The Good & The Bad of

Wal-Mart’s Culture

A Case Analysis By:

 How BIG is Wal-Mart ?
Wal-Mart Stores, Inc. is an American
public corporation that runs a chain of
large discount department stores.

In 2010 it was the world's largest

public corporation by revenue with
stores in 17 countries, annual revenue
for 2009 at US$ 408.21 billion and
approx. 2,100,000 employees
A Brief Timeline of Wal-Mart
 1950 : Walton opens first five-and-dime
 1962 : Walton opens first Wal-Mart in Rogers, Ark.
 1970 : Wal-Mart has IPO
 1979 : Annual sales top $1 billion
 1985 : Wal-Mart has about 880 stores and $8.5
billion in revenue, smaller than competitors Kmart
and Sears
 1990 : Wal-Mart surpasses Kmart in size
 1991 : Wal-Mart opens first international store in
Mexico City
 1992 : Wal-Mart surpasses Sears in size
 1994 : Wal-Mart surpasses in size Kmart and Sears
combined
Contd.
 1995 : Has 1,995 discount stores, 239 Supercenters, 433
SAM'S CLUBS and 276 international stores with sales at
$93.6 billion
 1999 : Collaborates with AOL to provide low cost internet to
increase reach among internet consumers through its website,
especially rural America.
 2005 : Has more than 6,200 facilities around the world,
employing more than 1.6 million associates and $312.4
billion in sales
 2006 : Close Operations in Germany
 2007 : Starts Operations in India
 Why is it so Big ?

Organizational Culture

The good and the bad of it.

The Wal-Mart Culture

Built on three basic beliefs established by Walton

1) Respect for The Individual

2) Service to Customers

3) Strive for Excellence

Respect for The Individual

 Importance to employees in accomplishing

Organizational Goals

 Employees being called Associates , thus creating equality

and encouraging Team Work

 Open Door Policy

 Importance to Diversity Initiatives

Service to Customers
 Aggressive Hospitality

 Stores employed Greeters to welcome customers and

hand them Shopping Carts.

 Sundown Rule “Don’t put off until tomorrow what you

can do today”

 10 Foot Rule : Pledge where once within 10 feet of a

customer associates shall look them in the eye, greet
them and ask if they can help.
Strive for Excellence

 Always on look-out for new ideas which could be

translated into greater value of its customers

 Tried to obtain goods at lowest possible price and provide

best possible service.

 Worked with suppliers to pack and distribute goods in

most economical way without compromising quality, so as
to offer them at a cheaper price to the customer
Pricing Practices
 Pricing philosophy stressed more importance on Volumes
rather than Margins.
 All advertisements focused on low prices at stores.

Three types of pricing policies were followed :

o EDLP : Every day low prices on every product

o Rollback : Prices reduced even further at certain times

identified with mascot of yellow smiley

o Special Buy : A product sold at very low price for certain

period or one product free with another or More quantity
for same price
Other Elements of Wal-Mart
Culture
 Teamwork : “Individuals don’t win, teams do”

 Grass Roots Process

 Servant Leadership : “Effective leaders do not lead from behind

their desks”

 Wal-Mart Cheer : Done by employees every morning and on

special meetings

 Slogan : “Save Money, Live Better” and “Always Less Prices”

Competing Values Framework
 Wal-Mart
A Mix of
 Hierarchy Culture  Market Culture
 Culture is essentially customer centric and service oriented

Focus primarily on rationalization process an continuously

improving existing services and delivery systems

Maintaining Control and stability is Important as efficiency

timeliness and smooth functioning are vital factors. Thus their
growth strategy is centered around Control line.

Emphasis on keep doing the same thing better

Each Wal-Mart store should reflect
the values of its customers and
support the vision they hold for
their community.

Sam Walton
The Good of Wal-Mart
Wal-Mart enjoyed a ‘cult-like’ status and
employees were referred as ‘Walmartians’

Profit Sharing Plan

No Overtime
“First in Line” Program

‘Associate in Critical Need Trust’

Cultural Diversity
The Bad of Wal-Mart

Wages

• 2006 Wal-Mart reports that full time hourly associates received, on

average, $10.11 an hour that is about twenty percent less than the
average retail worker

Overtime Woes

• 2005 class action lawsuit in Missouri asserted approximately 160,000 to

200,000 people who were forced to work off-the-clock, were denied
overtime pay, or were not allowed to take rest and lunch breaks
 Use of illegal workers

 Sweatshop Support

• In1988 most goods stocked in Wal-Mart stores was from sweatshops in China
•Buys US$ 10 billion worth merchandise from sweatshops in china every year.
• Child Labor also used extensively in such shops

 Anti Union Stand

• In 1970, Sam Walton resisted a unionization push by the Retail Clerks

International Union in two small Missouri towns by hiring a professional union
buster to educate workers on the negative aspects of unions

•In
2002, Texas 11 meat cutters in Wal-Mart store joined the union, to which Wal-
Mart responded by closing all meat cutting depts. And buying pre-packaged meat
 Discrimination towards women :
• Pay difference between men and women
• Not enough women being promoted to managerial positions
• Betty Dukes files a sexual discrimination suit against Wal-Mart in 2000 on
being denied training for higher salaried position, later turned into class
action suit by 1.6 million women in 2004
• National Organization of Women labels Wal-Mart as “Merchant of Shame”

Cultural Due Diligence and failure in Germany

 Reasons for Problem in Wal-Mart
and the Way Forward
 Reasons  The Way Forward
 Size of Company  Pay based on evaluation
 Neglect of Wal-Mart ratings
culture on the part of  Importance to Cultural
Store managers due diligence
 Meteoric Growth  Efforts to instill new
 Mix of Cultures in cultural values like
Mergers and environment
Acquisitions friendliness
 Improve image in Media
Wal-Mart Advertisement
Wal-Mart’s Energy Saving
Initiative
Helping The Community
Bibliography
o Greenberg, J, & Baron ,R. Behavior in Organizations (9th Edition) New Delhi,
India : PHI.
o Wal-Mart (n.d) In Wikipedia. Retrieved August 6, 2010, from
http://en.wikipedia.org/wiki/Wal-Mart
o Criticism of Wal-Mart (n.d) In Wikipedia. Retrieved August 6, 2010, from
http://en.wikipedia.org/wiki/Criticism_of_Wal-Mart
o History of Wal-Mart (n.d) In Wikipedia. Retrieved August 6, 2010, from
http://en.wikipedia.org/wiki/History_of_Wal-Mart
o Culture (n.d) In Wallmartstores. Retrieved August 6, 2010, from
http://walmartstores.com/AboutUs/295.aspx
o Sam Walton Quotes (n.d) In Brainyquote. Retrieved August 6, 2010 from
http://www.brainyquote.com/quotes/authors/s/sam_walton.html
o Walmart Harvesting the Wind in Texas (April 20, 2010) in Youtube. Retrieved
August 6, 2010 from http://www.youtube.com/watch?v=nQawapwYMhA
o Back to School (August 9, 2010) in Youtube. Rerieved August 9, 2010 from
http://www.youtube.com/watch?v=lVjOOQDRMj8
o Lunchtime Legends (July 7,2010) in Youtube. Retrieved August 6, 2010 from
http://www.youtube.com/watch?v=zdiVn5kxjG0
THANK YOU