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Ashwin Chandrashekar S (10BSP0574) A DENT IN WAL-MARTS PUBLIC IMAGE: THE PR STRATEGY CASE ANALYSIS Wal-Mart has emerged as the

largest retail store in the world with its low price strategy and widespread presence. As the company grew it also began to draw attention for all the wrong reasons. Let us analyze the case from business ethics point of view. The separatist view of ethics says that the primary objective of business is profit maximization, Morality and ethics has no role in business. We can say from the case that WalMart was operating from separatist point of view, Wal-Mart in its pursuit of offering low prices had put pressure on its suppliers to cut down cost. To meet the demands, the suppliers increasingly shifted to outsourcing and they made workers to work overtime in poor conditions and paid less. To be an ethical organization, the Espoused Values and Values in Practice should be in alignment, but in case of Wal-Mart there was a huge gap between the two. Though the company was providing goods at low cost as stated, the company was definitely not working for everyone as projected in PR campaigns. There were reports of company exploiting the employees in terms wages paid. Lawsuit was filed against the company for Gender discrimination at the work place and on an average there were 3 lawsuits against the company every day. Ethics and Stakeholder theory states that an organization should pay attention to the needs and rights of all stakeholders of its business in ethically responsible manner. Wal-Mart we may say was paying attention towards its customers by providing goods at the low price but they were exploiting the other stakeholders like forcing their suppliers to cut costs and the employees were made to work overtime and were underpaid to achieve the economies of scale, also when compared with its competitors Wal-Mart was paying 30% less to its employees. Both business and the employees have certain responsibilities towards each other, some specific responsibilities of organizations towards their employees are: provide adequate

compensation, provide better working environment, be honest in communications, engage in negotiations when conflicts arises and avoid discriminatory practices. We can see from the case that Wal-Mart had failed in responsibilities towards their employees in all the aspects mentioned above, the company underpaid its employees, it had unclear and undocumented labor practices and there was lawsuits against the company for discriminatory practices Also from the case we can see that the company had failed in responsibilities towards their suppliers as well, Wal-Mart was pressuring its suppliers to cut down cost so as to achieve economies of scale. Responsibilities towards consumers include providing goods/services at right quality, price, quantity, place and time which Wal-Mart was providing fairly well. According to Carrolls Four-Part Model organizations should be economically, legally, ethically, and philanthropically responsible. Wal-Mart was economically responsible, but the company was not legally and ethically responsible. Federal raids brought in light that there were 200 workers with illegal immigration licenses which implies that the company was not obeying the law and there were ethical issues as discussed above in ethics and stakeholder theory. Talking about Philanthropic responsibilities, initially the company was not into it but later on to makeover their image in the eyes of the public the company began contributing to philanthropic activities like offering scholarships for journalistic studies in about 10 universities national wide. An ethical organization should not discriminate among its employees on the basis of gender, race etc, But from the case it seems that Wal-Mart was involved in discriminatory practices, a lawsuit on behalf of 1.6 million women workers in the company was filed which charged the company of having discriminated against women workers regarding pay and promotion. Business can help its employees who are in problems by giving Remedial benefits like loans, medical assistance etc which are clearly distinguished from standard remuneration. The ultimate purpose of such assistance by any business is to help itself by helping the employees in need, also this leads to higher productivity, sense of support and confidence. From the case it

is evident that wide remedial benefits apart from standard remuneration like healthcare insurance, profit sharing:401(k) plan, merchandise discounts, company-paid life insurance etc. were offered by Wal-Mart, more than 50% of associates said that the benefits package was a very important factor in accepting the positions in Wal-Mart according to a survey conducted. Corporate Governance mainly focuses on the best ways to manage risk to the business. WalMart paid $1 million as political donations to have support of the government. The company accelerated its image makeover efforts by launching more testimonial advertisements, one more thing Wal-Mart can do is to develop better relations with local press and media, which began to erect hurdles for Wal-Marts expansion in local communities. Wal-Mart launched a website that had links to all possible information on the company, its labor policies, lawsuits, benefits to employees and philanthropic activities The company was surviving the worst of bad publicity to some extent due to good Fortune ranking of the company. The company which had been totally internal focused since inception had to start reaching out by spending on unrealistic and glossy advertisements. This is not enough to restore the lost image; apart being defensive the company should substantiate them with facts which would not happen until the company brings changes in its labor policies. The image of the company also depended on the prevailing lawsuits against the company. The above case shows us how important it is to have good corporate responsibility and corporate governance in place for businesses to succeed.

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