Walmart

In the modern world, social position of the company has an increasing influence on its reputation, image and, therefore, company’s profit. Assessing company’s activities, the society considers not only production and financial indicators but also how the organization conducts its business and cares about employees, and how its activity corresponds to the interests of other market participants and society as a whole. It is impossible to imagine the United States without Walmart trading network. For fifty-five years of its existence, Walmart Corporation has won the trust of American consumers, showed what an effective business is to the whole world and made its founder the richest man in the world. Despite a lot of criticism, scandals around the company and financial loses, Walmart is the absolute leader in a retail trade in America as well as the giant company making a great social and economic contribution due to its CSR policy.

Walmart Stores is an American retailing corporation consisting of three main divisions, namely Walmart USA, Walmart International Shops and Sam’s Club, covering various types of stores, from specialized minimarkets to large hypermarkets. More than 11,000 Walmart stores successfully run in 28 countries (Goldman, 2011). Walmart tops the list of the largest companies in the world. The number of employees has exceeded two million, and incomes transcended tens billions. Furthermore, there is the Internet shopping portal Walmart.com selling various products with the ability to deliver anywhere in the world. Walmart Foundation continuously conducts charitable activities. Walmart strategy consists of the maximum range of goods and the minimum, close to wholesale, prices. The large turnover of the company allows Walmart to dictate its terms to many suppliers. The arrival of Walmart store in a small town often means the closure of all other stores in this village because not everyone can compete with a giant (Neumark, Zhang & Ciccarella, 2008).

The history of Walmart is a story of stunning success. In 1962, in Rogers, Arkansas, Sam Walton opened his first store that became a prototype for all stores in Walmart network (Goldman, 2011). Walton’s Five & Dime was the original name of the store. It was a large supermarket where people could buy food and many household products. A distinctive feature of Walton’s Five & Dime was its opening on the outskirts of the city in a residential area. Walton’s initial concept was to provide the inhabitants of suburbs with inexpensive quality goods (Dodds, 2015). Local residents liked this supermarket because it was as big as supermarkets in megacities, but the prices were much lower and there was a warm, almost family atmosphere. From the very beginning, Walmart had its own philosophy with the basic credo “Always low prices”. This, in fact, is the main secret of the company’s success. Eventually, the buyer receives information about where the cheap goods are sold and becomes a regular visitor to Walmart stores.

Five years later, in 1967, Walton owned 24 stores all over Arkansas while the income from them exceeded 12 million dollars a year (Goldman, 2011). Walton began expanding the network beyond his own state. Walmart stores appeared in Oklahoma and Missouri. The principle of all the retail network outlets was one: the maximum possible number of products with minimum prices. Walmart trading network started as stores in the “family” format. Together with his wife, Sam Walton managed the stores without hiring third-party directors or administrators. Each visitor received warm and friendly attitude, which formed loyalty to the brand. Surprisingly, Walton managed to maintain this approach in large supermarkets. He skillfully formed a special corporate culture among his personnel that assumed that each visitor should feel himself as at home and could share his feelings, exchange tips with the seller and discuss the latest gossip or news. Moreover, Sam Walton insisted that the employees take the initiative. Any proposal of each employee was considered and some were applied including free parking from Walmart stores, the ability to roll a shopping cart to a car and others (Dodds, 2015). In the late 1980s, the network operated in 27 states and began to spread its influence in large cities (Goldman, 2011). Walton opened his first Supercenter in Washington, Missouri, in 1988 (Dodds, 2015). In the early 1990’s, Walmart’s annual sales volume reached $ 50 billion and by the mid-1990’s, Walmart had become the absolute leader among retail companies in the U.S (Goldman, 2011). Walmart subsequently entered the international market. Though Walmart expanded into Canada and Latin America initially, nowadays Walmart network operates in 28 countries all over the world (Buss, 2017).

The relationship with suppliers is one of the main achievements of the company. In the process of Walmart’s development, Sam Walton completely abandoned the intermediaries that artificially raised prices (Dodds, 2015). Originally, this approach looked disastrous considering the complexity of supply chain testing. However, the situation changed with Walmart’s growth, and most of the manufacturers were willing to contact Walton on their own understanding the benefits of such cooperation. Eventually, the Walmart incorporation gained such credibility that becoming the part of the Walton’s suppliers club was already the best way to promote the product to the market. The product could become fantastically popular only because it appeared on Walmart’s shelves. The scale of the company reached such a level that its management could control some producers, forcing them to increase the output of certain types of goods, to change the packaging, to reduce the price, or prohibit the sale of products to other networks (Goldman, 2011). Walmart brand will be much criticized for this.

The growth of Walmart and its access to the international markets did not save the company from a series of high-profile scandals. The trade unions, as well as Christian and “green” organizations, have repeatedly blamed Walmart incorporation for violating environmental norms, bad attitudes to the personnel (small salaries, poor medical insurance), dishonest business, and discrimination against women, national and sexual minorities (Kannani, 2014). A number of critics claimed that Walmart forces small traders out of the market, including small family stores. The decline of smaller retail firms due to the arrival of the network in the city is called “Wal-Mart effect” (Neumark et al., 2008). In addition, some individuals and organizations accused Walmart of coercing suppliers provide lower purchase prices. Furthermore, Walmart Company is charged with violation of American traditions that assumed the location of all major establishments and shops in the downtown area.

In the early 1990s, when the flow of criticism reached its peak, Sam Walton wrote memoirs where he described the history of creating the largest retail network in the world. Opening his shops in suburbs, Walton did not even think of breaking American foundations. He simply built them where the land is cheaper and taxes are lower (Dodds, 2015). At the same time, Walton offered low prices and saved billions of dollars in the wallets of local residents, not to mention the hundreds of jobs offers. Additionally, Walton mentioned his charitable work, which he had previously preferred keep silent. Sam Walton was born and raised in a small provincial town and knew about all the problems faced by inhabitants of such cities. Therefore, starting business, he transferred money to various charitable foundations to form scholarships for students. From time to time, he was selling goods to the poorest people and donating money to zoos, clinics, libraries and theaters. Walton did not ignore even the mayors of small towns. He established the American Hometown Leadership Award that is granted to those heads of suburban municipalities who fulfill long-term projects in their provinces (Kannani, 2014).

Currently, the Walmart Foundation is engaged in five directions that are sustainability, disaster relief efforts, women’s economic empowerment, hunger relief & healthy eating, career opportunities, and supporting nation’s veterans and military families. Sustainable development is very important in Walmart’s CSR policy. Nowadays, there is a strong demand for organic food, and a large number of small farmers wants to meet this need but do not have resources and possibilities to do it. This problem is particularly relevant in the Mississippi Delta region. The Walmart Foundation announced a partnership with the non-profit organization Winrock International that works with people and small enterprises to expand and increase economic opportunities, as well as conserve natural resources. The Walmart Foundation donated $ 1 million to help small river delta farmers succeed by giving them access to resources, information and financial investments. In fiscal year 2016, intending to improve the opportunities for the retail promotion in the USA, Walmart has allocated $ 39 million for grants to support the Retail Opportunity Initiative (GRR, 2016).

The expansion of women’s economic opportunities is one of the largest charitable activities of The Walmart Foundation. Director of the Walmart Foundation Kathleen McLaughlin states that the majority of Walmart’s customers are women, which regulate more than $20 trillion of annual consumer expenses in the world. McLaughlin is convinced that support for women means maintaining families and the whole communities and economy. Provision of additional training, access to markets and the possibility of career growth are the main tasks of women’s economic empowerment. The Walmart Corporation intends to train 800,000 women in emerging markets and 200,000 lower-income women in the US thus helping them find good jobs. To support these goals, the Foundation donated $ 122 million for grants in 2016 (GRR, 2016). Moreover, The Walmart Foundation encourages programs that provide training for low-skilled workers and their willingness to work. The main goal of such programs is to help long-term unemployed people in the work breakdown as well as young specialists in obtaining the first job. The incorporation has allocated more than 800 scholarships to promote higher education (Kannani, 2014). In addition, Walmart is the main sponsor of the 2017 McGinnis Venture Competition, which is held at Carnegie Mellon University. The company gives startup opportunities to the young entrepreneurs. Presenting their business and ideas to the referees including Walmart leaders, students compete for $60,000 in funding (Buss, 2017).

In fiscal year 2016, Walmart donated more than $ 1.42 billion in support of extensive social and environmental activities (GRR, 2016). During the economic downturn in 2008-2009, Walmart has presented Money Card for low-income families to save their costs, which helped consumers to shop at low prices, increasing Walmart’s sales. From 2010, The Walmart Foundation implements the Fighting Hunger Together program that promotes the hunger overcoming activities. To stop hunger in America, the company donated $ 2 billion dollars (Kannani, 2014). Aiming to help Feeding America provide 100 million meals, Walmart organizes online acts of support, purchasing participating products and donating at the register (Buss, 2017). Moreover, Walmart embarked on a heath initiative to address the growing problem of obesity in America. The company has launched a nutritional value enhancement program that intends to reduce the number of calories, fats, salt and sugar in semi-finished products as well as provide lower prices for fruits and vegetables. Moreover, Walmart became the world’s largest seller of organic milk and fish.

Supporting nation’s veterans and military families and disaster relief efforts is no less important activity. The Foundation helps the heroes of America find work after their return to home. For this purpose, Walmart donated $ 10 million in 2010 and doubled this amount to $ 20 million in 2011 (Kannani, 2014). In the case of natural disasters, The Walmart Foundation works closely with organizations such as the Federal Office for Emergency Situations, the American Red Cross and the Salvation Army. The Foundation delivers the first necessities to the victims. After Hurricane Katrina in 2005, Walmart network organized a fast response to the disaster donating US$20 million in cash, 1,500 lorries of commodity, and food for 100,000 people as well as saving a job for every of its displaced workers (Kannani, 2014). In 2010, the Walmart Foundation donated over $1.5 million in relief aid for the victims of the Haiti earthquake (Kannani, 2014). In addition, on the 10th anniversary of Hurricane Katrina, the company committed to allocate $ 25 million over the next 5 years to improve public response to natural disasters (GRR, 2016). 

Since 2005, the company has taken a course to protect the environment (Kannani, 2014). Currently, Walmart is the largest “green giant” among its competitors. The company built ecological supercenters and began to grow products with a green label for sale. Using its power on the market, Walmart forced the suppliers to make eco-packaging and change work processes in order to spend fewer natural resources. The corporation invested half a billion dollars to reduce the energy consumption in their stores and the harmful emissions of their trucks. Furthermore, Walmart in the USA has disposed of 82% of waste materials, thus saving more than 1 million acres of wildlife. Walmart has successfully eliminated greenhouse gas emissions for 20 million metric tons (Hills, 2017).

Notwithstanding its shortcomings such as problems with expansion and frequent criticism from the public, Walmart realizes the ongoing changes and challenges with which businesses face in a fast changing world and, as a large international company, is aware of its impact on the economy, social life and environment. Walmart has always aimed to save people’s money for their better living. As the most powerful trade company, Walmart incorporation consolidates its business to help others, increase sustainability, create opportunity, and strengthen community. Walmart builds a model of the way business can regularly handle large issues via the all network. Moreover, strengthening society makes Walmart more powerful as well.