Case 1: Walmart: The Main Street Merchant of Doom
1. What are the major issues in the case? What does Walmart’s experience tell you about the
business and society relationship?
The major issues in the case center on Walmart’s expansion. The case focuses on the impact to
the communities to which Walmart moves, from both an environmental and economic
perspective. Walmart has been criticized for the aggressive and even predatory tactics that it
takes with respect to local merchants. Competition is what drives Walmart, and a merchant who
2. Assess Walmart’s corporate social responsibility using the four-part CSR model. Is Walmart
socially responsible even though it has had a devastating impact on many small merchants?
The following is an assessment of Walmart’s corporate social responsibility using the four-part
CSR model:
Economic: Walmart’s economic performance has been outstanding. According to the text, in
2010, Walmart was the largest retailer in the world with over $408 billion in sales. Its goal of
providing quality merchandise at a low cost to consumers meets society’s economic expectations
for the company.
Ethical: Walmart’s internal policies have certainly been above the spirit of the law. Questions
may be raised, however, about (1) the degree to which it has considered its impact on other small
stores and merchants and on town culture, and (2) certain employment-related practices that have
resulted in mammoth lawsuits for the company.
3. What about Walmart’s impact on communities in terms of sprawl, traffic congestion, and
impact on the appearance of the environment? What responsibility, if any, does the company
have to the communities in it enters?
As noted, questions may be raised about some of Walmart’s practices and effects described in
the case. Walmart’s responsibility to community merchants could extend to the point that
Walmart should teach them how to complete with, not against them. Predatory competition
designed by department managers to increase store sales should be stopped and punished if
necessary.
4. Sam Walton has been called a motivational genius. After reading this case, and with what you
have observed at your local Walmart store, do you think his motivational genius is still felt by
associates? What is the “Walmart Way”? How would you characterize the store’s culture now
that Sam is no longer around to visit the stores?
Sam motivated the associates by giving them the responsibility and the credit for Walmart’s
success. He gave them ownership in the company through stock options. He posted the stock
price daily and pointed to it often. He held weekly videoconferences with all the stores
explaining new ideas, promotions, and products. He included the associates in the decision-
making process.
5. Walmart was an early leader in the area of corporate social responsibility. Is the company’s
detrimental impact on merchants offset by the benefits of its recent corporate citizenship and
sustainability initiatives?
Both the Buy America and Environment Awareness campaigns are examples of how Walmart
continues to promote corporate sustainability initiatives. The Buy American program not only
promotes the purchasing of goods made in America, but the advertising of such a program raises
awareness of this issue in the minds of the hundreds of thousands of Walmart shoppers. The use
of Walmart’s vast purchasing power also creates awareness in the manufacturing and marketing
sectors that there is a demand for American-made goods. The Environmental Awareness
campaign works in much the same way.
While corporate citizenship programs that focus on certain aspects of the community are an
important part of a company’s corporate social responsibilities, it bears noting that corporate
social responsibility encompasses a company’s economic, legal, ethical, and philanthropic
responsibilities. Given the record of these programs, it is difficult to believe that Walmart’s
6. Walmart continues to find resistance to its expansion into New England and some parts of the
United States. What are the true goals of the opponents of Walmart? Include a consideration of
the following: (a) stopping Walmart’s expansion, (b) preserving the status quo (e.g., downtown
community and social fabric), (c) developing a cause that will pay their bills, (d) fighting for an
ideology, or (e) something else. What should Walmart do when it encounters resistance?
Walmart’s primary emphasis is on the consumer stakeholder. However, it is its relationships with
other stakeholders, specifically the government, local and global communities, its employees,
and the environment that impact its ability to expand into new areas. Opponents of Walmart fear
that while the company provides low-price alternatives to consumers, it also has the ability to
drive out local competition. This eliminates the consumer’s right to choose (i.e., the right to
ensure that competition is working effectively), a right identified by the Consumer’s Magna
Carta (see Chapter 13 in the textbook). Thus, opponents are concerned that Walmart’s continued
expansion may have the effect of actually limiting consumer choice in the long run, as well as
7. With Walmart now having to close stores due to the economy and/or competition, does it have
any social responsibilities to the communities it is leaving? If so, what would those
responsibilities be?
Looking again at the model of CSR, the economic and legal responsibilities would give minimal
responsibility to Walmart in regards to its associates, customers and community. The ethical
responsibility would require that Walmart avoid even the appearance of a questionable response
and to operate above the minimum required by the law. At the discretionary level, the
8. When you are the largest company in the world, how do you protect yourself against the kind
of criticism Walmart has received? Does it seem that no matter how hard you try, it’s difficult to
make things better?
It would be impossible for a company as large as Walmart to insulate itself from criticism. The