Preparing to be the Stakeholder Relationship Manager: The Case of Wal-Mart
Authors: Scully, Maureen; Roberts, Alex
Source: The Aspen Institute Center for Business Education
Year: 2007
Abstract:
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This Teaching Module was authored and prepared by Dr. Maureen Scully, Assistant Professor of Management at UMass Boston's College of Management and Consultant to the Aspen Institute Center for Business Education, and Alexander Roberts, Program Manager of the Aspen Institute Center for Business Education.
The mission of the Aspen Institute Business and Society Program is to generate future business leaders who can set the world on a path towards a sustainable global society. Managers at all levels and functions will need to be skillful at managing the social impacts of business. Managers whose charter is explicitly to build relationships with stakeholders as part of corporate strategy will especially need these skills.
Wal-Mart is a case of an organization with a core strategy that appears successful financially but whose future is potentially threatened by a range of stakeholders who question the social impacts of this business model. The job description for Wal-Mart's newly created "Senior Director for Stakeholder Management" seeks "an innovative, out-of-the-box thinker" who can work on the company's commitments in areas including labor and wages, health care, product sourcing, and the environment. Are business schools today training leaders who could fill this role?
This Teaching Module gathers a range of readings in the areas such an executive would need to address, using Wal-Mart's issues as illustrations. The readings reflect a range of viewpoints, supportive of Wal-Mart and its proposals, critical of Wal-Mart and its impact locally and globally, or attempting to give a balanced assessment of Wal-Mart.
The first set of readings provides some core and background material, then we provide readings on each of the stakeholder groups. A general bibliography of additional sources follows.
Introduction
- An HBS case,Wal-Mart, 2005, by David B. Yoffie and Barbara J. Mack, on Wal-Mart's core strategy (stores, products, staffing, location, etc.)
- Business Horizons article by Thomas Hemphill providing a multiple stakeholder analysis of Wal-Mart: Rejuvenating Wal-Mart's Reputation
- A Business Week Online article about Wal-Mart's recent sluggish growth, its disconnect between it's upper brass and store management, and opinions of managers on what can be done to right the ship: How to Fix Wal-Mart? Ask Its Managers
- A Speech by and an Interview with CEO Lee Scott outlining Wal-Mart's aspirations and new approaches
- A 2006 research report by Elena G. Irwin and Jill Clark, The Local Costs and Benefits of Wal-Mart, assesses the impacts on employees, local communities, supply chains, other businesses, and the built environment.
Labor and Wages
These articles critique or support Wal-Mart's wage strategy. Two empirical articles from the academic literature assess the net impact of job creation and job loss when a Wal-Mart store opens.
- Nelson Lichtenstein's book –a labor historian's analysis of Wal-Mart
- Alan Reynolds comes to Wal-Mart's defense regarding its impact on local economies: Should Wal-Mart Hike Prices?
- Emek Basker surveys Wal-Mart's economic impact on the county level: Job Creation or Destruction?
- A Center for American Progress article, Wal-Mart: A Progressive Success Story, that lauds Wal-Mart for its benefit to the economy while asking if it can do more for its workers, by Jason Furman.
Health Care
Wal-Mart is notorious for giving its employees sub-par benefits. Recently, government has stepped in to legislate this issue in particular. Should they, however? The following articles present the situation of the Maryland Legislature, who recently passed a bill that would require Wal-Mart exclusively to pay more for its employees healthcare, and whether or not the legislature's actions are good or bad for the workers and the economy.
- A general overview of the Maryland Legislature's controversial decision to pass the Wal-Mart bill
- The Director of Health Policy Program of the New America Foundation, Len Nichols, on why the Maryland Legislature's decision is far from a real decision: Wal-Mart Bill is No Solution
- Cato Institute fellows Steve H. Hanke and Stephen Walters on how the "Wal-Mart" bill actually hurts Maryland's working poor rather than helps
- Reed Abelson of the NY Times on how Wal-Mart's struggles with health care costs mirror America's growing struggle with health care: Everyday High Health Costs; One Giant's Struggle Is Corporate America's, Too
- An update on the Appeals Court's overturning of the Maryland law: Appeals Court Rules for Wal-Mart in Maryland Health Care Case
Suppliers, Competitors, Communities
Wal-Mart has an undeniably large global footprint. It is well known that they have enormous quantities of goods made overseas at low cost and that they have the power, to a certain extent, to demand certain prices from their suppliers. What is not as well known, however, is what the effects of Wal-Mart's policies are. The following pieces weigh Wal-Mart's economic footprint in a global context.
- Frontline program that criticizes Wal-Mart's strategy of "muscling manufacturers," such that long-standing, successful U.S. plants close and jobs move overseas: Is Wal-Mart Good for America?
- Wal-Mart defenders argue that low-wage employees are helped by low prices; the impact on consumers is evaluated in a 2006 working paper "Consumer Benefits from Increased Competition in Shopping Outlets: Measuring the Effect of Wal-Mart", by Jerry A. Housman and Ephraim Leibtag
- A 2006 research study by Georgeanne M. Artz and Kenneth E. Stone, Analyzing the Impact of Wal-Mart Supercenters on Local Food Store Sales
- Wal-Mart and Vancouver, Canada, by Suzanne van der Porten, provides a great example of how Vancouver's residents dealt with Wal-Mart's arrival in Vancouver.
Environment
Wal-Mart's green strategy is in its infancy but is influencing thousands of its contractors and changing the way hundreds of thousands of people do business. The following pieces summarize the wide ranging opinions regarding Wal-Mart's newfound care for the environment.
- An article from Greenbiz.com on Wal-Mart's drive towards sustainability: Wal-Mart Sets 100% Sustainable Fish Target for North America
- A critique of Wal-Mart's environmental practices: Wal-Mart and the Environment
- Adam Werbach, the once 23 year old president of the Sierra Club, and his journey out of the environmental movement and into the world of Wal-Mart
- A 2007 HBS case, by Erica Plambeck and Lyn Denend, follows up on CEO Lee Scott's landmark 2005 speech and assesses Wal-Mart's Sustainability Strategy
For more articles and cases on CasePlace.org related to Wal-Mart that are not part of this collection, please click : here.
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