Assignment
Walmart's reach is vast. Fortune magazine named it the "most admired company in America," and the Financial Times included it on its "Most Respected in the World" list. The retail giant has received various honors and accolades, such as being selected as among the "Top 50 Companies for Executive Women" by the National Association for Female Executives and "Top 50 Companies for African American MBAs" by Black MBAs Magazine. As the world's largest retailer, Walmart operates more than 8,400 retail units in 15 countries around the world, works with more than 100,000 suppliers, and employs more than 2 million people across the globe. Customer visits total more than 200 million each week, and the company posted sales of $405 billion for fiscal year 2010. These statistics add up to a company capable of exerting massive pressure on its suppliers and employees and capable of making substantial differences in the lives of its customers. With this power comes choice. Walmart could offer low prices and eek out every penny of profits for its shareholders without regard to factors like employee working conditions or environmental impact. In fact, this was Walmart's approach until it came under fire from critics of the company's sourcing policies, employee wages and benefits, adverse effects on small businesses, and contributions to urban sprawl. Many communities took legal steps to keep Walmart and other big-box retailers out of town. Local governments claimed that Walmart stores increased traffic, drove local retailers out of business, transformed middle-class retail jobs into lower-paying jobs that lacked health care and other benefits, shrunk the tax base, and increased welfare. Some economists estimate that Walmart business practices annually caused a $4.7 billion loss of wages for workers in the retail sector. With its reputation in jeopardy, Walmart faced a quandary: continue with existing practices, or use its position to effect meaningful changes in retail practices, beginning with its own business. On the surface, the latter approach appears to drive up costs and reduce profits, since organic products or those produced sustainably have traditionally carried a higher price tag. Walmart would then face tremendous difficulty in fulfilling both aspects of its mission, to help people live better by saving them money, since improving living conditions would result in price hikes, but low prices would mean less responsible business practices. However, Walmart CEO Mike Duke views offering low prices and responsibly produced products as a both/ and concept, not an either/or one. He launched an acrossthe-board sustainability effort known as "Sustainability 360," which is based on the belief that a companywide commitment to economic, environmental, and social sustainability can help Walmart uncover and remedy unsustainable practices. These efforts will save the company-and the consumer-money by reducing waste, increasing productivity, improving communities, and inspiring innovation. Only by saving customers money, decreasing its environmental footprint, and bettering working conditions can the company fulfill its mission of saving people money so that they can live better. SAVING MONEY AND IMPROVING LIVES A recessionary economy with high unemployment means Walmart's traditional customers need to make their dollars stretch even further when they visit the store. It also means more customers may shop Walmart's shelves as they try to make a diminished household income cover all of life's necessities. According to Walmart's 2010 sustainability report, ensuring that these individuals receive value, convenience, and quality for their dollar is integral to the company's mission, but these goals cannot be achieved at the expense of the environment or the lives of workers throughout the supply chain. Walmart is working internally and with partners and stakeholders to minimize waste, which saves money. The company is also working to improve economic conditions for individuals, families, and communities by requiring that partners adhere to the labor and environmental regulations of their area, creating new jobs, and generating tax revenue that supports key priorities like education and transportation projects. The retail giant claims to provide new markets for small businesses-including local farmers-and to support small and medium-size suppliers to drive production chains. Initiatives helping shoppers maximize their earnings go beyond low prices on prescriptions and consumer goods; Walmart's Financial Services division provides low-cost options such as check cashing, money orders, money transfers, bill payment, and prepaid credit cards. In addition, Walmart makes charitable contributions and in-kind donations to organizations in the United States and abroad, and its employees, known as associates, volunteer at charitable organizations within their communities. These programs, Walmart believes, contribute to its ability to do well as a business and as a neighbor. DECREASING ENVIRONMENTAL IMPACT In 2005, Walmart set three core goals for environmental sustainability: to be supplied 100 percent by renewable energy, to create zero waste, and to sell products that sustain resources and the environment. Since then, the company has defined baselines for its effort, identified metrics to help measure progress toward key initiatives and goals, and implemented new programs both in the United States and abroad. Initiatives span the supply chain and include increasing fleet efficiency, improving efficiency of and lowering greenhouse gas emissions from existing stores, retrofitting refrigerated display cases in U.S. stores with energy-saving LED lighting, minimizing waste due to overstocking of perishables, and reducing the amount of waste going to landfills through recycling efforts or packaging changes. In its annual sustainability report, Walmart updates stakeholders on improvements, such as a 16.1 percent reduction in plastic bag waste over a two-year period. Other waste reduction programs have directed excess food to food banks throughout the United States; increased recycling of aluminum, plastic, paper, and cardboard; and increased use of packaging that has been created using less energy and fewer natural resources and/ or that has been transported using less fuel. SELLING SUSTAINABLE PRODUCTS Selling sustainable products at competitive prices helps consumers reduce their own energy consumption, thus saving them money while they help protect the environment. For example, Walmart stocks compact fluorescent (CFL) lightbulbs and has sold more than 350 million of these bulbs in the United States alone. Consumers using these bulbs will save $13 billion over the life of the bulbs. Energy-efficient air conditioners and flat-screen televisions will likewise help consumers lower their electricity costs while ensuring that televisions, personal computers, MP3 players, video games, and cameras are compliant with the Reduction of Hazardous Substances (RoHS) directive. Walmart's Sam's Club was the first mass-market retailer in the United States to offer Fair Trade Certified bananas. These bananas support sustainable communities, since profits return to the community in the form of funding for education and development projects. They also help Walmart's environmental sustainability efforts by reducing the amount of herbicides needed to ensure a healthy crop. In its apparel line, Walmart has developed best-practices guidelines and a toolkit to help suppliers in cut-and-sew factories and dye houses reduce waste scrap and energy use, use water more efficiently, and conform to acceptable social and ethical practices. Driving wastes out of the supply chain makes business more efficient, helping keep prices down. In 2009, Walmart announced discussions of the development of a Sustainable Product Index to rate products on the basis of their sustainability. The ratings, which will be based on use of energy and natural resources, production efficiency, and contributions to individuals and community, will appear on product labels and are intended to evolve into a tool that will help improve sustainable practices throughout the supply chain and empower customers to make environmentally friendly purchasing decisions. Data collection also helps Walmart identify suppliers whose practices fall below sustainability standards so that these suppliers can receive additional training and support. Walmart expects the first stage of the project-collecting data on the life cycle of products from raw-material use to disposal-to be completed within five years. MAINTAINING A SUSTAINABLE WORKFORCE A sustainable company requires streamlined business practices and innovative technology, and it also requires a healthy and motivated workforce. Sickness, injury, lack of motivation, stress, family concerns, and minimal education can all affect a company's performance, so Walmart has committed to social sustainability along with its environmental sustainability goals. Under this initiative, Walmart has set goals and requirements for its suppliers. These parameters cover adherence to local social and environmental regulations and ethical standards, quality and safety of manufactured products, and energy use. Within different geographic areas of the world, Walmart has identified specific challenges, ranging from excessive overtime and unsafe work conditions to discrimination, poor production planning, and undeclared subcontracting. Regular auditing helps identify suppliers in need of further investigation or support. Efforts aren't confined to suppliers: Walmart is reviewing its buying practices to see how they affect factory conditions and is ensuring that its own workforce is fairly and equitably compensated, that women and minorities have opportunities to progress to management positions, and that health care coverage is broadly available. Providing this combination of pay, benefits, and opportunities helps reduce turnover, keep staff healthy and at work, and build loyalty to the company. The company further ensures a strong future workforce through contributions to workforce development programs, community efforts to reduce poverty, and improved access to education or clean, safe drinking water and food.
DISCUSSION QUESTIONS
1. Is Walmart good for society? Would society be better off with or without Walmart?
2. Walmart says that it creates new markets for smalland medium-size businesses and that it supports growth and innovation for these businesses. For some of these suppliers, Walmart is their primary customer and thus the business owners have little choice about adopting Walmart's standards. Do you think this is fair? Do you think Walmart's powerful position helps these business owners or hinders them?
3. Walmart's sustainability program addresses each of the criticisms leveled against it. If a company is forced to launch an initiative to prevent falling sales or public relations problems, do you think the company is fully committed to those efforts? How could you tell if the company was making progress toward its stated goal?
4. Walmart's Sustainable Product Index is intended to provide consumers with a ranking of a product's sustainability across its life cycle. Would this ranking influence your buying decisions? Why or why not?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.