WAL-MART INC.

: ANALYSIS OF “WORST COMPANY” 1

Wal-Mart Inc.: Analysis of “Worst Company”

Shameka Lemon

Linda Mae Ashar

BUS310: Business Theory

American Public University

6/14/20
WAL-MART INC.: ANALYSIS OF “WORST COMPANY” 2

Introduction

Wal-Mart Inc. operates in the wholesale and retail business. Its domestic environment is

the United States of America. In its USA segment, it operates as a seller of consumer products,

specifically under different brands, namely: Wal-Mart Neighborhood, Wal-Mart.com, and other

e-commerce outlets. It was founded in 1945 by Walton James, and since, it has set up its

headquarters in Bentonville, Arizona (Mitchell, 2019). The company has faced much criticism

for its inappropriate business practices such as unfair competition and employee abuse and has

continuously brushed shoulders with the Justice Department and FTC (Federal Trade

Commission) for infringement of Antitrust laws, among others.

Domestic Government Regulations in the Retail Industry

The wholesale and retail industry has several sub-sectors, from clothing to groceries to

furniture and beyond. Each of the sectors faces its regulatory challenges, although all

wholesalers and retailers are affected by state and federal labor legislation such as overtime pay

and minimum wage laws (Ajami, Cool, Goddard & Khambata, 2006). Just as in all different

industries, federal regulation ass legal liabilities and compliance costs to the wholesale and retail

sectors. The governmental entities that wholesalers and retailers deal with are the FTC,

Department of Labors.

Nonetheless, Homeland Security plays a massive role in cyber security and web content. 

Taxes are not majorly considered quite a regulation, although it is held that retailers and

wholesalers submit the highest tax rates. This is because the industry is associated with quite

dispersed lobbying interests and minimal tax loopholes (Connor, 2019). Moreover, most brick

and mortar retailers pay state sales taxes that web-based retailers rarely pay. This is still

enormous merit to corporations such as Amazon and a costly feat to Wal-Mart as a whole.
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However, there have been significant legislative efforts to mandate digital businesses to file sales

returns in recent times. 

Brick and mortar companies in the wholesale and retail industry have had to deal with the

ever-growing array of contract restrictions and labor relation laws with workers. These laws

stipulate how much in wages employees should be paid and for how long they should work. The

DOL, however, imposes certification processes for labor and eases processes of disgruntled

employees, bringing their employers to court (Sparling, 1918). The FTC has jurisdiction over

inter-business and consumer protection. The FTC is the dominant player in consumer-

retailer/wholesaler relationships, while the DOL has power in enforcing employee-retailer

relationships. 

Domestic Government Regulations and How They Affect Wal-Mart

Wal-Mart is one of the retailer/wholesaler businesses that have attracted much criticism

in the USA from both consumers and regulators. Wal-Mart is experiencing uncertainties with

changes in existing/current labor, taxation, and other laws ("Document," 2018). This comes in

the form of tax rates, inclusive of the enactment, adoption, and interpretation of regulations and

rules. Moreover, the creation or adoption or modification of existent federal initiatives,

programs, and policies in the market in which the company operates with respect to the policies,

widely affects Wal-Mart's operations. 

Wal-Mart is also faced with possibilities of imposing taxes on imported merchandise,

new trade restrictions, new tariffs, and changes in the latter rates. The timing of tax refunds

(federal) is also a hurdle. For almost four decades, the DOJ and FTC have pestered Wal-Mart

with opposition due to their market consolidation strategies, basing this on Antitrust laws of

unfair competition. Wal-Mart has long been known for steamrolling into new markets and
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competing unfairly against the already existent small retailers (Mitchell, 2019). Statistically,

Wal-Mart grasps one in every four USD spent by USA citizens on groceries, which makes it

more than the share market of the next five biggest retailer chains altogether. 

Richard Deming's Business Theory

Deming Richard's theory of business started in Japan and practically revolutionized that

country's economy. Before Deming, the economy was poor quality, copycat, and low cost.

Thanks to Deming, low-quality manufacturing was transformed into high-quality, innovative

merchandise such as Honda, Sony, and Toyota. Deming's business theories, such as the creation

of quality circles, statistical quality sampling, continuous improvement, and self-managed teams,

revolutionized contemporary business in ways unfathomable to many (Ajami et al., 2006). The

General Electric Six Sigma program is one such product of Deming's work. That said, it is

undoubted that most business theorists had a vision for future businesses, both in practice and in

theory. 

Overcoming Wal-Mart's Business Barriers

As it pertains to Deming's theory of stellar management, Wal-Mart must inject profound

knowledge into its operations. First, the retailer/wholesaler must appreciate itself, consider its

knowhow about its industry of operation, understand and practice the theory of knowhow, and

use psychological knowledge to its advantage (Gitman et al., 2018). This applies to both the

workforce as well as the managerial team that runs most of the critical processes towards

organizational performance. Wal-Mart is the biggest corporation in the world, so this must not be

a problem. A better leadership culture, quality improvement, and managerial stewardship would

be the ultimate key to Wal-Mart's success. 

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References

Connor, T. (2019). Understanding how work is done — Deming’s theory of profound

knowledge. Retrieved 14 June 2020, from https://medium.com/10x-curiosity/system-of-

profound-knowledge-ce8cd368ca62

Mitchell, S. (2019). Report: Walmart’s Monopolization of Local Grocery Markets - Institute for

Local Self-Reliance. Retrieved 14 June 2020, from https://ilsr.org/walmarts-

monopolization-of-local-grocery-markets/

Ajami, R., Cool, K., Goddard, G., & Khambata, D. (2006). International business. Armonk, NY:

Sharpe.

Gitman, L., McDaniel, C., Shah, A., Reece, M., Koffel, L., Talsma, B., & Hyatt, J. (2018).

Introduction to Business. OpenStax.

Sparling, S. (1918). Introduction to business organization. The Macmillan company : Macmillan

& co., ltd., 1918.

Document. (2018). Retrieved 14 June 2020, from

https://www.sec.gov/Archives/edgar/data/104169/000010416918000028/wmtform10-

kx1312018.htm