Running head: WALMART 1
Walmart
Liberty University BMAL 504
Running head: WALMART 2
Walmart
Name and Description
Wal-Mart is an American international retail corporation which functions as a chain
of discount department stores, grocery stores, and hypermarkets. Founded by Sam Walton in
1962 and incorporated Halloween 1969, Wal-Mart is headquartered in Bentonville, Arkansas.
According to Wal-Mart’s corporate website, as of January 31, 2018, Wal-Mart has 11,718 stores
and clubs under 63 banners in 28 countries, e-commerce websites in 11 different countries, as
well as operates under 59 different names. In the United States alone, Wal-Mart operates 3,561
Supercenters, 400 Discount Stores, 707 Neighborhood Markets, 99 Small Formats, and 597
Sam’s Club retail warehouses. The company operates under the name Wal-Mart in the United
States and Canada, as Wal-Mart de México y Centro America in Mexico and Central America, as
Asda in the United Kingdom, as the Seiyu Group in Japan, and as Best Price in India. It has
solely owned operations in Argentina, Chile, Brazil, and Canada. (Walmart, 2018)
Today, Wal-Mart employs more than 1.5 million associates in the United States.
Understanding the importance of promoting from within, 75% of the company’s store managers,
started as hourly associates. This creates not only a sense of pride but of belonging, helping
Walmart retain a large portion of its massive staff. With revenue of $485 billion in 2017 it is easy
to understand why Walmart is seen as a powerhouse and will continue to be for the foreseeable
future. (Walmart, 2018)
Organization Issues
Wal-Mart has been scrutinized for their questionable business practices which has caused
not only public image issues but distrust as well. Wal-Mart proclaims to be the “low price
leaders” but at the same time, they seem to be failing to exercise effective corporate social
accountability. Due to their aggressive “competitive strategy” to dominate any area in which
their stores reside, they have been accused of dominating to the point of destroying surrounding,
Running head: WALMART 3
local businesses (Hayden, Lee, McMahon, & Pereira, 2002). Wal-Mart has also become the
target of public criticism for the way they treat their employees. “There are thousands of lawsuits
filed against Wal-Mart for wage violations, anti-union stance, inadequate health care, and
exploitation of the workers” (Koca-Helvaci, 2015). Wal-Mart has also been accused of working
with suppliers in developing countries where labor rights violations are common. There are also
cases of Wal-Mart employees who are living below the poverty level. Wal-Mart needs to rebuild
the trust of the public by addressing their tarnished public image.
Change Process Description
Walmart is a world-renowned supermarket that is tremendously prosperous. According to
Emek Basker in his (2007) article, The Causes and Consequences of Wal-Mart’s Growth,
“Walmart is the largest retailer and the largest private employer in the United States.” Sadly,
success can never be found without the invitation for criticism. With issues in global expansion
and employee relations, critics are quick to point out the dangers that Walmart poses to an
economy and their improper care for employees. Basker goes on to state how, “Wal-Mart’s
growth has raised concerns about its economic impact on workers, communities, and
competitors” (Basker, 2007). According to Morillo, McNally and Block (2015), in their article,
The Real Walmart, they state that when you look, “through the lenses of economic growth and
progress, Walmart can be seen for the contributions it has made to society as it makes strides at
improving our standards of living.” Though critics may continue to rail against Walmart,
claiming that they cause unemployment, lower wages and greedy consumerism (Morillo Mcnally
& Block, 2015). It can be quickly pointed out that Walmart in fact creates wealth. This paper will
seek to identify the changes that Wal-Mart has gone through, looking at their growth as well as
their public image successes and failures. In spite of the controversy surrounding the Wal-Mart,
Running head: WALMART 4
he organization continues to be a leader in the market. Other retailers are likely to adopt similar
processes to remain competitive with Wal-Mart as it continues to grow.
The Origin
Walmart started out as a small store, with its founder Sam Walton only being in his
forties, it was a daring chance to start, what is now one of the largest corporations in the world.
Walmart started out in Arkansas, as a store that offered lower prices than its competitors
(Walmart.com) Walmart started as single store and grew over the decades to be a national chain,
and eventually a global chain.
Stores grew over time, and the way a store was laid out changed. Sam’s Club soon
became a new branch out of Walmart, offering bulk prices and member only customers. Walmart
stores, also became large enough to become Walmart Supercenters, offering both groceries and
general merchandise.
Sam Walton had a vision and had several beliefs that made that business successful.
Walton’s vision was to create an affordable store, where consumers could purchase items for less,
and maintain a standard of living. Todd Jick and Maury Peiperl state a vision is as follows:
Visions are big pictures. They are new terrains, descriptions of a time and place that are
happy and successful. In that sense they are idyllic, perhaps even ‘impossible dreams.’
But when the time and place are understandable people can and do respond…A vision
has two fundamental elements; provide a conceptual framework for understand the
organization’s purpose. The second important element is the emotional appeal (Jick and
Peiperl, 2011).
Running head: WALMART 5
Sam Walton had a vision, and over time that vision outgrew what he probably thought possible.
Walmart’s origin shows other entrepreneurs what is possible, if a vision and dream are followed.
Global Expansion
Walmart started out as a national brand in the mid twentieth century. It grew throughout
the United States and became a household name. After time went on, it became a juggernaut in
other markets as well. In the 1990s. Walmart has had many successes throughout the
international community, as well as failures. Walmart expanded to Mexico rapidly, and Mexico
now has about half the United States population of Walmart stores. Walmart is a company that
sticks to its principles in each country that it does business in. As a brand, Walmart uses the
concepts and visions that Sam Walton put in place, nearly 50 years before.
According to Pradeep Gopalakrishna, Ram Subramanian, and David Fleischmann (2016),
“Walmart rapidly expanded abroad throughout the 1990s, with new acquisitions and partnerships
every year. By 2014, success stores included Mexico, Canada, China, Brazil, the UK, and Sub-
Saharan Africa” (Gopalakrishna, Subramanian, and Fleischmann, 2016). Walmart also had other
stores in countries where it did not succeed, such as European markets. This was due to cultural
differences and standards of living. European countries may not have a low poverty rate, and
when there is one, it can be a much larger gap than that in the United States. Places like Germany
do not look kindly upon friendly smiling faces in the work place due to cultural differences.
Germany also has heavily populated cities where residents do not purchase their items in bulk
(Gopalakrishna, Subramanian, and Fleischmann, 2016).
Expansion into other nations is not always easy. As Walmart had troubles when moving
into South Africa. Walmart faced political battles due to trying to merge with South African
Running head: WALMART 6
companies. This would allow Walmart to place its name on the already existing infrastructure.
South Africa is a country with high unemployment rates, and it is divided politically by a small
white minority and a black majority. Bridget Kenny (2014) states, “Cambridge Food used labor
brokers extensively to staff its stores. Up to three-quarters of workers in the survey were
temporary employees…Most workers, work flexible shifts, over the course of a month; they
generally receive no additional compensation for working on public holidays and Sundays”
(Kenny, 2014, p. 174-175). Walmart is a much different business in America, where workers are
paid more for holidays, and the stores compensate employees based on a store’s performance.
Employee Relations
Walmart has a record number of associates within its hierarchy due to the size of its
corporation. Employees have many abilities to advance within a store from associates to store
managers. Walmart has a structure that has many middle level managers over each department.
This allows departments to be controlled from a small number of people. Walmart also offers
benefits and stocks to its employees as a publicly traded company. Walmart employees often
complain about how they are treated by store managers, who are driven by numbers and profit.
Employees often do not move up due to relations with higher management and personal
performance. Walmart does things that measure an associate personally. They evaluate the
morals authorization of each employee. Walmart also has positive attitude rating which can help
an employee bring a more enjoyable attitude to the workplace (Koca-Helvaci, 2015, p. 384).
Walmart does not always pay employees the highest of wages compared to other
department stores. In fact, Walmart workers have demanded higher pay for many years. News
agencies, such as CNN have run stories on workers demanding higher pay. For a multi-billion-
Running head: WALMART 7
dollar company, Walmart Associates do not make the same wages as other chain retail stores.
Alex Wood (2015) states, “mobilization of low-wage service workers maintained momentum
through 2013, with around 200 Walmart workers taking part in strikes alongside campaign of
civil disobedience leading to arrests” (Wood, 2015, p. 260). This is a small number of employees,
but when it spans several stores, it can lead to problems of morale and cohesiveness within an
institution.
Analysis
Walmart would be considered a mature organization not only due to the length of time in
which they have been successfully profitable but for their internationally large size as well. With
an organization as large and mature as Walmart there can be many obstacles to overcome
throughout the re-energizing process of implementing change. The established organizational
norms that had thus far helped accomplish past success could ultimately have the potential of
leading to complacency amongst staff and management. For change to successfully be
implemented, a change in employee mindset has to take place within all levels of the
organization (Jick & Peiperl, p. 39). With Walmart’s large scale success, there is a shared mindset
already established, which can pose as a liability in the renewal process. For this reason, when
addressing and changing the mindset of employees at various levels time should be permitted for
the new mindset to take root.
Walmart has faced extensive scrutiny for the treatment of their staff, resulting in various
lawsuits. Although the company has been successful in creating noticeable profit, they have also
documented noticeable turnover rates of non-management employees. In discussing retail
Running head: WALMART 8
turnover, Pearson states that it cost nearly 16% of someone’s salary when replacing an employee
making less than $30,000 a year. The average employee working retail makes just above
$21,000 a year, meaning 16% of their annual salary would equate to $3,360. In 2015, Walmart’s
job openings had increased 26% (in comparison to the previous year) with the immense amount
of 530,477 open positions (Peterson, 2015). These staggering statistics show the loss Walmart
faces, and could potentially avoid, when examining turnover rates and difficulties in retaining
employees. Employee satisfaction would decrease turnover rates, therefore directly impacting,
and increasing, Walmart’s annual profits.
In order to obtain employee satisfaction, Walmart must first address their low pay-scale
for non-management positions such as retail. The average retail hourly rate in 2015 was $10.29
per hour, although in that same year Walmart had just increased their starting pay to a mere $9.00
per hour. There is a positive correlation between higher employee satisfaction and retention with
higher starting salaries. For example, in 2015, Costco was starting new employees at $11.50 an
hour, a dollar and fifty cents higher than Walmart. As a result, Costco maintained a low turnover
rate for employees at 6%. Women have vocalized concern regarding low payment as well.
According to the Alternative Daily, in 2013 Walmart paid female employees approximately $1.16
less per hour less than male employees (Cooke, 2017).
Dan Ackman claims that in 2013 Walmart employed 1.2 million U.S. employees, two
thirds of which are women. Disregarding the disproportionate pay, women have filed numerous
law suits against Walmart due to incidents of gender discrimination (Ackman, 2013). Women,
nationwide, have made allegations including that the mega-organization has terminated
employment without reason during pregnancy, or that Walmart had provided limited access to
promotions for women.
Running head: WALMART 9
Walmart has also faced scrutiny in terms of public image for a variety of reasons. One
common argument against Walmart is the concept that the mega-organization takes jobs and
money from the community. Walmart has a history of driving out smaller, “mom-and-pop” stores
due to their convenience and low prices. As smaller stores are shut down, profits made from
retail no longer go to local business owners. According to Sarah Cooke, it’s estimated that over
50% of Walmart’s supplies are manufactured overseas in countries with more relaxed labor laws,
resulting in dangerous or hazardous work environments and child labor. This outsourcing when
manufacturing contributes to the low cost and affordability of Walmart products, but many
activists and humanitarians around the world have started to vocalize concerns pertaining to the
manufacturing of such products overseas. For various reasons, Walmart has been portrayed in
negative light impacting their public image. With negative publicity can come negative impacts
such as a loss in sales or poor employee retention. In order to maximize profits and sales
Walmart must begin to restore their public image and employee satisfaction.
Recommendations:
In order to address employee satisfaction and retention Walmart various aspects of the
mindset and overall infrastructure should be addressed. Elena Bajic identifies six practices to
retain good employees, the first of which is communicate, communicate, communicate (Bajic,
2013). Communication is most effective when treated as if it’s a two-way street. It’s important
for higher management to openly communicate concerns, values, and data with employees as
well as listen to employees as they communicate their individual concerns and values as well.
Dennis Hightower, a former vice president of Disney Consumer Products (DCP) for Europe was
particularly successful running the organization due to his open communication with staff (Jick
& Peiperl, p. 410). Prior to being assigned vice president of DCP Hightower interviewed all
Running head: WALMART 10
country managers and heard from them, first hand, what kind of a leader they would be receptive
to, changes they would like to see, and concerns within the organizations. Upon being hired,
Hightower was not only transparent with staff regarding new initiatives and expectations, but
also took into consideration the prior conversations and concerns of country managers.
In order to retain employees, Walmart should consider a significant pay increase for
employees, on all levels, to ensure satisfaction. It may seem confusing at first, the idea of paying
employees more money to increase profit, but Kimberly Weisul argues that paying employees
more will, in fact increase productivity and therefore profits (Weisul, 2018). It’s advised for
organizations to invest in their employees in two particular ways: the first being their pay, the
second being cross-training. Both of these employee investments have resulted in increased
employee productivity, which can ultimately lead to savings in the long-run.
In order to repair Walmart’s public image, initiative should be taken by the company to
not only appear, but become more socially conscious. Companies that are deeply engage with
their communities and giving back take a much more flattering light than those that appear to
discriminate or being socially unconscious. Capital One for example requires employees to
volunteer. Their website proudly displays various nonprofits and organizations around the
country, presenting various ways to get involved in your community. Toms, the ever popular
show brand, advertises that for every pair of shoes bought, another pair will be given to someone
in need. By giving back, in the form of shoes, Toms is able to not only still make considerable
profit, but also show the world the sense of compassion they’ve deeply rooted into their company
vision. Although Walmart has the Walmart Foundation that gives back, this is rarely what comes
to mind when one thinks of Walmart. Similar to the need to hear specific concerns of staff, when
Running head: WALMART 11
giving back, an organization should be sure to hear specific concerns of the community and try to
address those needs.
Walmart has proven, for decades, to be successful in marketing, manufacturing at
affordable prices and turning profit. These are not necessarily the areas that should be addressed
or changed drastically when striving to make Walmart even more successful. Walmart has room
for improvement in employee satisfaction and their reputation as a socially conscious
organization. Should Walmart increase employee satisfaction their high turn-over rate is likely to
drop therefore saving money. Should employees be cross-trained they will become more
efficient, another means of saving money for the organization. Lastly, should Walmart become
more socially conscious and address concerns such as gender discrimination, oversea
manufacturing and give back to the communities they’ve began monopolizing sales can increase
as they gain an even larger population of customers offering support for their store.
Running head: WALMART 12
References
(2018). Our History. Retrieved from https://corporate.walmart.com/our-story/our-history.
Ackman, D. (2013, June 06). Wal-Mart And Sex Discrimination By The Numbers. Retrieved
March 14, 2018, from
https://www.forbes.com/2004/06/23/cx_da_0623topnews.html#72ac316027b4
Bajic, E. (2013, July 16). The 6 Steps For Retaining Good Employees. Retrieved March 14,
2018, from https://www.forbes.com/sites/elenabajic/2013/07/15/the-6-steps-for-retaining-
good-employees/#1e9ce4ce721f
Basker, E. (2007). The causes and consequences of wal-mart's growth. The Journal of Economic
Perspectives, 21(3), 5-198.
doi:http://dx.doi.org.ezproxy.liberty.edu/10.1257/jep.21.3.177
Cooke, S. (2017, January 19). 8 Reasons To Stop Shopping At Walmart. Retrieved March 14,
2018, from https://www.thealternativedaily.com/reasons-to-stop-shopping-at-walmart/
Gopalakrishna, P., Subramanian, R., and Fleischmann, D. (2016). Walmart in India. Journal of
the International Academy for Case Studies, 22(3), 99-109.
Jick, T., Peiperl, M. (2011). Managing change: cases and concepts. New York, New York:
McGraw Hill
Kenny, B. (2014). Walmart in South Africa: Precarious labor and retail expansion. International
Labor and Working Class History, 86, 173-177.
Running head: WALMART 13
Koca-Helvaci, Z. C. (2015). Walmart and its employee relations: organizational stance-taking
and legitimacy. On The Horizon, 23(4), 374-386.
Morillo, J., McNally, C., & Block, W. E. (2015). The real Walmart. Business and Society Review,
120(3), 385-408. DOI: 10.1111/basr.12060
Pearson, B. (2017, January 27). Wal-Mart's employment deployment and 6 ways to curb retail
turnover. Retrieved March 14, 2018, from
https://www.forbes.com/sites/bryanpearson/2017/01/24/wal-marts-employment-
deployment-and-6-ways-to-curb-retail-turnover/#56c392041008
Peterson, H. (2015, October 23). Walmart, Target, and TJ Maxx are facing a worker crisis.
Retrieved March 14, 2018, from http://www.businessinsider.com/walmart-target-and-tj-
maxx-are-facing-a-worker-crisis-2015-10
Walmart. (2018). 2017 Walmart annual report. Retrieved from
http://s2.q4cdn.com/056532643/files/doc_financials/2017/Annual/WMT_2017_AR-
(1).pdf
Weisul, K. (n.d.). How Paying Employees More Can Make You More Profitable. Retrieved
March 14, 2018, from https://www.inc.com/kimberly-weisul/four-strategies-to-raise-
profits-by-paying-employees-more.html
Wood, A. J. (2015). Networks of injustice and worker mobilization at Walmart. Industrial
Running head: WALMART 14
Relations Journal, 46(4), 259-374.
Zeynep, C. K. (2015) Walmart and its employee relations: Organizational stance-taking and
legitimacy. On the Horizon, 23(4), p.374-386.
