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National Institute of Fashion Technology

Jodhpur

Corporate Social Responsibility


Assignment 1
Corporate Social Responsibility of Walmart

Submitted To: Submitted by:

Ms. Urvashi Saxena Payal Mahant

(Asst Prof) DFT 6


CONTENTS

Sr No. Topic
1 Introduction
2 CSR Responsibilities
3 Impact on communities and environment
4 Walmart as an early leader
5 Responsibility of walmart towards its employees
6 Ethics in blocking new entries iin the market
7 Major CSR Initiatives
8 Their Focus and objective
9 Conclusion
10 References
INTRODUCTION

Wal-Mart was started in 1962 by Sam Walton. The first target market of this store was rural
towns with population of less than ten thousand people. It was established to provide its
customers with such a customer service which will be loyal, fast, and friendly and will provide
consistently low prices. Later on, Wal-Mart expanded its business in other larger countries also
to become international store.

Presently Wal-Mart has four main divisions around the word which are Wal-Mart Supercenters,
Discount Stores, Neighborhood Markets, and Sam‟s Clubs warehouses. These comprised of
more than 100 customers visiting Wal-Mart per week. In addition, Wal-Mart also has provided
its customers with thousands of jobs, low prices but high value being socially responsible. Sam
has also started to get the Wal-Mart involve in environmental awareness. As Sam has made Wal-
Mart socially responsible for environmental awareness, so these stores also started making shelf
tags from 100 percent recycled papers.

Whenever Wal-Mart enters in a new small town of America, the small merchants there get feared
of Wal-Mart because they will no longer remain the low price providers of goods. Some
merchants have pulled out their businesses by their self when Wal-Mart entered their place.

MAJOR ISSUES

There are three main issues with Wal-Mart expansion. These are:

1. Putting local small business merchants out of business


2. The creation of urban sprawl
3. Traffic congestion

CORPORATE SOCIAL RESPONSIBILITY

It is the continuing commitment by business to behave ethically and contribute to economic development
while improving the quality of life of the workforce and their families as well as of the local community
and society at large. The analysis of corporate social responsibility of Wal-Mart by SNG 4-part
CSR mode is given below:
ECONOMIC RESPONSIBILITIES:

Wal-Mart has fulfilled it economic responsibilities successfully. It is a profitable store having net
sales over $345 billion (2007). As Wal-Mart is profitable so it has given base of success to all the
other aspects of CSR.

LEGAL RESPONSIBILITIES:

Wal-Mart is nor legally responsible company. It is because it gives its employees very low
salaries, due to which Wal-Mart is the most sued company in America.

ETHICAL RESPONSIBILITIES:

Company is ethically responsible. It can be seen through its campaigns of Buy American and
Environmental Awareness plan. But there are some issues in this too. Wal-Mart doesn‟t fulfill
the responsibilities towards small merchants.

PHILANTHROPIC RESPONSIBILITIES:

This is the area which is said to be strong as Wal-Mart has done a lot of corporate citizen
initiatives and effective management. They have also established Walton Family Charitable
Support Foundation.

IMPACT OF SPRAWL, TRAFFIC CONGESTION ON COMMUNITIES

AND ENVIRONNMENT

Wal-Mart has become the threat to the environmental landscape. It is also threat to the
communities as well. The reason behind is its expansion and building of stores on the vast areas.
By doing this, Wal-Mart is depressing the economic health of the communities and other
downtown stores. These mega stored are increasing at a very alarming rate leading to the sprawl
in the communities. This increasing rate is resulting in wetlands destruction, flooding potential,
increased traffic and has impacts on locally owned stores also.

Landscape has effected because Wal-Mart has many stores which are unused with vast parking
lots too. Moreover, such types of stores are built in such areas of towns which are not accessible
without driving so result in increase in traffic. This will lead to air pollution, water contamination
and also at some point may call for more roads.

RESPONSIBIITIES TOWARDS COMMUNITIES AND MERCHANTS

Yes, Wal-Mart has responsibility towards the merchants and communities where it enters. It
should use the energy in clean and efficient way. Moreover, the main responsibilities include
giving locals with resources, relief hunger, create opportunities for males as well as females
there, produce more with fewer resources, and avoid wasting of resources.

MOTIVATIONAL GENIUS

Sam Walton, founder of Wal-Mart is said to be a motivational genius. According to Sam Walton,
“Individuals don‟t win, teams do. If you work for Wal-Mart, Sam Walton will be your partner,
not your boss”. He is the first to introduce profit-sharing pan for its employees. In this way Sam
has made its employees as its partners so that they will also work for the company with
encouragement and full effort. Moreover, he started developing competition among its
employees. The winner of the competition is then be rewarded by payoffs. He also has created
cross-pollination. This has encouraged the managers to make them challenging by switching to
different departments.

THE WAL-MART WAY

Walton was of the view to have strict control over its stores, operations of the stores, quality of
its products and expenses too. Wal-Mart stores are based on supply chain management practices.
Wal-Mart has pride that it has provided with its customers with low prices by reducing its own
costs due to supply chain practices. For every Wal-Mart region, there is a dedicated Regional
Vice-President who looks after that region. For management, Wal-Mart has used the TQM that is
total quality management. By this way it has lowered its prices, increased its productivity and
finally got the control over the market.

Wal-Mart has a strong impact on the community. The main impact of it is on the economy as a
large discount retailer in a local market. It results in crowding out of small retailers by offering
lower prices. The local retailers will suffer a lot and this Wal-Mart has a very negative
impact on them. Wal-Mart‟s success has lead to the closing of many small stores. It also has
changed the purchasing approaches of the customers.

SAM: NO MORE MOTIVATONAL LEADER

Sam is not considered as motivational leader now. This is because company has diverted from
the basic principles of the Sam for the success. The new management at the Wal-Mart, after the
death of Sam Walton, has changed its attention towards the competition. Moreover, the company
has also started increasing prices on some of the items instead of lowing.

WAL-MART AS AN EARLY LEADER

BUY AMERICAN

Wal-Mart was famous for its low prices. But suddenly it has started more money on U.S made
products. According to Wal-Mart it was to boost the sourcing of Wal-Mart. It was taken as good
sign of corporate social responsibility as it was supposed to create new jobs for the American
people. They also said that this campaign will help to attract and bring back many other firms to
the America which will boost up the economy of U.S. these campaigns depicts true picture of
Wal-Mart‟s corporate social responsibility. By this, Wal-Mart has supported American based
companies and manufacturer by giving them large orders, by doing business with them and by
giving them larger contracts to save them and preventing them to going out of the business.

ENVIRONMENTAL AWARENESS

Wal-Mart also started an environmental campaign. In this campaign Wal-Mart has claimed that
they have worked for the reduction of green house effects and emissions. But in reality it was not
like that. The green house emissions of the Wal-Mart keep on increasing the gasses which are
not god for the environment. Moreover, Wal-Mart always supports that politician which is
destroying the environment.
RESPONSIBILITY WAL-MART HAS TOWARDS ITS EMPLOYEES

(AFTER CLOSING OF STORES)

Wal-Mart has recently closed its five stores. Due to which many employees have loosed their
jobs. Some of them might be very responsible and loyal towards the organization. It is not their
mistake as Wal-Mart has closed its stores. Now it is the responsibility of the Wal-Mart to have
those employees with new jobs as well. If job is not available, then paying off those employees
till they find a new job for themselves. The loyal employees must be given a place in any their
store of the Wal-Mart as these will be very beneficial for the company. This closing has not only
impacted the employees but also their families and community as a whole. The employees
should be treated with decency and respect whether firing off. Make counseling with such
employees once before they leave. Provide them with many benefits as well.

STAKEHOLDERS

The main stakeholders of the Wal-Mart are divided into two categories: Market and non-market.

MARKET STAKEHOLDERS

 The stockholders
 The Wal-Mart Executive
 The Employees
 The Communities where Wal-Mart is located
 Consumers
 Suppliers
 Non-Profit Organizations
 Competitors

NON-MARKET STAKEHOLDERS

 The Labor Unions


 The International retail Stores
 The Politicians
MARKET STAKEHOLDERS:

 The stockholders: interested in return on investment


 The Wal-Mart Executive: interested n stock options
 The Employees: interested in their income
 The Communities where Wal-Mart is located: interested in jobs and their day to day
necessities for purchasing
 Consumers: interested in their purchases
 Suppliers: interested in orders for jobs and profits
 Non-Profit Organizations: interested in foundations from Wal-Mart
 Competitors: interested in knowing about Wal-Mart‟s expansion and convenience.

NON-MARKET STAKEHOLDERS:

 The Labor Unions: because Wal-Mart has strict policies for not giving chance to their
persons
 The International retail Stores: interested in the strategy acquired by Wal-Mart
 The Politicians: for the funding of the campaigns

Fig. Source: Slideshare.net


GOALS OF THE OPPONENTS

The opponents of the Wal-Mart included Labor unions, religious groups, environmentalist
groups, grassroots organizations, and community members all are having the claim that Wal-
Mart is unethical and unjust. In this task are discussed three main opponents of Wal-Mart and the
response of the Wal-Mart to them.

LABOR-UNION FUNDED GROUPS

Labor union has funded to make two organizations. Their main goal was to stop the Wal-Mart
through unions to expand internationally. Moreover, these work as anti-union for Wal-Mart. The
two organizations made as opposed to Wal-Mart were Wake-Up Wal-Mart and Wal-Mart watch.
The purpose of Wake-Up Wal-Mart was to change the focus of the company. The focus of the
company was profit while this opposing firm wanted to change focus towards people first. They
were also of the thought that Wal-Mart is not paying reasonable wages to its employees and
workers. Wal-Mart Watch was established to show Wal-Mart to behave ethically and socially to
have positive impact on the societies.

In response to these two organizations, Wal-Mart has created Working Families for itself. The
main goal of this group was to show the society about the good contributions of Wal-Mart for the
society.

GENDER DISCRIMINATION LAWSUIT

Wal-Mart is under the gender discrimination lawsuit. According to it the women has claim that
Wal-Mart takes time to give women with management positions. Moreover, it as also claimed
that the proportion of female worker at Wal-Mart is less than at any other similar store.

In response to this, Wal-Mart counter attacked the claims of gender discrimination. It shows with
proper documentation that there is gender equality at Wal-Mart. Moreover, women are also on
management positions and are working potentially.
GREENWALD’S FILM

A film was also released against Wal-Mart. This film has shown in it that how Wal-Mart is
ineffective. It also has incorporated some interviews which were showing that how Wal-Mart has
threaten their lives. These interviews included of a mother, a family and a city mayor.

In response to this film, Wal-Mart has counter attack on maker of the film and showed bad
reviews for the maker of the film.

ETHICS IN BLOCKING NEW ENTRY IN MARKET

It is no doubt possible that many firms will be hiring many consulting firms to stop the Wal-Mart
from entering in a new market. This is because they have some fear that Wal-Mart will not take
up their share as well. This is a very unethical practice to target someone with fraud. If the
opponents want to compete then make their strategies in such a way to bock automatically the
entry with their product and service quality, not with such internal schemes.

CONTINUING EXPANSION INTO INTERNATIONAL ARENA

It is unethical to change the other country‟s culture. A successful fir is the one which changes its
culture according to the host country‟s culture and still succeed and survive. If Wal-Mart enters
into the international arena, it will face many issues. There will be monopolies already build
there. There might be already low prices that Wal-Mart can face loss. Still it is good for Wal-
Mart to enter into a new market but with their proper strategy to cope up with the particular
barriers there. They have to standardize their products as well as local market strategies.
Similarly it will be good to buy the available things from local people to lessen their threat and
fear.

Major CSR initiatives:

1. Cooking Matters:
Cooking Matters is a program that teaches people how to
select low cost nutritious ingredients and cook them is
ways that provide best nourishment.
2. Will Allen:
We all need food to survive, but not everybody has access to healthy food. 50 Million Americans
struggle with hunger. Everything that is developed by Walmart on their land is passed on to the
small farmers.
3. A Hand to Grow: A Program for women entrepreneur

 A Hand To Grow is a program for small enterprises that aims to have their products
reach Walmart stores.

 The Program provides benefits that are 100% real. It is real because they don‟t just buy
their products – they also provide them with assistance once the products reach their store.

 This program is helping a lot of people launch their carrier. They are helping them
becoming self-sufficient.

4. Dress to Success:
Each year, millions of women struggle to find employment. This program helps disadvantaged
women successfully attain employment. The program provides women with a suit required for a
job interview, and make them feel empowered – instill within them the required confidence.

5. Free Breakfast:

80% of students at Port Towns Elementary School in Prince George's County, Maryland live at
or below the poverty line. Walmart provides these students with free breakfast.
6. Feeding America- Creating a hunger free America:
One in every six Americans struggle with hunger. Feeding America is a program by Walmart
which provides food to those struggling with hunger. The idea of the program revolves around
bringing the entire community to work on the problem together.
7. Energy Efficient:

All Walmart stores are 20% „more‟ energy efficient. They are powered by renewable energy.

8. Food Bank:

The Food Bank of New York is fighting to feed growing numbers of people in need.Walmart has
collaborated with them, and is helping them, with their mission.

Walmart and the Walmart Foundation have committed $2 Billion through 2015 to fight
hunger.
Their Focus:
 Hunger Relief And Nutrition:Fighting hunger and promoting nutrition is just one way we
strive to help people live better. In 2010, Walmart and the Walmart Foundation launched
“Fighting Hunger Together” – a $2 billion cash and in-kind commitment through 2015 to
help end hunger in America.

 Education:Education provides opportunities for a better life. Walmart Foundation funding


helps people gain access to an education that will help them achieve more than they may
have thought possible.

 Environmental Sustainability:The Walmart Foundation concentrates on helping people


understand how families and communities can live better by using fewer natural resources, as
well as growing healthy food in a more sustainable way.

 Women’s Economic Empowerment:Walmart's Global Women's Economic Empowerment


Initiative will improve the lives of women in the global supply chain and around the world.
Walmart is supporting this initiative with more the $100 million in grants.

 Workforce Development:Living better means greater access to opportunity. The Walmart


Foundation supports initiatives that provide opportunties through job training and placement,
career advice and greater access to resources that help people become self-sufficient.

 Special Interests: They have partneredwith severalorganizations that create opportunities


for the American heroes and help their communities around the world overcome natural
disasters.

CONCLUSION

In conclusion, Wal-Mart is becoming internationally strong and big company. It is dominating


the markets at an international level and becoming powerful. Its too low prices have pushed
many small merchants to close down their businesses. It has put profit its first priority, due to
which people are suffering whether they are workers or community. Governments should stop
the Wal-Mart from being opening the stores above a specific limit described by the government.

Though Arguably, Walmart has done more than any environmental group, politician, government
regulator or Silicon Valley clean tech firm to nudge the U.S. economy towards sustainability in the last
five years.
Walmart's 2011 Global Responsibility Report, makes clear that despite the recession and some recently
rough going for the company -- lately its stock has lagged the S&P500 -- Walmart is pushing ahead
towards its big goals: To generate no waste, to be 100 percent-powered by renewable energy and to sell
lots more products that sustain people and the environment.
Yet a closer look at the report demonstrates that there are limits to what any company, even one as vast as
Walmart, can do. Most of its environmental gains have come from doing what Walmart has always done
very well -- driving efficiency in its stores and supply chain. When sustainable initiatives cost more
money, as they sometimes do, progress has been halting.
Still, Walmart deserves at least two cheers, maybe two-and-half for its efforts, particularly in the current,
dispiriting political climate.

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