next generation of productive citizens, empowering women, paying regular visits to old age homes and orphanages, to organising blood donation camps, our employees have always believed in truly making a difference to the world in which they live.