SOLUTION: HR 353 Ohio Christian SWOT Analysis Based On HR Practices Research Discussion

One Nation Under Walmart” Please respond to the following:Read Case 4.3: One Nation under Walmart, located here or on page 144 in your textbook. Next, choose two (2) of the five (5) discussion questions located at the end of the case. Formulate your response and post to the Week 4 discussion. Respond to a peer who answered at least one (1) different question than you did. Case 4.3
One Nation under Walmart
43075_ch04_ptg01_hr_114-149.indd 144 8/13/12 1:08 PM
chapter four The Nature of Capitalism    145
opening more stores all the time as it moves beyond its
stronghold in the rural South and Midwest and into urban
America. In fact, 82 percent of American households purchase
at least one item from Walmart every year. As a result,
the company’s marketplace clout is enormous: It controls
about 30 percent of the market in household staples; it sells
15 percent of all magazines and 15–20 percent of all CDs,
videos, and DVDs; and it is expected to control soon over 35
percent of U.S. food sales. For most companies selling consumer
products, sales from Walmart represent a big chunk of
their total business: 28 percent for Dial, 24 percent for Del
Monte, and 23 percent for Revlon. Walmart is also responsible
for 10 percent of all goods imported to the United States
from China.83
The good news for consumers is that Walmart has risen to
retail supremacy through the bargain prices it offers them.
The retail giant can afford its low prices because of the cost
efficiencies it has achieved and the pressure it puts on suppliers
to lower their prices. And the larger the store gets, the
more market clout it has and the further it can push down
prices for its customers.
Everyone, of course, loves low prices, but not everyone, it
seems, loves Walmart. Why not? Here are some of the
charges that critics level against the retail behemoth:
• Walmart’s buying power and cost-saving efficiencies force
local rivals out of business, thus costing jobs, disrupting local
communities, and injuring established business districts.
Typically, for example, within five years after a Walmart supercenter
opens, two other supermarkets close. Further, Walmart
often insists on tax breaks when it moves into a community,
so its presence does little or nothing to increase local tax
revenues.
• Walmart is staunchly anti-union and pays low wages. Its
labor costs are 20 percent lower than those of unionized
supermarkets; its average sales clerk earns only $8.23 an
hour, and most of its 1.4 million employees must survive without
company health insurance. Small wonder that employee
turnover is 44 percent per year. Moreover, because of its
size, Walmart exerts a downward pressure on retail wages
and benefits throughout the country. Critics also charge that
Walmart’s hard line on costs has forced many factories to
move overseas, which sacrifices American jobs and holds
wages down.
• Government welfare programs subsidize Walmart’s povertylevel
wages. According to one congressional report, a twohundred-employee
store costs the government $42,000 a
year in housing assistance, $108,000 in children’s health
care, and $125,000 in tax credits and deductions for lowincome
families. And internal Walmart documents, leaked to
the press, confirm that 46 percent of the children of Walmart’s
1.33 million workers are uninsured or on Medicaid. The document
also discusses strategies for holding down spending on
health care and other benefits—for example, by hiring more
part-time workers and discouraging unhealthy people from
working at the store by requiring all jobs to include some
physical labor.
• As Walmart grows and grows, and as its competitors fall by the
wayside, consumer choices narrow, and the retail giant exerts
ever greater power as a cultural censor. Walmart, for example,
won’t carry music or computer games with mature ratings. As
a result, the big music companies now supply the chain with
sanitized versions of the explicit CDs that they provide to radio
stations and that are sold elsewhere. The retailer has removed
racy magazines such as Maxim and FHM from its racks, and it
obscures the covers of Glamour, Redbook, and Cosmopolitan
with binders. Although many locations offer inexpensive firearms,
Walmart won’t sell Preven, a morning-after pill—the only
one of the top ten drug chains to decline to do so.
For these reasons, Walmart’s expansion is frequently
meeting determined local resistance, as concerned residents
try to preserve their communities and their local stores and
downtown shopping areas from disruption by Walmart
through petitions, political pressure, and zoning restrictions.
As one economist remarks, for Walmart “the biggest barrier
to growth” is not competition from rivals like Target or WinnDixie
stores but “opposition at the local level.” As a result,
Walmart has begun responding to the criticism that it is a
poor corporate citizen and miserly employer by improving
employee health insurance coverage and adopting greener
business practices. And even its usual critics applauded
when the company responded rapidly to Hurricane Katrina,
sending truckloads of water and food, much of it reaching
residents before federal supplies did.
43075_ch04_ptg01_hr_114-149.indd 145 8/13/12 1:08 PM
146    part two American Business and Its Basis
First Lady Michelle Obama teamed up with Walmart on an initiative that will
result in the company offering a larger selection of healthy foods at more
affordable prices. What does such an alliance suggest about the relationship
between business and society and between business and politics?
Mark Wilson/Getty Images News/Getty Images
When it comes to Walmart, Professor John E. Hoopes
of Babson College encourages people to take a long-term
view: “The history of the last 150 years in retailing would
say that if you don’t like Walmart , be patient. There will be
new models eventually that will do Walmart in, and
Walmart won’t see it coming.” And, indeed, in recent
years the company’s sales growth has slipped as the
Internet has changed people’s shopping habits and as
other discounters have done a better job of attracting
affluent consumers and providing higher quality and better
service.
In the meantime, where you stand on Walmart probably
depends on where you sit, as Jeffrey Useem writes in Fortune
magazine: “If you’re a consumer, Walmart is good for you. If
you’re a wage-earner, there’s a good chance it’s bad for you.
If you’re a Walmart shareholder, you want the company to
grow. If you’re a citizen, you probably don’t want it growing in
your backyard. So, which one are you?”

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