walmart corporate social responsibility recommendations

Project Recommendations

Walmart Project RecommendationsAngel Mojica

Southern New Hampshire University

1


Abstract

The purpose of this paper is to describe the implementation process of Walmart’s effort

to revitalize their corporate social responsibility plan. The plan is based on

recommendations made to Walmart after a careful review of how their current efforts

have fallen somewhat short of expectations. A few of the items listed in this paper are

offered with regards to a reorganized focus on the triple bottom line - people, profit, and

planet. The paper will show how the perception of Walmart as an entity that is strictly

profit driven is mostly a product of the media. Walmart has somewhat been forced to

change with the times and is doing so steadily and mostly quietly. We will finish by

showing how each of the three P’s is vital to the sustainability efforts of any company

from small businesses to large corporations.

2


Notice to External Stakeholders:

(ISO 26000 PPO SAG Social Responsibility) We recognize ISO 26000 as a reference

document that provides guidance for implementation socially responsible behavior.

For those that do not recognize ISO 26000, it is an international guideline for social

responsibility. The guidelines go well beyond the legal regulations and therefore we

feel that ISO 26000 will offer stricter controls for us to follow.

Walmart has been a leader in following legal limits pertaining to environmental

friendly sustainability since our inception. Despite this fact, we know that there are

steps that can be taken to strengthen our resolve in regards to ensuring a healthy

planet that will be available for generations to come. Many of our leading suppliers

are already following the ISO 26000 guidelines and we hope to have 50% of our

smaller suppliers by on board by 2020.

Notice to Internal Stakeholders:

Many of you know that (ISO 26000 PPO SAG Social Responsibility) we have applied

ISO 26000 as a basis to integrate corporate social responsibility into our values and

practices. Being that the framework for ISO 26000 is an almost living and breathing

document, we must regularly change our sustainability policies to keep up with the

updates that are made every five years.

Our goal is to make sure that we continue to be viewed of as a socially responsible

corporation and that our supply chain follow suit.

We recognize that this is an ambitious goal and anticipate the assistance of all of our

internal stakeholders. Change does not occur in a vacuum and the size of our

3


corporation may be a hindrance to the ambitious goals expressed to external

stakeholders.

Recommendations

People

Some of the biggest issues that keep being brought up when people talk about

Walmart employees are low pay and job security. At any one point, Walmart employs

1.4 million workers in the United States with hundreds of thousand new applicants

per day, which begs the question, “Why would someone want to work for Walmart if

it is as bad as people perceive?” Altner (2013) has a point of view that I feel

summarizes this difficult issue:

Many entry-level Walmart jobs consist of comparatively safe and non-strenuous

work such as stocking shelves, working cash registers, and changing price labels.

Walmart also pays competitive wages, which, for these jobs, are generally under

$12 per hour, because these positions require little or no work experience or

technical skills.

This tells me that people are not paid for the work they do, they are paid what their

time is worth. Little, or no, work experience and a lack of technical skills has

historically been associated with a teenager’s first job.

The consideration of allowing workers to join local unions is an idea that many

Walmart customers would like to see happen. The United Food and Commercial

Workers International Union (UFCW) has been a vocal advocate for the rights of

Walmart workers to unionize but this may not be such a great thing for customers.

4


People believe that unions protect employees, but in the end a company is able to

downsize at its discretion.

Planet

Since Walmart is the world’s largest retailer it should also be the world’s largest

recycler. This is not just recycling the cardboard and plastic containers for the

thousand of products on its shelves. Walmart should also be a leader in the recycling

of electronic devices.

Walmart sells more than just retail products with many of their stores also containing

a full line grocery store. Walmart Super Centers have come under fire for claiming

that many of its natural products are being labeled and sold under the organic label.

Walmart should focus on its organic food supply and clearly distinguish where it is

being sourced from.

Since Walmart is a worldwide retailer, it may have to comply with varying

environmental policies. Walmart should take use ISO26000:10 as its starting point in

order to ensure compliance with even the strictest of environmental laws. By

following the ISO recommendations, Walmart can form a uniform company wide

policy that can be used around the world. This will save the headache of following

different rules in different parts of the world.

Profit

Walmart has no issue when it comes to pulling in a profit. Despite this fact, there is

always room for improvement. One way to improve profit at Walmart stores would

be by protecting its inventory. Another way would be to make sure that employees

5


are properly trained. There are numerous incidents where lack of employee training

has led to questionable decisions and criminal behavior. Yam (2009) writes about two

Walmart employees that thought it would be a good idea to play a pornographic DVD

on the display televisions. How anyone could this this would be a good idea is

beyond my understanding. The fact that they were employees at Walmart gives

people reason to question other Walmart decisions, and the organization as a whole.

Implementation

People

Since Walmart employs about 1% of the total US workforce, the average age of their

employees is a bit higher than other retail outlets. Walmart has recognized this and

according to Lundberg (2016) beginning in 2016 more than 1.2 million Walmart U.S.

and Sam's Club associates will receive a pay increase under the second phase of the

company's two-year, $2.7 billion investment in workers. With the pay raise, Walmart

will no longer be paid minimum wage. Walmart should also offer tuition

reimbursement for its employees so that working retail could either be a stepping-

stone, or a career choice. This would allow Walmart to retain an educated workforce.

For example, a business degree could lead to management and human resource

opportunities, a marketing degree could lead to a position in in-store displays, a

criminal justice degree could help make security personnel aware of tricks that people

may try to use to steal, be that customers or employees. Walmart can also reach out to

minorities and women in order to offer educational and promotion opportunities,

which can be done by offering flexible schedules that meet the needs of a varied

workforce. Walmart should treat its employees as good, if not better, than the workers

6

http://search.proquest.com.ezproxy.snhu.edu/docview/1758304208?pq-origsite=summon&accountid=3783


of a union are treated. When a union worker states the have certain benefits because

of their union, it would be great for a Walmart to reply, “ I have the same benefits.”

This simple statement would be empowering to its workforce. It will also give

Walmart employees a reason to be proud to represent its company

Planet

Walmart can start its electronics-recycling program by offering certain discounts for

people who choose to recycle their televisions, computers, and other electronic

devices. This would be an incentive for people to recycle as well as shopping at

Walmart. It may cut a bit into their profit margin, but since Walmart profits average

$3B USD, it should not hurt so much. Also, since people who recycle will only get

the discount by shopping at Walmart, it is like trading in an obsolete unit in order to

buy an upgrade to that device. Who wouldn’t like to trade in an obsolete laptop or TV

for a discount on a new one you were going to buy anyway?

Walmart needs to reach out to certified organic farmers, and I would like them to

reach out to local farmers as well, for their produce and organic items. This would be

more expensive but these steps would change the way Walmart is viewed by organic

shoppers. There should be no reason for anyone to be able to question the integrity of

the food they are purchasing at Walmart. Masumoto (2010) shows that while it may

seem like an odd pairing, it’s a win-win situation for all involved, the organic

farmers, the consumers, and Walmart.

Profit

Walmart has to help change the way it is viewed. Instead of being viewed as place to

go for inexpensive items, it should be known as a place to go for quality items. In this

7


age of media, perception is reality, and people have the perception that Walmart will

do anything to save a dollar. People seem to disconnect the fact that when Walmart

saves, shoppers save.

Walmart has to invest in communities that it moves into. A simple gesture such as

building a small park for kids

8


Introduction

Walmart is a $462 billion behemoth of a corporation whose name and logo are instantly

recognizable by the average American shopper. It is known for low prices and for

carrying just about your entire daily household needs. With Walmart being such a fiscal

force in the US and around the world, it opens itself up to scrutiny on all levels of the

people, planet, and profit argument. While scrutiny is always biased based on the source

of the information there are some facts that Walmart cannot deny. Walmart has not

always been on the right side of the argument of either the people or planet argument, but

no one can refute its ability to pull a profit.

Many towns across the United States have seen the closure of local shops whenever

Walmart happens to open up nearby. The sheer size of Walmart allows it to purchase

items in bulk and at cheaper prices than the so-called “mom and pop” shops. Because of

this, people claim that Walmart is only concerned with profit and doesn’t care about the

issues of the individuals whose towns they settle near. Walmart retorts this argument by

employing hundreds of people at each of their stores. Despite this fact, Walmart has been

the subject of discrimination lawsuits based on gender and race. One was for sexually

discriminating against female employees by not offering fair promotion opportunities.

The other was for not paying overtime to employees who had worked more than the

allotted hours per week and were due to earn time and a half.

Walmart has a long and spotted history in regards of being environmentally responsible.

People claim that Walmart purchases many of its products from a global supply chain

that have either been bad to the environment, its employees or both. People argue that

9


Walmart cannot claim to be socially responsible when it continues to conduct business

with unethical companies.

10


Analysis of Issues

I. Personnel

Major stakeholders

o Investors – Walmart has made many people very rich. We will expand on how

and why Walmart differentiates its brand and whether or not its investors have

a say in the CSR policies or if the policies come from the CEO.

o Customers – Shopping at Walmart has become a way of life for some, hence

the term “People of Walmart”. Sam’s Clubs, a Walmart spin-off, have sprung

up around the United States to compete with BJ’s wholesale club and Costco

wholesale club. This has allowed the Walmart brand to reach a different

segment of the population.

o Employees – Discussion involving claims of sexual and racial discrimination

against Walmart by employees. This paper will also delve into allegations of

hostile work environments being raised whenever the topic of unionization is

brought up at Walmart stores.

o Suppliers – This will focus on the supply chain that Walmart uses for its day-

to-day business operations. There are companies all over the world that

benefit from being a Walmart supplier and their business practices will be

compared alongside Walmart’s CSR policies.

II. Environmental

Corporate Responsibility and Irresponsibility

o Walmart’s corporate environmental goals: Aiming for zero waste, and 100%

sourcing of renewable energy.

11


o Walmart has become the largest private solar power producer in the United

States.

o Walmart has become a large player in the organic food market. People claim

that Walmart is diluting the organic market by using

Short- and long-term effects of the current environmental policies

o Pioneering the solar panel movement for major retailers

III. Sound Business Practices (profit)

o Walmart stakeholders were introduced in the “Personnel” section of this

paper. In this section we will expand on the treatment of personnel and

whether or not stakeholders are treated differently based on their ranking in

the hierarchy. The assumption is that investors will be treated better than the

employees, and employees are treated well in comparison to their supplier’s

employees, Will’s 2006 article expands on some of these points.

12


References

Chen, R. and Meeks, M. (2011) Can Walmart Integrate Values with Value?: From Sustainability to Sustainable Business. Journal of Sustainable Development; Vol. 4, No.5. Retrieved from http://trace.tennessee.edu/cgi/viewcontent.cgi?article=1003&context=utk_retapubs

CityBusiness, S. R. (2006). Wal-mart alleged to have misrepresented organic produce. New Orleans CityBusiness, , 1. Retrieved from http://ezproxy.snhu.edu/login?url=http://search.proquest.com.ezproxy.snhu.edu/docview/209579842?accountid=3783

Ken, I. (2014). Profit in the food desert: Walmart stakes its claim. Theory in Action,7(4), 13-32. Retrieved from http://ezproxy.snhu.edu/login?url=http://search.proquest.com.ezproxy.snhu.edu/docview/1627660320?accountid=3783

King, I. (2007, Jul 18). Applied materials lays big bet on solar panel business. The Globe and Mail (Index-Only) Retrieved from http://ezproxy.snhu.edu/login?url=http://search.proquest.com.ezproxy.snhu.edu/docview/347720776?accountid=3783

Wal-mart right in organic fight. (2006). Advertising Age, 77(43), 16. Retrieved from http://ezproxy.snhu.edu/login?url=http://search.proquest.com.ezproxy.snhu.edu/docview/208355592?accountid=3783

Will, G. F. (2006, Jan 19). Shoplifting as governance; Maryland lawmakers' unethical grab at walmart's revenue. The Washington Post Retrieved from http://ezproxy.snhu.edu/login?url=http://search.proquest.com.ezproxy.snhu.edu/docview/409930776?accountid=3783

13


References

Gandel, S., 2013, Why Wal-Mart can afford to give its workers a 50% raisehttp://fortune.com/2013/11/12/why-wal-mart-can-afford-to-give-its-workers-a-50-raise/

Lundberg, K., 2016More Than One Million Walmart Associates Receive Pay Increase in 2016 Business Wire [New York]

Mas Masumoto, D., 2010, Married to Walmart: What Was I Thinking?http://www.theatlantic.com/health/archive/2010/06/married-to-walmart- what-

was-i-thinking/58839/

New Orleans CityBusiness, 2007, Organic Wal-Mart produce attacked as fraudulentCityBusiness Staff Report

Yam, M., 2009, Wal-Mart Employee Demos TV With PornIt could be an interesting marketing technique...?

14

http://search.proquest.com.ezproxy.snhu.edu/indexinglinkhandler/sng/au/CityBusiness+Staff+Report/$N?accountid=3783

http://search.proquest.com.ezproxy.snhu.edu/pubidlinkhandler/sng/pubtitle/New+Orleans+CityBusiness/$N/31266/DocView/209582884/fulltext/CC12340C8AFF44E1PQ/1?accountid=3783


Opportunities

A. By following the corporate social responsibility recommendations, the view of

Walmart as a greedy monster will change to a view of a company that cares about people,

planet, and profit. By Walmart reaching out to the community, it is reaching out to its

stakeholders and could be an easy way to build goodwill. Just as providing opportunities

to employees will help build morale and confidence in their workforce, which

unfortunately includes many of the underprivileged.

B. Becoming an industry leader sets a benchmark. Just as the Toyota Prius is the car that

all other hybrids are measured against. By Walmart setting the standard for a profitable

socially responsible giant retailer, other large retailers will be more likely to follow suit.

This is because if a company is seen as socially responsible it gains a certain type of

cache that is attractive to a variety of current and potential consumers.

C. One company that stands out as socially responsible to me is Ben and Jerry’s Ice

Cream. The company was sold for $326M to Unilever and is considered successful by

any standard. This being despite, or because of, its socially responsible policies.

Analysis of Issues

Walmart is a company whose name is synonymous with low prices and savings. People

all over the world flock to Walmart stores to find everyday needs such as food and

15


clothing, but the stores offer much more than that. You can go to Walmart for home

goods, personal hygiene products, pet supplies, toys, and just about anything else you

may need, from arts and craft to automotive supplies. It is truly a one-stop shop that is

viewed by many as a way to stretch their dollar.

While there are many positive things about Walmart, the company has also become a

poster child for unethical corporate policies. These policies affect a vast audience, most

of the time without their knowledge. For the sake of this paper, examples will be limited

in scope to each specific stakeholder and how a positive impact on one stakeholder

negatively affects another.

IV. Personnel

Major stakeholders

Walmart investors believe that they are putting their money into a stable and profitable

company that has a strong earnings history. Walmart has made, and is making, many

people a lot of money. Its publicly traded stock has held steady at about $68 a share and

the family and ancestors of Sam Walton have become billionaires. According to data

obtained from Morningstar.com Walmart’s current CEO makes upwards of $20 million

per year while other executives make between $7.4 and $19.5 million.

The discussion must turn to how Walmart’s leaders earn millions of dollars in

compensation while the average employee struggles with poverty pay. Which stakeholder

is more important? Walmart obviously believes that its executives deserve greater

compensation because they make decisions that affect the organization as a whole. Their

goal is to increase profits and keep costs to a minimum. In the meantime, the employees

are viewed as dispensable, this is why there have been numerous protects organized by

16


current and former Walmart employees al across the United States. The protestors are

demanding a higher hourly wage, the right to unionize, fair and equal opportunities for

both men and women, and access to affordable healthcare. The protests are seen as a

nuisance and Walmart has been known to retaliate against troublesome employees and

many times dismisses them and replaces them with new employees eager for a job

opportunity.

Walmart Inc. v. Dukes was a response by Walmart towards a class action lawsuit brought

on by former female employees who claimed that their managers had either sexually

harassed them or discriminated against them in favor of less qualified males. Walmart

won the case due to technical procedures that were not followed by the attorneys of the

group that filed the case. Reed and Harding (2015) note that the court found that the

“Walmart corporate culture, which included gender stereotyping; and most importantly, a

common feature of excessive subjectivity, which provided a conduit for gender bias that

affected all members of a class in a similar fashion.”

As discussed, one way that Walmart is able to remain a discount retailer by keeping

employee’s salaries low. Another component to this end is Walmart’s supply chain.

Walmart has upwards of 100,000 different suppliers and claims that it cannot police

every factory that it buys its products from. Many of these outsourced or contracted

suppliers have been found to force laborers to work grueling schedules for little pay.

Walmart turns a bind eye to these allegations and claims that they are not responsible for

how a contracted entity treats their employees. Should this be considered an unethical

practice or business as usual?

17


It seems clear that Walmart managers sometimes do not think about how their actions

will be perceived by others. I found an article online about a Walmart store in Nevada

that included a short video from a news clip. The article was about a clothing display at a

store at Lake Mead and Rancho that had mannequins hanging from the ceiling. The news

anchor in the clip interviewed people from various races and asked them what they

thought about the display. All African American respondents mentioned words like Klu

Klux Klan while Caucasian’s simply saw a clothing display. Once the report was aired on

television, the Walmart store removed the display. The issue becomes more about why

the display was removed than to why it was put up in the first place. If the managers and

employees saw nothing wrong with the display then they should have not removed it. To

add fuel to the fire, the report is titled “Get over it People!” clearly implying that African

Americans are too sensitive about the race issue. My question to them would be, “if there

were mannequins posed with the Nazi solute, would that be offensive?”

V. Environmental

Corporate Irresponsibility

No one can deny Walmart’s impact on the global economy. An article on the website

BusinessInsider.com Trivett (2011) found that “if Walmart were a country, its revenues

would make it on par with the GDP of the 25th largest economy in the world by

surpassing 157 smaller countries.” With such a force on the economy, whenever Walmart

enters a market its influence is unmistakable. For example Walmart has become a large

player in the organic food market. For better or worse the organic market is now

becoming known as “corporate organic” People claim that Walmart is diluting the

organic market and may not actually be selling organic products. This claim arises from

18


the fact that Walmart has partnered with Wild Oats a company known as a former partner

with Wholefoods. Martin, (2014) made points out that Wild Oats not only sells organic

foods but conventional foods as well which has lead to criticism from people who think

shoppers will assume that just because a food item carries the Wild Oats label it will be

organic. Gupta (2014) criticizes Walmart for sourcing its organic goods from “major

agribusiness … with little or no history of manufacturing organic food,” as well as

“foreign sources, and domestic industrial-scale farms.” These observations throw the

overconfident claims of Walmart’s organic product line into question. While some critics

may use harsh words when discussing Walmart’s organic venture, it may be done in

order to illuminate the harm that can be done to the organic product manufacturers and

distributors.

I. Sound Business Practices

According to various sources, Walmart generates an average of a billion dollars a day

from all of its stores. Despite of this, Walmart has been accused of encouraging a culture

where managers are supposed to dismiss the lost or stolen inventory at their stores in

order to make the stores seems more profitable than they really are. If this were to occur

at one store it would not be a blip on the radar. The fact that it is a quiet company policy,

with actual training on how to minimize the actual losses, artificially inflates the

profitability and therefore the stock price. While being unethical, this could also be

illegal.

Will (2006) noted that eighty-six percent of Walmart employees have health insurance,

more than half through the company, which offers 18 plans, one with $11 monthly

premiums and another with $3 co-payments. Despite of this, Walmart employees are

19


more likely to be on government assistance programs than the average US worker. This

has made what many are calling a “welfare state”. This is because of Walmart’s corporate

policy has been to either pay the minimum wage necessary to meet the state law or to hire

many part time employees who do not qualify for those health benefits.

Walmart is a polarizing company that has its roots in southern United States. The history

of racial tension in this part of the country is well documented and this could be a reason

why people see the company as racially insensitive. Despite all of the controversies that

have surrounded this retail giant, there seems to be no slowing it down. I think it is

because low prices are able to draw customers and after all, nothing is stronger than the

almighty dollar.

Outline of Recommendations

People

20


Walmart can improve the relationship with employees by raising the

minimum amount per hour that they are willing to pay. Walmart can also

reach out to minorities and women in order to offer educational and promotion

opportunities.

I also feel that the customers have to be able to walk into a Walmart and not

be subjected to what they may perceive as racist, regardless of whether it is

intentional or not.

Planet

Walmart has to put an end to the skepticism surrounding its organic food.

Profit

Shareholders need to be confident that they are not investing in another Enron.

With the 2008 economic recession still fresh in people’s minds, bad

investments are not something people are willing to gamble on.

Implementation suggestions

People

Walmart should let their employees unionize or offer the benefits that unions

do. This would mean empowering employees, this would be a great way to

change how current and potential employees see their job and maybe see it as

a career.

21


Walmart should also have a district sensitivity manager that could offer

training to all employees, including managers. Managers have to know that

they have influence over their workforce

Planet

Walmart needs to reach out to certified organic farmers, and I would like them

to reach out to local farmers as well, for their produce and organic items. This

would be more expensive but these steps would change the way Walmart is

viewed by organic shoppers. This may also help Walmart take customers way

from stores like Wholefoods which would be a big plus

Profit

Profit should not be viewed as the be-all end-all. Profit should be seen as a

byproduct of conducting business the right way. Walmart should stop

focusing on expansion plans and focus on fixing the stores that are already

open. There should be better security and detection of lost or stolen goods.

Instead of lying about the problem, trying to stop the problem would be a

better approach. This would make Walmart seem like a store that cares about

its products. Instead of being seen as a company that sells products it doesn’t

mind being stolen, it would be seen as a company that is legitimately trying to

increase profits by be more responsible it its handling of inventory.

References

Davis, J., (2015) Get Over it People!, Western Journal

22


http://www.westernjournalism.com/look-shoppers-saw-what-was-hanging-in-walmart-immediately-accuse-store-of-racism/

Gupta, A., (2014) How Wal-Mart Threatens Organic Food, June 23, 2014

Martin, A., (2014) Wal-Mart Promises Organic Food for EveryoneWhole Foods and the Rest of the Natural Foods Industry, Beware, Bloomberg.com

Reed, T., Harding, J., & Kelly, W. (2015). Employee Class Actions Four Years after

WalMart v. Dukes. Defense Counsel Journal, 82(3), 255-281

Will, G. F. (2006, Jan 19). Shoplifting as governance; Maryland lawmakers' unethical grab at walmart's revenue. The Washington Post

23

walmart corporate social responsibility recommendations

Documents