TABLE OF CONTENTS

1
 Wal-Mart a snapshot 04

 Introduction 06
 What made Wal-Mart so big and powerful?
09
 Wal-Mart’s Publics
12
 Corporate Affairs 13
 The Controversies
18
o Local Communities
o Suppliers
o Employees
 Public Relations 39
o Working Families for Wal-Mart Campaign
 Reactions by Groups Critical of Wal-Mart
43
o Wake-up Wal-Mart
o Wal-Mart Watch
 Actions Taken By Wal-Mart 50
 Problems associated with Wal-Mart’s PR 58
 Recommendations
61
 Conclusion 63
 Bibliography 65

2
 ACKNOWLEDGEMENT

WE WOULD LIKE TO EXTEND A VOTE OF

THANKS TO OUR TEACHER, MRS ANUJA
MATHUR, WHO GAVE US THE OPPORTUNITY TO
WORK ON THIS PROJECT AND WHOSE CLASS
ROOM TEACHINGS WE HAVE INCORPORATED IN
OUR PROJECT. HER GUIDANCE PAVED THE WAY
FOR THE COMPLETION OF OUR PROJECT TITLED
“WAL-MART AND ITS PUBLIC RELATIONS ”.

WE WERE GLAD TO WORK ON THIS PROJECT

UNDER HER GUIDANCE AS THROUGH THIS WE
HAVE BEEN ABLE TO UNDERSTAND THE
ESSENTIAL ELEMENTS OF PUBLIC RELATIONS,
ITS SIGNIFICANCE AND ITS PRACTICALITY IN
TODAY’S CORPORATE WORLD. HER GUIDANCE
AND SUPPORT HAS HELPED US TO COMPLETE
THE PROJECT.

3
Type : Discount department store/Public (NYSE: WMT)

Founded: Rogers, Arkansas, USA (1962)

Headquarters: Bentonville, Arkansas, USA

Key people: Sam Walton (1918–1992), Founder

H. Lee Scott, CEO
S. Robson Walton, Chairman
Tom Schowe, CFO

Industry : Retail Products Discount stores, grocery stores, and

hypermarkets Optical, Pharmacy, Portrait Studio

Revenue : US$351.1 billion (2007)

Net income : US$11.3 billion (2007)

Employees : 9 million (2007)

Slogan : Save Money, Live Better.

Always Low Prices. Always.

Save More. Smile More. (U.S.)

WE SELL FOR LESS every day! (Canada)

EVERYDAY LOW PRICES

Website : www.walmart.com

4
 A Brief Wal-Mart Timeline
• 1950: Walton opens first five-and-dime
• 1962: Walton opens first Wal-Mart in Rogers, Ark.
• 1970: Wal-Mart has IPO
• 1979: Annual sales top $1 billion
• 1985: Wal-Mart has about 880 stores and $8.5
billion in revenue, smaller than competitors Kmart
and Sears
• 1990: Wal-Mart surpasses Kmart in size
• 1991: Wal-Mart opens first international store in
Mexico City
• 1992: Wal-Mart surpasses Sears in size; Sam
Walton dies
• 1994: Wal-Mart surpasses in size Kmart and Sears
combined

5
 WALMART - INTRODUCTION
WALMART is an American public corporation, currently one of
the world's largest corporations (by revenues) according to the
2007 Fortune 500. It was founded by Sam Walton in 1962,
incorporated on October 31, 1969, and listed on the New York
Stock Exchange in 1972. It is the largest private employer in
the world and world's fourth largest utility or commercial
employer, only trailing the People's Liberation Army of China,
the National Health Service of the United Kingdom and the
Indian Railways. Wal-Mart is the largest grocery retailer in the
United States, with an estimated 20% of the retail grocery and
consumables business, and the largest toy seller in the U.S.,
with an estimated 45% of the retail toy business, having
surpassed Toys "R" Us in the late 1990s.

Wal-Mart operates in Mexico as Walmex, in the United Kingdom

as ASDA, and in Japan as The Seiyu Co., Ltd. Wholly owned
operations are located in Argentina, Brazil, Canada, Puerto
Rico, and the UK. Wal-Mart's investments outside North
America have produced mixed results. In 2006, Wal-Mart sold
its retail operations in South Korea and Germany due to
sustained losses and a highly competitive market.

Wal-Mart has been the target of criticism from some

community groups, women's rights groups, grassroots
organizations, and labor unions. Specific criticisms include the
company's extensive foreign product sourcing, low rates of
employee health insurance, resistance to union representation,
and alleged sexism, among other things.

Wal-Mart is more than just the world's largest retailer. It is an

economic force, a cultural phenomenon and a lightning rod for
controversy. It all started with a simple philosophy from
founder Sam Walton: Offer shoppers lower prices than they get
anywhere else. That basic strategy has shaped Wal-Mart's
culture and driven the company's growth.

6
 Wal-Mart Supercenter

Now that Wal-Mart is so huge, it has unprecedented power to

shape labor markets globally and change the way entire
industries operate.

Sam Walton opened his first five-and-dime in 1950. His vision

was to keep prices as low as possible. Even if his margins
weren't as fat as competitors, he figured he could make up for
that in volume. He was right.

In the early 1960s, Walton opened his first Wal-Mart in Rogers,

Arkansas. The company continued to grow, going public in
1970 and adding more stores every year. In 1990, Wal-Mart
surpassed key rival Kmart in size. Two years later, it surpassed
Sears.

Walton continued to drive an old pickup truck and share

budget-hotel rooms with colleagues on business trips, even
after Wal-Mart made him very rich. He demanded that his
employees also keep expenses to a bare minimum -- a
mentality that is still at the heart of Wal-Mart culture more than
a decade after Walton's death. The company has continued to
grow rapidly after his death in 1992 and now operates four

7
retail divisions -- Wal-Mart Supercenters, Wal-Mart discount
stores, Neighborhood Market stores and Sam's Club
warehouses.

A Wal-Mart Neighborhood Market

The facts below about Wal-Mart give an idea of how big Wal-
Mart is :

Wal-Mart employs 1.6 million people. To give an idea of just

how many people that is, Idaho, the 39th most populous state,
is home to 1.4 million people.

Wal-Mart had sales of $312.43 billion in its most recent fiscal

year, which ended January 31, 2006. By comparison, the
second-largest retailer in the country, Home Depot, posted
sales of $81.5 billion.

Wal-Mart has 6,200 retail outlets. In contrast, Home Depot has

2,040.

8
What made Wal-Mart so big,
powerful and successful?
The key reasons that Wal-Mart has been able to keep its prices
low are

1. Its sophisticated and cutting-edge technology

2. A frugal corporate culture of watching each expense and

3. A push to make suppliers sell merchandise at cheaper and

cheaper prices.

1. TECHNOLOGY : Wal-Mart pushed the retail industry to

establish the universal bar code, which forced manufacturers to
adopt common labeling. The bar allowed retailers to generate
all kinds of information -- creating a subtle shift of power from
manufacturers to retailers. Wal-Mart became especially good at
exploiting the information behind the bar code and is
considered a pioneer in developing sophisticated technology to
track its inventory and cut the fat out of its supply chain.

A universal bar code

9
Wal-Mart became the first major retailer to demand
manufacturers use radio frequency identification technology
(RFID). The technology uses radio frequencies to transmit data
stored on small tags attached to pallets or individual products.
RFID tags hold significantly more data than bar codes. During
the first eight months of 2005, Wal-Mart experienced a 16
percent drop in out-of-stock merchandise
at its RFID-equipped stores, according to
a University of Arkansas study (as
reported in Fortune Small Business
magazine).
2. THE FRUGAL CULTURE established
by Walton, also plays into Wal-Mart's
success. The company has been
criticized for the relatively meager wages
and health care plans that it offers to
rank-and-file employees. It has also been
accused of demanding that hourly
workers put in overtime without pay.
Store managers often work more than 70
hours per week. They are expected to IWal-Mart's headquarters in
Bentonville, AR
pinch pennies wherever they can, even
on things like the heating and cooling of the stores. In the
winter, stores are kept at 70 degrees Fahrenheit, and in the
summer, they stay at 73.
This culture is also present at the company's headquarters.
Wal-Mart is headquartered in Bentonville, Arkansas, instead of
an expensive city like New York. The building is drab and dull.
One can’t catch executives in limousines and cant even see
them dragging into work at 9:30 a.m. Executives fly coach and
often share hotel rooms with colleagues. They work long hours,
typically arriving at work before 6:30 a.m. and working half-
days on Saturdays.

10
3. THE CENTRAL GOAL OF WALMART HAS BEEN TO KEEP
PRICES LOW: The company has been very successful at this.
Experts estimate that Wal-Mart saves shoppers at least 15
percent on a typical cart of groceries. Everything -- including
the technology and corporate culture -- feeds into that ultimate
goal of delivering the lowest prices possible. Wal-Mart also
pushes its suppliers, some say relentlessly, to cut prices.

In a 2003 Los Angeles Times article (part of a Pulitzer Prize-

winning series about Wal-Mart), tells of a Wal-Mart buyer
named Celia Clancy, who was in charge of clothing and
demanded that each supplier either lower the price or increase
the quality every year on every item. This philosophy is
known as "plus one."

11
 WALMART - PUBLICS
 CUSTOMERS
 INVESTORS
 COMPETITORS
 GOVERNMENT
 EMPLOYEES AND LABOR UNIONS
 SUPPLIERS AND DEALERS
 LOCAL RETAILERS AND SMALL COMPANIES IN THE
AREA COMPRISING OF THE LOCAL COMMUNITY
 RELIGIOUS ORGANIZATIONS
 ENVIRONMENTAL GROUPS

12
 CORPORATE AFFAIRS
Wal-Mart's business model is based on selling a wide variety of
general merchandise and marketing, at "always low prices."
The company refers to its employees as "associates." All Wal-
Mart stores in the US and Canada also have designated
"greeters", whose general role is to welcome shoppers at the
store entrance, and play a role in loss prevention.

Unlike many other retailers, Wal-Mart does not charge a

slotting fee to suppliers for their products to appear in the
store. Alternatively, they focus on selling more popular
products and often pressure store managers to drop unpopular
products in favor of more popular ones, as well as
manufacturers to supply more popular products. More than
70% of the goods sold in Wal-Mart are manufactured in China.

On September 14, 2006, the company announced that it would

be phasing out its layaway program, citing declining use and
increased costs. Layaway was offered until November 19,
2006, with merchandise pickup by December 8, 2006. They
plan to focus on alternative payment options, such as
increased use of 6 and 12 month zero interest financing. The
layaway location in most stores is now used for Wal-Mart's Site-
To-Store feature.

Financial
In 2006, Wal-Mart ranked at number 67 of the 100 largest
corporations in terms of profitability (profits divided by total
revenue), behind retailers Home Depot, Dell and Target, and
ahead of Costco and Kroger. For the fiscal year ending January
31, 2006, Wal-Mart reported net income of $12.178 billion on
$344.992 billion of sales revenue (3.5% profit margin). For the
fiscal year ending January 31, 2006, Wal-Mart's international
operations accounted for approximately 20.1% of total sales.
As of September 6, 2007, net sales for the 30-week period

13
ending August 31, 2007 was $207.487 billion, up 8.5% from the
previous year's results.

Governance
Wal-Mart is governed by a thirteen-member Board of Directors,
which is elected annually by shareholders. S. Robson Walton,
the eldest son of founder Sam Walton, served as the Chairman
of the Board, and H. Lee Scott, the Chief Executive Officer,
served on the board as well. Other members of the board
include Aída Álvarez, James Breyer, M. Michele Burns, James I.
Cash, Jr., Douglas N. Daft, David D. Glass, Roland A. Hernandez,
Jack C. Shewmaker, Jim C. Walton, Christopher J. Williams, and
Linda S. Wolf.

Notable former members of the board include Hillary Clinton

(1985-1992) and Tom Coughlin (2003-2004), who also served
as Vice Chairman. Clinton left the board prior to the 1992 U.S.
Presidential Election, and Coughlin left the board in December,
2005 after pleading guilty to wire fraud and tax evasion for
stealing hundreds of thousands of dollars from Wal-Mart.

Competition
In North America, Wal-Mart's primary competition includes
department stores like Kmart, Target, ShopKo, Meijer, or
Canada's Zellers, Winners, or Giant Tiger. Wal-Mart's move into
the grocery business in the late 1990s has also positioned it
against major supermarket chains in both the United States
and Canada. Several smaller retailers, primarily dollar stores,
such as Family Dollar and Dollar General, have been able to
find a small niche market and compete successfully against
Wal-Mart for home consumer sales. In 2004, Wal-Mart
responded by testing their own dollar store concept, a
subsection of some stores known as "Pennies-n-Cents."

Wal-Mart has faced competition in foreign markets. For

example, in Germany, it had captured just 2% of German food

14
sales following its entry into the market in 1997 and had
remained "a secondary player" compared to competitor Aldi
which boasts 19% share of the German market. In July 2006,
Wal-Mart announced its withdrawal from Germany. Its stores
are to be sold to German company METRO AG. In May 2006,
Wal-Mart withdrew from the South Korean market when it
agreed to sell all 16 of its South Korean outlets to Shinsegae, a
local retailer, for $882 million who are as of late 2006 re-
branding the country's Wal-Marts as E-mart. Wal-Mart had
originally entered the South Korea market in 1998. In the UK,
Wal-Mart's ASDA subsidiary is the second largest chain after
Tesco. Specifically, ASDA is a distant second to Tesco in the UK
grocery market, and as of 2006 the gap is widening, based on
market share figures published by TNS Worldpanel.

Wal-Mart has struggled to export its brand elsewhere as it

rigidly tried to reproduce its model overseas. In China, Wal-
Mart hopes to find success by adapting and doing things the
Chinese way. For example, early on Wal-Mart offended
Chinese consumers by trying to sell packaged fish and
meat. Chinese consumers insist food be freshly
harvested, or even killed in front of them. Wal-Mart began
displaying the meat uncovered, installed fish tanks and live
animals for food and sales increased greatly.

In addition, under heavy pressure from the Communist

Chinese government, Wal-Mart has accepted a form of
organized labor in China. Chinese labor unions do not
negotiate contracts but simply pay dues to the
communist government "to secure the social order."
Moreover, Chinese consumers may be more open to Americana
than shoppers in Europe.

Customer base
Each week, approximately 100 million customers, or one-third
of the US population, visits Wal-Mart's US stores. Wal-Mart
customers place low prices as the most important reason for
shopping at Wal-Mart, reflecting the "Low prices, always"

15
message that Wal-Mart had from 1962 until 2006. Wal-Mart's
average US customer's income is below the national average,
and analysts have recently estimated that more than one-fifth
do not have a bank account, twice the national rate. A Wal-Mart
financial report in 2006 also indicated that Wal-Mart customers
are sensitive to higher utility costs and gas prices. A poll prior
to the 2004 US Presidential Election indicated that 76% of
voters who shopped at Wal-Mart once per week planned to
vote for George W. Bush, while only 23% planned to vote for
John Kerry. When measured against other similar retailers in
the US, frequent Wal-Mart shoppers were rated the most
politically conservative.

In 2006, Wal-Mart made steps to expand its US customer base,

announcing a modification in its US stores from a, "one-
size-fits-all," merchandising strategy to a custom-fitting
merchandise assortment designed to, "reflect each of six
demographic groups – African-Americans, the affluent, empty-
nesters, Hispanics, suburbanites and rural residents.” About six
months later, the company went public with a variation on their
customer profile: "Saving people money so they can live better
lives.” This reflects what Wal-Mart identifies as the three main
groups that its 200 million customers are organized into:
"brand aspirationals" (people with low incomes who are
obsessed with names like KitchenAid), "price-sensitive
affluents" (wealthier shoppers who love deals), and "value-
price shoppers" (who like low prices and cannot afford much
more). Wal-Mart has also made steps to appeal to more liberal
customers, for example, by rejecting the American Family
Association's recommendations and carrying the DVD
Brokeback Mountain, a love story about two gay cowboys in
Wyoming.

Employee and labor relations

Labor unions, religious organizations and environmental groups
have criticised Wal-Mart with regard to its policies and/or
business practices. In particular, several labor unions blame
Wal-Mart workers' unwillingness to join their union on the

16
company's anti-union stance. Others disapprove of
corporation's extensive foreign product sourcing, treatment of
employees and product suppliers, environmental practices, the
use of public subsidies, and the impact of stores on the local
economies of towns in which they operate.

Critics also decry Wal-Mart's employee and workforce relations,

low wages, poor working conditions, inadequate health care.
They also denounce what they call the company's anti-union
policies. Critics claim that Wal-Mart's high turnover rate –
approximately 70% of its employees leave within the first year,
indicates that the workers are dissatisfied with the lack of
recognition and inadequate pay.

A jury in Massachusetts Superior Court awarded nearly 2

million dollars to a woman who worked at Wal-Mart as a
pharmacist for 9 years. She demanded she be paid a wage
differential and bonuses for managers and that she was
reprimanded for reporting missing drugs to the U.S. Drug
Enforcement Administration. The jury rejected Wal-Mart's claim
that she had left the pharmacy unsecured and was fired for
numerous violations of company policy.

17
 THE CONTROVERSIES

Criticism of Wal-Mart
Wal-Mart has been subject to criticism by various groups and
individuals. Many attacks may be motivated by legitimate
concern, lack of knowledge of economic principles, psycho-
social phenomena, or monetary interest. Labor unions fund and
lead community groups, grassroots organizations, religious
organizations, and environmental groups in protests against
Wal-Mart, the company's policies and business practices, and
Wal-Mart customers. Other areas of criticism include the
corporation's foreign product sourcing, treatment of product
suppliers, environmental practices, the use of public subsidies,
and the company's security policies. Critics have observed that
customers tend to prefer Wal-Mart over other retailers, and
charge that Wal-Mart must be doing something unethical in
order to offer lower prices. Wal-Mart denies doing anything
wrong and maintains that low prices are the result of efficiency.

In 2005, labor unions created new organizations and websites

to influence public opinion against Wal-Mart, including Wake
Up Wal-Mart (United Food and Commercial Workers) and
Wal-Mart Watch (Service Employees International Union). By
the end of 2005, Wal-Mart had launched Working Families for
Wal-Mart to counter criticisms made by these groups.
Additional efforts to counter criticism include launching a public
relations campaign in 2005 through their public relations
website, which included several television commercials. Some
Wikipedia edits appear to originate from Wal-Mart computers,
leading some to believe Wal-Mart is "spinning" their image on
Wikipedia. The company retained the public relations firm
Edelman to interact with the press and respond to negative or
biased media reports, and has started interacting directly with
bloggers by sending them news, suggesting topics for postings,
and sometimes inviting them to visit their corporate
headquarters.

18
Economists suggest that Wal-Mart is a success because it sells
products at low prices that people want to buy, satisfying
customer's wants and needs. However, Wal-Mart critics argue
at the same time Wal-Mart's lower prices draw customers away
from more deserving businesses, "hurting the community."

Jay Nordlinger argues that Wal-Mart is attacked simply because

it is a leader of the Fortune 500 list or the largest employer in
America, and a "free-market success story". Penn & Teller
devoted an episode of their show to an analysis of Wal-Mart
criticism as a social movement. They theorized that despite the
noble rhetoric, the real motivation of "Wal-Mart haters" was
rooted in human psychology. They suggested that hating Wal-
Mart permits a person "to feel better about themselves" for
three main reasons: They "don't run a greedy international
conglomerate", they aren't Wal-Mart workers considered "low-
skilled, minimum wage drones", and they aren't Wal-Mart
customers thought of as "toothless, welfare-getting hillbillies".

19
 CONTROVERSY AFFECTING -
Local communities
Store openings

Wal-Mart opened its Teotihuacán Superstore near the Pyramid

of the Moon (shown) amid community protests.

THE ISSUE :

• GENERATORS OF PUBLIC OPINION : When Wal-Mart

plans new store locations, activists sometimes oppose
the new store and attempt to block its construction.
• CONCERNS : Opponents to the new Wal-Mart cite
concerns such as traffic congestion, environment
problems, public safety, absentee landlordism,
bad public relations, low wages and benefits, and
predatory pricing.
• ACTIONS BY THE PUBLICS : Opposition sometimes
includes protest marches by competitors, activists,
labor unions, and religious groups. In some instances,
activists demonstrated opposition by causing
property damage to store buildings or by creating
bomb scares. Some city councils have denied
permits to developers if they plan to include a Wal-
Mart in their project.

20
 • SOME POSITIVES : Those who defend Wal-Mart cite
consumer choice, the overall benefits to the economy,
and object to bringing the issue into the political arena.

THE RESULT AND ACTION BY WALMART :

 A Wal-Mart Superstore opened in 2004 in Mexico, 1.9

miles away from the historic Teotihuacán archaeological
site and Pyramid of the Moon. Although Wal-Mart's
proposal received protest and media attention, the
location was supported by Mexico's National Anthropology
Institute, the United Nations and the Paris based
International Council on Monuments and Sites. Local
merchants, helped by environmental groups and anti-
globalization groups opposed the construction, and poet
Homero Aridjis joined the protest characterizing the
opening as "supremely symbolic" and "...like planting
the staff of globalization in the heart of ancient Mexico."

SIMILAR ISSUE IN THE PAST : In 1998, Wal-Mart proposed

construction of a store off of Charlotte Pike near Nashville,
Tennessee. The building site was home to both American
Indian burial grounds and a Civil War battle site.

 GENERATORS OF OPINION : Protests were mounted by

American Indians and the Civil War interest groups,
but the Wal-Mart was eventually constructed after moving
graves and some modifications of the site so as not to
interfere with the battlefield. Civil War relics were also
discovered at the site.
 ACTION TAKEN : The project developers, JDN Realty of
Atlanta, donated land to permit access to the Civil War
historic site. The Indian burials were removed and re-
buried.

21
 Economic impact

This Bizarro comic is an example of the criticism that Wal-Mart

forces other stores out of business.

THE ISSUE : Wal-Mart is one of the largest corporations in the

world. Critics worry about the presence of Wal-Mart in their
local communities. The criticism is that WALMART forces other
stores out of business. Studies have found both positive and
negative effects on local businesses, jobs and taxpayers.

• Some facts : Kenneth Stone, Professor of Economics at

Iowa State University, in a paper published in Farm
Foundation in 1997, found that some small towns can lose
almost half of their retail trade within ten years of a Wal-
Mart store opening. However, he compared the changes
to previous competitors small town shops have faced in
the past—from the development of the railroads and the
Sears Roebuck catalog to shopping malls. He concludes
that shop owners who adapt to the ever changing retail

22
 market can thrive after Wal-Mart comes to their
community.
• A subsequent study in collaboration with Mississippi State
University indicated that there are "both positive and
negative impacts on existing stores in the area where the
new super center locates.”
• SOME POSITIVES : A June 2006 article published by the
libertarian Ludwig von Mises Institute suggested that Wal-
Mart has a positive impact on small business. It argued
that while Wal-Mart's low prices caused some existing
businesses to close, the chain also created new
opportunities for other small business, and so "the process
of creative destruction unleashed by Wal-Mart has no
statistically significant impact on the overall size of the
small business sector in the United States."

ACTION TAKEN BY WALMART :

 For the concern of jobs, a study by Global Insight, and
commissioned by Wal-Mart, found that its stores' presence
saves working families more than US$2,500 per year,
while creating more than 210,000 jobs in the U.S.
 Another study at the University of Missouri found that a
new store increases net retail employment in the county
by 100 jobs in the short term, half of which disappear over
five years as other retail establishments close.
 Studies of Wal-Mart show consumers benefit from lower
costs. A 2005 Washington Post story reported that "Wal-
Mart's discounting on food alone boosts the welfare of
American shoppers by at least $50 billion per year."
 A study in 2005 at Massachusetts Institute of Technology
measured the effect on consumer welfare and found that
the poorest segment of the population benefits the most
from the existence of discount retailers.
 In 2004, two professors at Pennsylvania State University
asserted that although rates of poverty actually decreased
in U.S. counties with Wal-Mart stores, their data suggested
that poverty increased after "correcting" the data with an
undocumented mathematical formula. They hypothesized,
to explain their results: This could be due to the

23
 displacement of workers from higher-paid jobs in the
retailers customers no longer choose to patronize. Wal-
Mart providing less local charity than the replaced
businesses, or a shrinking pool of local leadership and
reduced social capital due to a reduced number of local
independent businesses.
 Because Wal-Mart employs some part-time and relatively
low paid workers, some of these workers may partially
qualify for some state welfare programs. This has led
critics to claim that Wal-Mart somehow increases the
burden on taxpayer-funded services. A 2002 survey by the
state of Georgia's subsidized healthcare system,
PeachCare, found that Wal-Mart was the largest private
employer of the parents of children enrolled in its
program, one quarter of the employees of Georgia Wal-
Marts qualified to enroll their children in Medicaid.

CONTROVERSY AFFECTING-
Suppliers
With over 80,000 different suppliers, Wal-Mart has faced a
torrent of criticism and issues with regards to its suppliers.

These issues involve:

 Massive Reliance on Imports

24
  Hurting American Manufacturers
 Rock-Bottom Wages and Sweatshop Labor

1. Massive Reliance on
Imports
In February 1985, Walton wrote 3,000 American manufacturers
and wholesalers to announce that the chain wanted to buy
more American goods. Walton said:
"We cannot continue to be a solvent nation as long as
we pursue this current accelerating direction. Our
company is firmly committed to the philosophy by
buying everything possible from suppliers who
manufacture their products in the United States."

Today, however, over 80 percent of Wal-Mart's 60,000 global

suppliers are based in China.

 China's Eighth Largest Trading Partner - In 2004,

almost 10 percent of everything imported to the United
States from China was imported by Wal-Mart -- making the
company, if it counted as a sovereign nation, China's
eighth-largest trading partner.

 Increasing Dependence on India - In March 2004,

Business Line reported that Wal-Mart intends to outsource
$11 billion in textile merchandise over the next few years.
The company has planned to buy $1.5 billion dollars worth
of goods from India in 2006, and has increased operations
out of its Bangalore office -- which already employs 80
staffers focused on new outsourcing relationships.

2. Hurting American
Manufacturers
25
Wal-Mart works to keep the green flowing -- even if that means
red ink for American suppliers:

• Ruining Rubbermaid. In 1994, Rubbermaid won

accolades as the most admired company in the United
States -- but five years later, its fortunes fell so hard that
the company sold itself to a competitor. When the price of
a key component of its products went up, Rubbermaid
asked Wal-Mart for a modest price increase -- but Wal-
Mart said no, and stopped sales of Rubbermaid products.
At a Rubbermaid factory in Wooster, Ohio, that meant the
loss of 1,000 jobs.
• Advises Supplier: 'Open a Factory in China.' To land
a supply contract with Wal-Mart, the Lakewood
Engineering and Manufacturing Company -- a Chicago fan
manufacturer -- had to locate manufacturing operations in
Shenzhen, China. Workers there make $.25 an hour --
while the company's Chicago workforce earned an
average hourly $13.
• Advises Mr. Coffee to Move Overseas. Mr. Coffee --
which won awards for moving manufacturing operations
back to the United States -- faced pressure to shift
production to China even at the height of Wal-Mart's 'Buy
American' program. After Wal-Mart demanded a $1
reduction in the wholesale price of a brisk-selling four-cup
coffeemaker in 1985, Mr. Coffee executives scouted for
factory sites in China -- and executives say Wal-Mart
encouraged offshore production even as it promoted its
'Made in the USA' campaign."
• Forces Huffy Bikes to Brake US Production. Despite
decades of making bicycles in the United States, Huffy
was forced by Wal-Mart price pressures to close three
factories and lay off thousands of workers. The mayor of
Celina, Ohio -- where Huffy closed a large factory -- said
Wal-Mart's "demand for cheaper bicycles drove Huffy out
of Celina."
• Wal-Mart has been accused of using monopsony
power to force its suppliers into self-defeating practices.

26
 For example, Barry C. Lynn, a senior fellow at the New
America Foundation, argues that Wal-Mart's constant
demand for lower prices caused Kraft Foods to "shut down
thirty-nine plants, to let go 13,500 workers, and to
eliminate a quarter of its products." Kraft was unable to
compete with other suppliers and claims the cost of
production had gone up due to higher energy and raw
material costs. Lynn argues that in a free market, Kraft
could have passed those costs on to its distributors and
ultimately consumers. However, only in a non-free market
could Kraft or any other company "pass those costs on"
without losing business because in a free market,
consumers are free to choose another, less expensive
brand.

3. Rock-Bottom Wages and Sweatshop

Labor

 Toys Built in South China Sweatshop. A China Labor

Watch report detailed the mistreatment of workers in a
factory making small toys for Wal-Mart. As of early
December 2005, violations against workers at the
Lungcheong factory were as follows: the systematic denial
of maternity leave, work-related injuries leading to
termination, illegally denying health insurance, mandatory
overtime work, insane quotas and employing underage
workers.
 Low Pay Scales. The average full-time United States
Wal-Mart employee earns $10.11 per hour. In Swaziland, a
worker at a Wal-Mart subcontractor earns 53 cents per
hour; in Indonesia, a worker at a Wal-Mart subcontractor
earns 46 cents per hour; in Nicaragua, a worker at a Wal-
Mart subcontractor earns 23 cents per hour; and in
Bangladesh and China, workers at Wal-Mart
subcontractors earn 17 cents per hour.
 Missing Overtime Pay. In 2004, the International Labor
Rights Fund (ILRF) documented violations of overtime pay

27
rules at Wal-Mart garment supply factories in Nicaragua,
Indonesia, Bangladesh and Swaziland. In September 2005,
ILRF filed a class-action lawsuit on behalf of workers in
China, Bangladesh, Nicaragua, Swaziland, and Indonesia.
Workers in these countries complained of being "kicked
and beaten, locked in factories, fired for supporting a
union and not paid the minimum wage or overtime."

28
 CONTROVERSY AFFECTING -
Employee and labor
relations
With close to two million employees worldwide, Wal-Mart has
faced a torrent of lawsuits and issues with regards to its
workforce.

These issues involve

 Low wages,
 Poor working conditions,
 Inadequate health care,
 The company's strong anti-union policies.

Critics point to Wal-Mart's high turnover rate as evidence of an

unhappy workforce, although other factors may be involved.
Approximately 70% of its employees leave within the first year.

Wages
• A substantial number of associates earn far below the
poverty line according to “Is Wal-Mart Too Powerful?”
which appeared in Business Week on October 6, 2003 and
to United States Department of Health and Human
Services 2001 Poverty Guidelines and “Statistical Analysis
of Gender Patterns in Wal-Mart’s Workforce” by Dr.
Richard Drogin from 2003.

• Associates cannot earn enough to support a family

according to “Poverty and Family Budgets” online at
www.epinet.org.

29
• Wal-Mart can afford wage increases according to the
group's analysis of the Wal-Mart Annual Report 2005

• Wal-Mart illegally forces employees to work off-the-clock,

based on wage and hour lawsuits listed in that same
report. The group also refers to the Associated Press
article, "Federal Jury Finds Wal-Mart Guilty in Overtime
Pay Case," which appeared in the Chicago Tribune, which
appeared on Business section page 3, on December 20,
2003, and to Steven Greenhouse's article, “Suits Say Wal-
Mart Forces Workers to Toil Off the Clock,” which
appeared in the New York Times in March 2002.
• A study by the Los Angeles Alliance for a New Economy
found that Wal-Mart employees typically earn about 20%
less than the average U.S. retail worker, and some
$10,000 less than what the average two-person family
requires to meet its basic needs.
• Wal-Mart violates the Fair Labor Standards Act by having
minors work too late, during school hours, or for too many
hours in a day and by having associates miss breaks and
lose meals according to the Greenhouse article.
• Wal-Mart founder Sam Walton once said, "I pay low
wages. I can take advantage of that. We're going to be
successful, but the basis is a very low-wage, low-benefit
model of employment." Wal-Mart managers are judged by
upper management based on their ability to control
payroll costs, which puts extra pressure on higher-paid
workers to be more productive. The above statement and
the internal strategy that Wal Mart applies in its company
made labor and other interest groups stand against Wal-
Mart.

2. Working conditions
• Wal-Mart has also faced accusations involving poor
working conditions of its employees. For example, a class
action lawsuit in Missouri asserted approximately 160,000
to 200,000 people who were forced to work off the clock,

30
 were denied overtime pay, or were not allowed to take
rest and lunch breaks.
• In 2000, Wal-Mart paid $50 million to settle a class-action
suit that asserted that 69,000 current and former Wal-
Mart employees in Colorado had been forced to work off-
the-clock. The company has also faced similar lawsuits in
other states, including Pennsylvania, and Oregon.
• Class-action suits were also filed in 1995 on behalf of full-
time Wal-Mart pharmacists whose base salaries and
working hours were reduced as sales declined, resulting in
the pharmacists being treated like hourly employees.
• Contrary to criticism that Wal-Mart holds employees in an
iron grip of fear and intimidation, on October 16, 2006,
approximately 200 workers on the morning shift at a Wal-
Mart Super Center in Hialeah Gardens, Florida walked out
in protest against new store policies and rallied outside
the store, shouting "We want justice" and criticizing the
company's recent policies as "inhuman." This marks the
first time that Wal-Mart has faced a worker-led revolt of
such scale, according to both employees and the
company.
• Reasons for the revolt included cutting full-time
hours, a new attendance policy, and pay caps that
the company imposed in August 2006, compelling
workers to be available to work any shift (day, swing
or night), and that shifts that would be assigned by
computers at corporate headquarters and not by local
managers.
• The report by Congressman Miller alleged that in ten
percent of Wal-Mart's stores, nighttime employees were
locked inside, holding them prisoner. There has been
some concern that Wal-Mart's policy of locking their
nighttime employees in the building has been implicated
in a longer response time to dealing with various
employee emergencies, or weather conditions such as
hurricanes in Florida.

31
ACTION BY WALMART :

 Wal-Mart said this policy was to protect the workers, and

the store's contents, in high-crime areas and
acknowledges that some employees were inconvenienced
in some instances for up to an hour as they had trouble
locating a manager with the key.
 However, fire officials confirm that at no time were fire
exits locked or employees blocked from escape. Wal-Mart
has advised all stores to ensure the door keys are
available on site at all times.
 The issue has become less of a problem with the increase
in the number of twenty-four hour stores.

3. Child labor violations

• In January 2004, the New York Times reported on an
internal Wal-Mart audit conducted in July 2000, which
examined one week's time-clock records for roughly
25,000 employees. According to the Times, the audit,
"pointed to extensive violations of child-labor laws and
state regulations requiring time for breaks and meals,"
including 1,371 instances of minors working too late,
during school hours, or for too many hours in a day.
• There were 60,767 missed breaks and 15,705 lost
meal times.

ACTION BY WAL – MART

 Wal-Mart’s vice president for communications, Mona

Williams, responded that company auditors had
determined that the methodology used was flawed. "This
audit is so flawed and invalid that we did not respond to it
in any way internally."

32
4.Use of illegal aliens
• Wal-Mart has been accused of using illegal aliens in many
of its stores and work locations.
• In one case, Wal-Mart executives did know that
contractors were using illegal aliens as they had been
helping the Federal government with the investigation for
the previous three years.
• Some critics argued that Wal-Mart personally hired illegal
aliens, while Wal-Mart claims they were employed by
contractors who won bids to work for Wal-Mart.
• On October 23, 2003, federal agents raided 61 Wal-Mart
stores in 21 states, in a crackdown known as, "Operation
Rollback," resulting in the arrests of 250 nightshift janitors
who were illegal aliens.
• Following the arrests, a grand jury convened to consider
charging Wal-Mart executives with labor racketeering
crimes for knowingly allowing illegal aliens to work at their
stores. The workers themselves were employed by
agencies Wal-Mart contracted with for cleaning services.
• The October 2003 raid was not the first time Wal-Mart was
caught using illegal aliens. Earlier raids in 1998 and 2001,
resulted in the arrests of 100 illegal aliens at Wal-Mart
stores around the country.
• Later, in November 2005, 125 alleged illegal aliens were
arrested while working on construction of a new Wal-Mart
distribution center in eastern Pennsylvania.

ACTION BY WAL-MART

 While Wal-Mart executives have laid the blame squarely

with the contractors, but federal investigators point to
wiretapped conversations showing that executives knew
the workers were illegal aliens.. According to Wal-Mart,
the workers were employees of Wal-Mart's construction
subcontractor in the other case.

33
5. Health insurance
• Its plan does not cover over 600,000 employees according
to its own reports.
• The health care coverage is statistically lower than the
industry average according to the Kaiser Family
Foundation and Health Research and Educational Trust's
2004 report.
• Employees pay more for health care costs than those of
other large companies, according to 5500 Filings and the
Kaiser report*
• Wal-Mart spends less on health care than industry and
national averages, as reported in the Wall Street Journal
by Bernard Wysocki, Jr. and Ann Zimmerman in their
September 39, 2003 page one article, “Wal-Mart Cost-
Cutting Finds a Big Target in Health Benefits.”
• Wal-Mart only spends 75 cents per hour per employee on
health benefits, according to its 5500 Filings and annual
report.
• Wal-Mart increased advertising more than health care in
1995, 1996, 1997-1999, 2003 and 2004, according to its
annual reports and 5500 filings.
• One out of seven employees has no coverage, double the
national average for large firms according to the annual
report and to "Employer-Sponsored Health Insurance
Coverage: Sponsorship, Eligibility, and Participation
Patterns in 2001,” Bowen Garrett, Ph.D., released by the
Kaiser Family Foundation September 2004.
• Wal-Mart spends an average of $3,500 per employee for
health care, 27% less than the retail-industry average of
$4,800. When asked why so many Wal-Mart workers
choose to enroll in state health care plans instead of Wal-
Mart's own plan, Wal-Mart CEO Lee Scott acknowledged
that some states' benefits may be more generous than
Wal-Marts own plan: "In some of our states, the public
program may actually be a better value - with relatively
high income limits to qualify, and low premiums." Critics
of Wal-Mart in "Wal-Mart: The High Cost of Low Price"

34
 argue that employees are paid so little they cannot afford
health insurance.
• On October 26, 2005, a Wal-Mart internal memo sent to
the firm's Board of Directors advised trimming over $1
billion in health care expenses by 2011 through measures
such as attracting a younger, implicitly healthier work
force by offering education benefits. The memo also
suggested giving sedentary Wal-Mart staffers, such as
cashiers, more physically demanding tasks, such as, "cart-
gathering," and eliminating full-time positions in favor of
hiring part-time employees who would be ineligible for the
more expensive health insurance and several policy
proposals which may violate the Americans with
Disabilities Act of 1990. The memo also accused Wal-
Mart's lower paid employees of abusing emergency room
visits, "possibly due to their prior experience with
programs such as Medicaid," whereas such visits may
actually be due to the reduced ability of uninsured or
underinsured people to make timely appointments to see
a regular physician.
• Critics point to this story as evidence that Wal-Mart
purports to be generous with its employee benefits,
while in reality the company is working to cut such
benefits by reducing the number of full-time and
long-term employees and discouraging supposedly
unhealthy people from working at Wal-Mart.

ACTION BY WAL-MART

 Wal-Mart conducted a study to contradict the above

statements and released a Wal-Mart Associate Guide in
2005.
 Waiting periods for associates are longer than the national
average, while managers face no waiting period according
to the Wal-Mart 2005 Associate Guide and the cited Kaiser
report.
 Its most affordable plan includes high deductibles that
make it costly, especially for family plans, according to
the Wal-Mart 2004 Associate Guide and UFCW analysis.

35
 Premiums are increasing more rapidly than other
employers', according to UFCW analysis of annual Wal-
Mart Associate Guides and the Employer Health Benefits:
2004 Annual Survey by Kaiser.
 A December 2004 nationwide survey commissioned by
Wal-Mart showed that the use of public-assistance health-
care programs by children of Wal-Mart workers was at a
similar rate to other retailers' employees, and at rates
similar to the U.S. population as a whole.
 Wal-Mart admits public health care assistance is a “Better
Value” despite $10 billion in profits, according the
transcript of CEO Lee Scott's April 5, 2005 speech.
 On April 17, 2006, Wal-Mart announced it was making a
health care plan available to part-time workers after 1
year of service, instead of the prior 2 year requirement.
One criticism of the new plan is that it provides benefit
only after a $1,000 deductible is paid ($3,000 for a
family). These deductibles may financially be out of reach
for eligible part-time workers. Wal-Mart estimates this
change can add 150,000 workers to health coverage
plans, if all who are eligible take part. By January 2007,
the number of workers enrolled in the company's health
care plans increased by 8%, which Wal-Mart attributed to
the introduction of less expensive insurance policies.
However, even with this increase, less than half of Wal-
Mart's employees, or 47.4%, received health insurance
through the company, with 10%, or 130,000, receiving no
coverage at all.

6. Labor union opposition

• Wal-Mart has been criticized for its policies against labor
unions. Critics blame workers reluctance to join the labor
union on Wal-Mart anti-union tactics such as managerial
surveillance and pre-emptive closures of stores or
departments who choose to unionize.

36
ACTION BY WAL-MART :

 Once the company founder Sam Walton resisted a

unionization push by the Retail Clerks International Union
in two small Missouri towns by hiring a professional, John
Tate, to educate workers on the negative aspects of
unions. On Tate's advice, he also took steps to show his
workers on how the company had their best interests in
mind, encouraging them to air concerns with managers
and implementing a profit-sharing program. A few years
later, Wal-Mart hired a consulting firm, Alpha Associates,
to develop a union avoidance program.
 Wal-Mart states that it is not anti-union but, "pro-
associate," arguing that its employees do not need to pay
third parties to discuss problems with management as the
company's open-door policy enables employees to lodge
complaints and submit suggestions all the way up the
corporate ladder.
 In March 2005, Tom Coughlin was forced to resign from
Wal-Mart's Board of Directors, facing charges of
embezzlement. Coughlin claimed that the money was
used for an anti-union project involving cash bribes paid to
employees of the United Food and Commercial Workers
Union in exchange for a list of names of Wal-Mart
employees that had signed union cards. He also claimed
that the money was unofficially paid to him, by Wal-Mart,
as compensation for his anti-union efforts. Wal-Mart has
denied that such an anti-union project ever existed, and
maintains that the evidence points to the fact that
Coughlin was simply stealing money from the company.
 Wal-Mart quickly held talks with the workers, addressing
their concerns. Wal-Mart policy permits associates to air
grievances without fear of retaliation.
 In August 2006, Wal-Mart announced that it would allow
workers at all of its Chinese stores to become members of
trade unions, and that the company would work with the
state-sanctioned All-China Federation of Trade Unions
(ACFTU) on representation for its 28,000 staff.

37
The above problems led the unions to take some actions and
campaigns against WAL-MART which made the issue related to
labor problems more grave for WAL-MART and forced WAL-
MART to take up some PR action.

38
 PUBLIC RELATIONS
Wal-Mart Stores Inc. is the largest retail company in the United
States and has been ranked number one on the Fortune 500
Index by Fortune Magazine. Wal-Mart has four parts to their
corporate strategy.

1. Dominance in the Retail Market

2. Expansion in the U.S. and International Markets
3. Creation of Positive Brand and Company Recognition
4. Branch Out into New Sectors of Retail

Wal-Mart’s public affairs strategy is working to implement of

these policy goals happen. Its public affairs strategy enables
the company to move into other sectors of the marketplace
and expand into foreign countries. The public affairs strategy
also involves gaining access to politicians who can help Wal-
Mart achieve its goals. Wal-Mart has a very active Political
Action Committee that gives almost a quarter million dollars
annually.

THE PR CAMPAIGN :

“Working Families for Wal-Mart”

It was an advocacy group formed by Wal-Mart and the Edelman
public relations firm on December 20, 2005. It has been used to
counter criticism of Wal-Mart from union-funded groups such as
Wake Up Wal-Mart and Wal-Mart Watch which were in their
infancy at that time. The group is financially supported by Wal-
Mart and is headquartered in Edelman’s Washington, D.C.
office. It is not organized as a non-profit, and is not required to
disclose its sources of funding.

Critics have accused Wal-Mart of leaving the impression that

Working Families for Wal-Mart is a spontaneous grass-roots
organization, without fully disclosing its financial reliance upon
Wal-Mart. The group's web site does not reveal its connection

39
to Wal-Mart or Edelman. Its home page features a blog and
with a link stating that the bloggers are employees of Edelman;
however, no other mention is made of Edelman on the site.
This has led to accusations of Wal-Mart being engaged in
astroturfing. For example, Wal-Mart Watch has stated,
“Working Families for Wal-Mart is not a lobbying group or non-
profit, but is a sock puppet for Edelman, Wal-Mart’s public
relations firm…”.

Mission statement
According to the organization's official website, "Working
Families for Wal-Mart is committed to fostering open and
honest dialogue with elected officials, opinion makers and
community leaders that conveys the positive contributions of
Wal-Mart to working families. We believe that Wal-Mart
provides value to its customers, to its associates and to the
communities it serves."

Leadership
Initial leadership
The group's initial leader was Bishop Ira Combs Jr. of the
Greater Bible Way Temple of the Apostolic Faith in Jackson,
Michigan. According to Lynda Edward's December 22, 2005
story in the Arkansas Democrat Gazette, Combs said, “Some
friends I worked with on the 2004 Bush campaign phoned me
and asked me if I knew about any good things Wal-Mart was
doing in my community...I said Wal-Mart is supplying jobs that
may not pay a union wage but they pay twice the minimum
wage. They asked me if I would be part of this group. Wal-Mart
isn’t paying me.”

Another of the group's early members, Courtney Lynch, taught

seminars at Wal-Mart headquarters on cultivating female
leaders. She states that she gets no salary as an advocate but
estimated that her consulting firm got 7 percent of its revenue
from Wal-Mart this year.

40
Andrew Young assumes chairmanship
On February 27, 2006, former ambassador Andrew Young
assumed duties as "the public spokesman for a group
organized with backing from Wal-Mart Stores Inc. that defends
the world's largest retailer against mounting attacks from its
critics," according to Associated Press business writer Marcus
Kabel's article. In a telephone interview, he told Kabel that he is
not being paid but that the organization that he currently
heads, GoodWorks International, has a contract from Working
Families for Wal-Mart for consulting work. GoodWorks pairs
corporations and governments on global issues. Working
Families for Wal-Mart declined to disclose how much Wal-Mart
contributes or what it is paying GoodWorks.

Young, a former labor organizer, parts ways with unions

regarding Wal-Mart. "The union position is talking about the
redistribution of wealth, but they're not talking about
generating new wealth. Wal-Mart is generating new wealth
when it comes in. The pluses outweigh the minuses. They do
give benefits, they do have health insurance."

Other Advisory Board members

According to organization's website (as at February 28, 2006),
the advisory board in addition to Combs, Young (who is listed
as the Chairman) and Lynch were:

• Charles W. Baird, Ph.D.--Professor of Economics at

California State University, East Bay and Associate Dean
for Academic Affairs in the College of Business and
Economics.
• Pat Boone--entertainer.
• Honorable Jennifer Carroll--Florida House of
Representatives (R-13).
• Tom Chung--CEO of Asian Rehabilitation Service, Inc.
• Carroll Cocchia--Carroll Cocchia founder the Native
American Chamber of Commerce in June, 2000.

41
• Lupita Colmenero--2005 President of the National
Association of Hispanic Publications
• Maria de Lourdes Sobrino--Founder and CEO of Lulu’s
Dessert Corporation.
• Ron Galloway--investment advisor and producer of Why
Wal-Mart Works & Why That Makes Some People C-R-A-Z-
Y
• Barbara Kasoff--President and CEO, and Co-Founder, of
Women Impacting Public Policy, Inc.
• Rev. Dr. Barbara L. King--Founder/Minister of the Hillside
Chapel and Truth Center, Inc., in Atlanta, Georgia.
• Chris Lewis----Vice President of Public Education for the
Wheelchair Foundation
• Betty Miller--retired Florida English teacher
• Martha Montoya--Founder and President of Los Kitos
Entertainment LLC and a Board Member of the Latino
Business Association.
• Catherine Smith--Vice President for iVilliage Inc. divisions
of Diversity Best Practices, the Business Women's Network
and Best Practices in Corporate Communications.

42
Public relations firm: The
Herald Group, LLC
According to the December 22, 2006 article by Lynda Edwards,
the campaign is directed by the Washington, D. C. public
relations firm, Herald Group, LLC. One of its founding principals
is Taylor Gross, 30, an experienced Republican party operative.

REACTIONS BY THE GROUPS

CRITICAL OF WALMART
Various campaigns and actions were taken up by the labor
unions and related publics to raise the labor problems and
community issues as Wal Mart was doing its PR to improve
some conditions against it.

The campaigns include – the “Wake up Wal-Mart”, the “Wal-

Mart watch” campaigns and the “AFL-CIO”

43
 WAKE UP WALMART
Wake Up Wal-Mart is a union-backed campaign group
affiliated with the UFCW. It is based in Washington, D.C. and is
often critical of the business practices of Wal-Mart, the world’s
largest retailer, and the largest private employer in the United
States. This campaign was led by 13 religious leaders from
Texas, Georgia, Tennessee, Kentucky, Colorado and Oklahoma
to persuade Wal-Mart to adopt labor reforms. Its spokesman,
Chris Kofinis, expressed frustration by what he sees as a media
chess game.

The group claims Wal-Mart is currently offering its employees

substandard wages and health care benefits, and has called on
the retailer to improve both.

Wake Up Wal-Mart was founded April 5, 2005 and maintains

the web site WakeupWalMart.com, the centerpiece of the
organization.

The campaign's director is Paul Blank, a graduate of Duke

University and the political director for the Dean campaign.
According to CNN.com's biography for the program, "True
Believers," Blank managed North Carolinian Chris Kouri's
campaign for Congress in 2002. He also worked for Democrat
Harvey Gantt's 1996 Senate race in North Carolina.

In reaction to Young's role with the organization, Paul Blank,

campaign director for Wake Up Wal-Mart issued a statement on
February 27, 2006. “We call on Ambassador Andrew Young to
use his new position to help us change Wal-Mart for the better,
rather than defend its abysmal record of child labor violations
and poor health care. As a consultant to Wal-Mart, Ambassador
Young is now in a unique position to reach out to Wal-Mart and
CEO Lee Scott and urge them to change. We hope he will work
with WakeUpWalMart.com and help our efforts to create a
better Wal-Mart and build a better America."

44
Rationale
"All across America, consumers and taxpayers are waking up to
the high cost of Wal-Mart's poverty wages, reliance on taxpayer
funded state health care programs and devastating impact on
communities. Wal-Mart's values are not America's values,"
stated Blank. "There is only one force powerful enough to
change the largest corporation in the world, the largest retailer
in the world and the largest employer in the world -- the
American people. We are Wal-Mart's workers and consumers
and it is time for Wal-Mart to wake up and start doing what is
right for its employees, our families, and our country."

The website lends credible facts and information to the whole

America so as to pass on a similar sentiment as they had
against Wal-Mart across the country so as to affect some
solutions to their above said problems.

Group's information on Wal-Mart - The group asserts problems

in the following areas and makes and provides its
documentation for its claims. It provides brochures on these
issues in downloadable pdf format.

Television ads - A television spot featured an implication that

Wal-Mart funds terrorism. While not stating it directly, the
commercial features a chalkboard showing that Wal-Mart's
buying of goods and services from China funnels millions of
dollars into that country. It then states that China sponsors
foreign terrorism, with the implication being that by supporting
Wal-Mart, a citizen is supporting terrorism.

The "documentary" Wal-Mart: The High Cost of Low Price,

shows one successful unionization of a Wal-Mart store in
Jonquière, Quebec (Canada) in 2004, but Wal-Mart was forced
closed the store five months later because the store had
become unprofitable due to the costs of union demands. In
September 2005, the Québec Labor Board ruled that the
closing of a Wal-Mart store amounted to a reprisal against
unionized workers and has ordered additional hearings on

45
possible compensation for the employees, though it offered no
details.

Another campaign called “wal mart watch” was initiated for the
above problems.

46
 WAL MART WATCH

In Spring 2005, Wal-Mart Watch began a nationwide

public education campaign to challenge the world’s
largest retailer, Wal-Mart, to become a better employer,
neighbor, and corporate citizen.

Wal-Mart Watch, formed, was a joint project of The Center for

Community and Corporate Ethics, a non-profit organization
studying the impact of large corporations on society and its
advocacy arm, Five Stones. Initial national partners include
Sojourners, American Independent Business Association,
National Council of Women’s Organizations, Sierra Club,
Interfaith Worker Justice, Campus Progress, Teamsters, United
Food and Commercial Workers, Sprawl-Busters. Initial local
partners include Neighborhood Retail Alliance, Arizona Chain
Reaction, LAANE, Kentucky Fairness Campaign, Florida National
Organization of Women, Wisconsin League of Conservation
Voters and Clergy and Laity United for Economic Justice.

Backers and Funding

Wal-Mart Watch was originally funded by the Service
Employees International Union (SEIU). According to the Wall
Street Journal, Wal-Mart Watch is mainly funded by Five Stones,

47
a 501(c)(3) organization that received $2,775,000 in 2005 from
the SEIU. The SEIU reportedly gave Five Stones $1 million in
2004 to start Wal-Mart Watch. Furthermore, Andy Stern, the
SEIU President, is the Chairman of Wal-Mart Watch. It is alleged
that SEIU's involment with Five Stones or Wal-Mart Watch has
not been publicly disclosed by Wal-Mart Watch, the SEIU or Five
Stones. In this sense, Wal-Mart Watch is not a "grass roots"
organization.

Mission
Wal-Mart Watch's mission is to benefit Wal-Mart communities.
Wal-Mart Watch aggressively tells a new, more truthful
Wal-Mart story. They bridge the gap between ordinary
citizens and community organizations concerned about Wal-
Mart's unchecked growth and negative impact on the American
society. They challenge Wal-Mart to embrace its moral
responsibility as the nation's biggest and most important
corporation.

Projects
During the period of November 13-19, 2005, Wal-Mart Watch
sponsored "Higher Expectations Week" to highlight its
campaign to reform Wal-Mart. It reported over 300 supporting
organizations.

In 2006 they launched A Handshake with Sam, seven moral

principles that reflect sound business practices and responsible
corporate behavior in the twenty-first century. The main
mission is to persuade Wal-Mart to assume its leadership role
as America's largest corporation and enact positive change. If
Wal-Mart commits to these principles and assumes the moral
responsibility that they expect of their biggest and most
important American corporation, it will have proven worthy of
America's admiration.

On January 5, 2006, AFL-CIO President John Sweeney, saying

the union had been unable to garner Republican congressional

48
support for a national solution, had announced a "Fair Share
Health Care Campaign" in 33 states. The campaign would work
to pass state laws requiring large corporations to spend a
certain percentage of their payrolls to provide health care
benefits for employees or pay into a state Fair Share Health
Care Fund. The percent of payroll would be set by the state
legislature or based on the average percentage paid by large
employers in the state.

Sweeney cited the example an Alliance, Ohio Wal-Mart

employee who went on Medicaid when her wages would not
cover the cost of the corporation's health insurance. “Why
should a company like Wal-Mart—which made $10 billion last
year alone—be able to force taxpayers to foot the bill for their
health care costs?” Sweeney asked.

AFTER EFFECTS OF THE ABOVE

CAMPAIGNS :
Wal-Mart badly needs a boost. Its sales growth has waned in
recent years and an effort to reach out to higher-earning
shoppers has sputtered, partly because of the company's
beleaguered image. Sales at stores open more than a year fell
0.1% in the four weeks ending Nov. 24 -- only the second
monthly drop in 27 years. This year Wal-Mart scaled back
expansion plans amid pressure from investors and political
opposition in New York, Massachusetts, California and
elsewhere.

49
 ACTION TAKEN BY WALMART
The above reactions were counter acted by Wal Mart by
another campaign called “Wal-Marting Across America”.

In 2006, the group sponsored the web site Wal-Marting Across

America which saw an anonymous Jim and Laura visit Wal-
Marts across the country to meet and blog about employee
experiences. According to Business Week, the couple was flown
to the west coast, provided with an RV and gas money, and
Laura was paid a freelance fee by Working Families for Wal-
Mart.

Critics have pointed out that the original website created the
false impression that this was a self-funded trip, unaffiliated
with Wal-Mart.

But it was later revealed the "Jim" was James Thresher, a

photographer for The Washington Post newspaper (whose
freelance work on Wal-Marting Across America was a breach of
contract; also in the Business Week article), and that “Laura” is
Laura St. Claire, a freelance writer who works with the United
States Department of the Treasury.

Another effort :: THROUGH PR ACTIVITIES

• HIRED ONE OF THE BIGGEST AGENCIES-THE EDELMAN AND

ADDED SOME BIG NAMES TO ITS PR STAFF : Wal-Mart's
response: they hired some of the biggest names in the PR
industry and have fired up a war room to try to ease the
minds of reluctant shoppers. Privately held Edelman is the
largest U.S. public relations firm with 2005 revenue of
$254 million and clients such as Microsoft Corp. and Pfizer
Inc. (Dow Jones & Co., publisher of The Wall Street Journal,
has also been a client.)
• DOCUMENTARY v/S THE DOCUMENTARY IN RETURN:
They've even gone so far as to make a film to counter
Greenwald's documentary which they've so cleverly titled

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 "Why Wal-Mart Works & Why That Makes Some People
Crazy".
• RADIO SHOWS AND SPEECHES AT PUBLIC
PLACES :Over the last year (2006), Lee Scott has
appeared on the Rev. At harpton's radio show, talked
about pro-environment policies and given speeches that
repeatedly state his organization's devotion to "working
families."
• CAMPAIGNS ORGANISED BY ITS PR AGENCY: For the
last 15 months, the Edelman public-relations firm, led by
seasoned political operatives, has been directing a
campaign it calls "Candidate Wal-Mart." The goal: Rescue
the battered image of the world's largest retailer.

• APOLOGIES AND RESIGNATION OF CRUCIAL PEOPLE:

Edelman's bipartisan team has been behind the curtain
during Wal-Mart's most visible recent initiatives -- and
some of its public stumbles. The PR giant also organized a
grass-roots group called Working Families for Wal-Mart.
Yet the Working Families group has produced some of
Edelman's worst fumbles, too. Union-backed Wal-Mart
Watch swooped in to claim the
workingfamiliesforwalmart.com Web address, and posted
statements there mocking the company-backed group as
artificial. But Mr. Young raised a stir when he told an
African-American newspaper in California that Jewish,
Korean and Arab shopkeepers overcharged inner-city
African-Americans for stale food. He had been asked
about Wal-Mart's impact on mom-and-pop businesses. Mr.
Young apologized and resigned from Working Families for
Wal-Mart and it had to scramble when the leader it helped
recruit, Andrew Young, made derogatory comments about
ethnic shopkeepers and was forced to resign.

• APPOINTMENT OF INFLUENTIAL PEOPLE TO THE

WAL-MART’S PR ASSIGNMENT: Image is crucial for
drawing customers, smoothing the way for new stores in
urban areas and beating back legislation that would raise
costs. "This is not a public-relations campaign," says

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 Michael Deaver, a former chief of staff for President
Reagan who is now helping to oversee the Wal-Mart
account as an Edelman vice chairman. "It's a win-or-lose
campaign. And if you've been involved in a presidential
campaign, that's the way you look at things."
• HIRED AN EXPERIENCED PR PROFESSIONAL: Leslie
Dach, a former adviser to Democratic politicians, led the
campaign's first year as an Edelman vice chairman. Now
Mr. Dach is a Wal-Marter in full: In July, the retailer hired
him as an executive vice president for communications
and government relations, reporting directly to Mr. Scott,
the CEO.
• ANNUAL GENERAL MEETINGS: The pressure grew last
year when unions started two organizations to hammer
Wal-Mart: the Service Employees International Union's
Wal-Mart Watch and WakeUpWalMart.com, funded by the
United Food and Commercial Workers union. At Wal-Mart's
annual meeting on June 3, 2005, Mr. Scott said: "Your
company is the focus of one of the most well-organized
and well-financed corporate campaigns in history...A
coalition of unions and others are spending over $25
million this year alone to try to do damage to this
company."
• A two dozen Wal-Mart executives sat behind tables at a
community-college conference center in Bentonville, Ark.,
Wal-Mart's hometown. They heard pitches from three PR
firms chosen as finalists -- Edelman, APCO Worldwide and
DCI Group.
• INTERNET BLOGS,GRASS-ROOTS INITIATIVES: In their
"Candidate Wal-Mart" pitch, Messrs. Dach and Deaver of
Edelman described a campaign with all the trappings of a
U.S. presidential bid. A war room of publicists would
respond quickly to attacks or adverse news. Operatives
would be assigned to drum up popular support for Wal-
Mart via Internet blogs and grass-roots initiatives.
Skeptical outside groups, such as environmentalists,
would be recruited to team up with Wal-Mart. Edelman
won and quickly put its plan into practice, with three

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 dozen staffers working on the account in Washington,
D.C., and Bentonville.
• RECOGNITION OF KEY STRENGTHS TO SHOW SOME
POSITIVES: Wal-Mart had been mulling the $4-per-
prescription program before Edelman's arrival, but the
firm saw it as a chance to promote Wal-Mart as a catalyst
for health-care change and hence for publicity events. In
late September, Wal-Mart executives gathered with
Florida officials, including Gov. Jeb Bush, to announce the
program's introduction in the Tampa area. That generated
national coverage, despite Wal-Mart's initial statements
that it wouldn't expand the program beyond Tampa until
2007. Then the company rolled it out in rapid-fire
succession to 48 other states, declaring that the low-cost
pills were so popular it didn't want to keep people waiting.
• NATIONAL APPEAL OF PR PROGRAMS: The
acceleration of the program earned new national
coverage, but even more important were local news
outlets. The 79 news conferences arranged by Edelman
across the country helped the effort win notices from The
Dallas Morning News, Vermont 's Burlington Free Press
and others.

Mr. Dach believes his experience trouble-shooting for political

candidates can be applied to the corporate world. "Every crisis
is an opportunity," he said once in an interview. "The American
people understand imperfection. But what they want to see is a
company taking responsibility and then moving forward."

• CHARITY AND SOCIAL RESPONSIBILTY TO BUILD

CREDIBILTY: In the wake of Hurricane Katrina, Wal-Mart
rushed to reopen its stores and speed supplies to the
storm-damaged areas. Edelman helped Wal-Mart get
coverage for its efforts and spotlighted Jason Jackson, the
retailer's emergency-planning director. Mr. Jackson gave
interviews, spoke on a conference call with reporters and
gave some a peek into his command center for tracking
weather and routing supplies. After the storm, evacuees
and local officials proclaimed in the news that Wal-Mart
had out hustled the federal government. Also, Wal-Mart

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 quickly made a $15 million donation to the hurricane-
relief fund organized by former Presidents Clinton and
Bush. The two ex-presidents praised Wal-Mart's
generosity.
• The initiative “Working Families for Wal-Mart”, the grass-
roots organization was continued. The idea was to allow
Wal-Mart's defenders to strike back against critics without
requiring the company's own PR staff to enter the fray.
Wal-Mart provided the group's funding and Edelman
staffed it.
• CREDIBLE PEOPLE JOINING TEAM: Edelman executive
Greg St. Claire was the one who played a leading role in
recruiting Mr. Young, the former U.S. ambassador to the
United Nations, as the group's chairman, according to
people who spoke with Mr. St. Claire.
• Others recruited by Edelman for the group's 14-member
steering committee include Wheelchair Foundation vice
president Chris Lewis, the son of entertainer Jerry Lewis,
and singer Pat Boone. In its first year, Working Families for
Wal-Mart reports amassing 150,000 supporters and
assembling steering committees of local dignitaries in six
states.

• FauxPas
In October, bloggers and mainstream media criticized
Working Families for Wal-Mart for not disclosing the full
identities of two people -- one the sister of Edelman's Mr.
St. Claire -- whom it enlisted to write a pro-company blog.
The two drove an RV around the country and posted
happy accounts of the Wal-Mart customers and employees
they encountered. Edelman's chief executive, Richard
Edelman, apologized on his own blog for the lack of
disclosure.
• The faux pas had union groups crowing. "Edelman
stumbled badly on the Wal-Mart account, and the fake-
blog episode is fast becoming a case study on the
importance of PR transparency," said Wal-Mart Watch
spokesman Nu Wexler.

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• In its pitch for the account, Edelman had warned Wal-Mart
that Google results for a "Wal-Mart" search yielded mostly
unflattering material, potentially overshadowing the
company's own sites. Edelman sought to balance that
equation by funneling positive information about Wal-
Mart to bloggers. For example, news that 24,500 people
applied for 325 jobs at a new Wal-Mart outside of Chicago
made its way onto some blogs.
• RELEASING DOCUMENTS OF IMPORTANCE TO BUILD
TRUST: Edelman has also tried to help Wal-Mart gain
some control over the issue of health care. In October
2005, Wal-Mart Watch distributed an internal Wal-Mart
document detailing strategies for cutting health-benefit
costs by discouraging unhealthy job applicants. In January,
Maryland enacted a law targeting Wal-Mart that required
large employers to spend certain amounts on health-care
benefits for workers in the state. The law spurred similar
bills prompted by labor groups in more than two dozen
states.
• Mr. Dach pushed Mr. Scott to discuss health in a February
speech to the National Governors Association. Mr. Scott
took Mr. Dach's advice, announcing in his Edelman-
drafted speech that Wal-Mart would improve health
benefits for its workers by such steps as loosening
eligibility requirements for part-timers.
• USE OF PLATFORMS LIKE PUBLIC MEETINGS AND
ANNUAL DAYS: In Mr. Scott's speech at this year's
(2006) annual meeting, he used an Edelman-inspired line
with political echoes: "This company is committed to
working families."
• Since Edelman's hiring, Wal-Mart has issued at least 44
press releases mentioning working families to describe its
customers and employees.
• Later in the next year, Edelman booked Mr. Scott in
several unfamiliar forums, such as Mr. Sharpton's radio
show, where the CEO fielded questions from listeners.

• ENVIRONMENTAL CONCERNS: In July, Mr. Dach

arranged for former Vice President Al Gore to speak about

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 environmental issues and screen his global-warming
movie "An Inconvenient Truth" at a quarterly meeting of
Wal-Mart employees and environmental groups. Mr.
Gore's camp initially had concerns about Wal-Mart's
sincerity on the issue, but Mr. Dach helped allay them.
"Leslie brings some credibility and integrity," said Roy
Neel, Mr. Gore's chief of staff.
• Wal-Mart promoted a variety of its so-called "eco-friendly"
products at the MTV network's TRL store in Times Square
that include miniature bottles of laundry detergent and
lead-free laptops. MTV will also be delivering various on-
air messages involving environmentally sound items sold
at Wal-Mart in an effort to educate young people on
sustainability.Wal-Mart is just one of the household names
with a spotted environmental history campaigning on a
green platform.

• Wal-Mart has decided to bring Mr. Dach in-house. Mr.

Dach was already so intimately involved in planning that
he sometimes heard of key developments within Wal-Mart
prior to the company's own senior PR staffers, according
to people familiar with the situation.
• WAR ROOM: The company erected a full-scale PR "War
Room," comprised of ex-Bush and Clinton campaign
staffers, for rapid-response attacks on critics.
• USE OF INTERNET: Wal-Mart's campaign is targeting the
Internet generation's most pressing concern, the
environment.
• AD-CAMPAIGNS: Wal-Mart's new ad campaign will
feature two different commercials. One :60 commercial
details late company founder Sam Walton's vision for his
stores. A :30 ad centers around Wal-Mart's health
insurance plans for its employees. The world's largest
retailer is launching a new ad campaign defending the
company's reputation. Wal-Mart has been heavily
criticized over the years by everyone from labor unions to
politicians.
• SLOGANS AND PUNCHLINES CHANGED: "Save Money.
Live Better." That's the Wal-Mart slogan replacing "Always

56
 low prices" after a 19 year run. Wal-Mart is launching a
new ad campaign with the new slogan. Commercials aim
to show consumers how shopping at Wal-Mart and "saving
money on the little things" can add up for families.
• REFERENCE TO AUTHENTIC REPORTS: Research
company Global Insight's 2006 report shows Wal-Mart
saves families $2,500 each year, which adds up to $287
billion in savings for all of its customers. That's an
increase of 7.3 percent since 2004 when the report
showed a savings of $2,329 per family. Wal-Mart uses this
information in its new ads to promote the "Save Money.
Live Better" slogan.
• HIRED NUN’S AND ADVISORS: Public relations have
played a major part in Wal-Mart's efforts to quell criticism
over its labor practices that include denying employees
certain health benefits. In the past year the retailer has
hired both a nun and an adviser to Bill Clinton to improve
its image.

PROBLEMS ASSOCIATED WITH

WALMART’S PR
1. REACTING TOO LATE AND NOT TAKING A STAND – there
have been occasions when Wal-Mart hasn't taken a stand
on key issues and allowed the public to think in whichever

57
 direction they want to. At times they have reacted too late
on an issue and thus, have suffered considerable damage.
An example for this is "The homo-sexualist activism was a
burning issue in the US some time back and Wal-Mart
issued the statement "Wal-Mart does not have a position
on same sex marriages and we do not give preference to
gay or lesbian to our suppliers. Wal-Mart does have a
strong commitment to diversity among our associates and
against discrimination everywhere" after issuing this
statement came the report about wal-mart contributes
60000$ to pro-homosexual employee advocacy group.
Thus, it ended up facing the wrath of both the groups,
those in favor as well as against the GLBT policies (Gay,
Lesbian, Bisexual and Trans-gendered). For years Wal-
Mart did little to promote itself as a positive social force,
believing its low prices would speak for themselves. But as
it mushroomed to become one of the world's biggest
companies -- with 6,700 stores and $312 billion in sales
last year -- it increasingly felt the sting of public criticism
and pressure to fight back.

2. LACK OF CREDIBILITY - Doubts have been raised over the

credibility of the people associated with Walmart's PR
campaigns. Example – Mr. Young (Former chairman of
Working Families for Wal-Mart, a nonprofit organization
funded by the retail giant to combat criticism of the
company.) The people hired by Wal-Mart for their PR
campaigns or the company's executives have often made
irresponsible public remarks thus giving rise to new PR
problems without solving the previous ones.

3. LACK OF REAL ARGUMENTS IN DEFENSE OF REAL ISSUES –

Whenever faced with a problem with any of its publics
Wal-Mart has come up with make – up campaigns as their
PR response to those problems. The issues that were
affecting Wal-Mart's publics: low wages, insufficient health
insurance, denial of fundamental workers' and trade union
rights, human rights violations etc. have remained as it is.

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 No concrete action was taken to remove the causes that
were creating the issues.

4. ASYMMETRICAL NATURE OF THE CONFLICT - The reason

Wal-Mart is losing this battle is because of the
asymmetrical nature of the conflict. The Wal-Mart
adversaries are willing to do what ever is necessary to
hurt Wal-Mart, while on the other hand, Wal-Mart is
unwilling to defend itself effectively against these attacks
AND more importantly, assertively manage their
reputation in the future to prevent attacks like this. With
the advent of citizen media, and the willingness of special
interest groups to engage in increasingly hostile tactics, a
new set of rules are called for. Traditional PR doctrine is
woefully unprepared to fight these battles.

5. UNABLE TO CONTROL THE ONLINE CRITICISM CREDIBLY –

Wal-Mart has not been able to realize the potential of their
customers, whose voices now have widely distributed
forums for complaints or praise, to become either brand
partners—or brand message hijackers.

6. NO ADEQUATE MEDIA MANAGEMENT: very less no of

press releases and no control over the text being printed
in the newspapers and research reports being published
on a regular basis. A very weak content analysis done on
behalf of company’s PR.

7. NO EFFORT TO CONTROL THE CONTENT OVER THE

INTERNET : The content over internet went to such an
extent that the normal Google results for a "Wal-Mart"
search yielded mostly unflattering material, potentially
overshadowing the company's own sites.

8. LACK OF CORPORATE SOCIAL RESPONSIBILITY –Wal-Mart

has never involved itself into any concrete socially
responsible activities. Wherever it has involved itself has
lacked the social philosophy and was done with a purpose
such that they couldn’t change their greedy vulture like

59
 corporate image. Even their charitable acts came under
the lenses of doubt of the public and hence were not as
successful.

9. LACK OF PR TRANSPARENCY: Use of fake blogs and fake

activities that were assumed to help Wal-Mart in solving
some controversies and improving the battered image
proved absolutely against Wal-Mart only. People started
seeking doubts on sincerity of Wal-Mart.

10. Wal-Mart distancing itself from the civil rights icon

such that Wal-Mart once found itself in a spot no company
wants to be in -- needing a PR campaign to defend its PR
campaign.

RECOMMENDATIONS
 While Wal-Mart’s public affairs strategy works well
with its corporate strategy. It is felt that there are
some recommendations which could still make the
company work better. After studying Wal-Mart’s PR
activities we make the following recommendations.

 Wal-Mart has often been criticized for their

opposition to allowing their employees to be
unionized. Wal-Mart needs to clarify their reasons for
their opposition to unionization.

60
 The public affairs strategy must also address the
negative feelings harbored by some groups who feel
that Wal-Mart is encroaching into far too many other
sectors retail than it should. These concerns must be
addressed if Wal-Mart is to enjoy continued success
in creating positive name recognition. While
addressing this issue, the Wal-Mart executives have
often said that ”INCOMPETENCY” is the reason for
the failure of small retailers. The communication
made for this purpose should not be strident as it has
been in the past.

 Wal-Mart needs to take concrete actions to deal with

the major issues affecting the organization. The
organization has often been accused of doing make-
up campaigns to temporarily deviate the attention of
the public from the main issues. This strategy has
failed time and time again. Hence, there is a need to
take actions that will communicate to their publics
that some real actions are being taken to resolve the
issues.

 There is lack of consistency in the communication

made by the company on a significant issue that is
affecting a large group of people. For example –
Andrew Young making a highly controversial
statement that was contradictory to all the other
communications that were made by the company on
that particular issue. Wal-Mart can to do better by
ensuring the basic rules of PR Communication.

 There is a huge positive side to Wal-Mart. Wal-Mart

can deal with the torrents of criticism by
communicating the positive activities. For example
how Wal-Mart’s influence on suppliers has helped
bring about key changes that are positively affecting
the environment (Use of smaller detergent bottles of
double-strength liquid detergent - a change that will

61
 reduce the use of plastics, water and fuel), the
socially responsible behavior of the organization of
the organization in helping the U.S deal effectively
with the aftermath of the Katrina Hurricane.

 It is also essential that the PR actions and

communications should be targeted at the right
public. It is important to notice the people who are
complaining about the operations of Wal-Mart. These
people are not the one million plus customers of Wal-
Mart. The people criticizing Wal-Mart are the so
called elite of the society who believe that Wal-Mart
is not meant for them.

 Wal-Mart needs to deal with issues proactively. They

have often reacted too late and thereby, had to bear
the brunt of the consequences. There is a need for
them to extensively scan the environment for issues
that affect them and then determine their PR
strategy on that issue so that the desired response
can be obtained by taking the required action.

CONCLUSION
As far the size of Wal-Mart’s publics is concerned, it is amongst
the biggest organizations in the world. There are a large
number of people that are affected either positively or
negatively by every single action taken by Wal-Mart. This
public consists of not only the parties directly affected by Wal-
Mart but also the people who are indirectly affected by the
organization, for example the employees of Wal-Mart’s
suppliers, the suppliers of Wal-Mart’s suppliers and their
employees and a large number of other groups. Thus, the
number of Public Relations issues faced by Wal-Mart is more
than many other organizations that are earning the same or
even a higher level of profits. Therefore the extent and the
nature of PR activities required for Wal-Mart is different from
those required for other organizations.

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Over the years, Wal-Mart has been involved in a number of
controversies. Today in the U.S a large number of people
perceive it as a greedy giant that is crushing its employees,
destroying local businesses and is responsible for a host of
problems in the U.S. There are several blogs, websites, groups
that are openly asking people to stop shopping at Wal-Mart.
Wal-Mart has till now managed to maintain a good rate of
growth and has been able to provide a rate of return on the
investments made by its investors. But maintaining their
position of the Second best organization in Fortune 500 is only
going to get more and more difficult for Wal-Mart.

Wal-Mart has faced a large number of controversies. The PR

actions and communications undertaken to deal with these
controversies have been poor to say the least. Most of their PR
campaigns have led to the creation of a need for even more PR
campaigns.

But the big question is “How has Wal-Mart managed to remain

so successful even though the Publics Relations hasn’t been so
good. The answer to that question is at that Wal-Mart is
offering its products at the lowest rates and that it is satisfying
the needs of a large low income population of the U.S.

A major criticism of Wal-Mart’s PR strategy is that they haven’t

done anything concrete to remove the issues affecting their
publics. The major issues facing Wal-Mart are low wages,
pressure on suppliers to reduce costs, pressure to increase
productivity etc.. All these issues are cost based. Resolving
these issues will mean higher wages and higher cost of raw
materials and this in turn will lead to higher prices, which in
turn will affect the organizations competitive edge and
ultimately its success. Thus, the situation is a tricky one for
Wal-Mart.

Their success in the future will depend on how effectively they

balance these two conflicting issues.

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 BIBLIOGRAPHY
WEBSITES

• http://en.wikipedia.org/wiki/Wal-Mart
• www.sourcewatch.org/index.php?title=Wal-Mart_Stores
• en.wikipedia.org/wiki/Criticism_of_Wal-Mart
• money.howstuffworks.com/wal-mart.htm
• www.city-data.com/forum/politics-other-controversies/23107-walmart-
evil-empire.html
• walmartwatch.com/issues/supplier_relationships/
• www.walamrtwatch.com
• www.dissenting.org/national.html
• www.wakeupwalmart.com
• mike-pereira.com/subpage/docs/Wal-Mart.htm
• www.hbs.edu/news/news.html
• workingfamiliesforwalmart.com/

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 • www.edelman.com/speak_up/blog/archives/2006/10/a_commitment.html
• www.bloggersblog.com/corporateblogging/
• socialistunity.blogspot.com/2007_02_01_archive.html
• www.stevensilvers.com/stakeholder_relations/index.html
• www.ethicsworld.org/archivednews.php
• woscenarios.typepad.com/maneuver_marketing_commun/2005/12/assym
etrical_co.html
• www.forwalmart.com/

MAGAZINES ARCHIVES

• Business Week, Issue - Jan 11, 1999 .

• Business Week, Issue - Oct 6, 2003
• Wire Tap Magazine , Issue - Aug 16, 2005
• Vogue magazine, Issue - Sept 01, 2005
• Fortune, Issue - Aug 7, 2006

BOOKS

• “THE WORLD IS FLAT” authored by Thomas Friedman, Flattener 7 -

Supply Chaining, 2006 edition, pg 151.

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