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I read about this big retail giant for first time while reading The world is flat.Thomas friedman went all ga ga over how walmart has revolutionised retailing,how it manages to sell stuff at prices which no other retailer can even come closer to.The major reason as he pointed out was its excellent supply chain management and i was left wondering,how can solely a good supply chain management makes one a leader in retailing.Its beyond doubt that Wal-mart has one of the most sophisticated and well managed supply chain but thats just one side of the story.
When looking at an organisation for what it does for society,there are two things to be considered.They are what the organisation gives to the society,and whats the cost(for society) involved.There was lot of hype at time when concept of Retail chain came to india, with endless debates about how it will improve living standards and fate of mom & pop stores.Till now,the model has been quite successful and even mom & pop stores survived,infact,they became more efficient.But,Retail stores in india were no Wal-marts.
The retail giant is good for customers,but not for its employees.It serves products to customers at cheapest prices,but at the cost of meagre salaries which arent even enough for a decent living.
Lets see what impact Walmart stores had on society and individuals.
The good part,all i can see is one,goods at cheaper prices,many of which are made by workers working in china and bangladesh at wages as low as 17 cents an hour,14 hrs a day,7 days a week.
Now about the bad effects..thats where the meat lies..
When walmart came to U.S,many of the stores,which were serving consumers for over 4 decades,were forced to shut down.It seems its not just the walmart's agressive business strategy but support by various state goverments which made it happen.Millions of dollars were given in subsidies for walmart stores,along with land at subsidised prices.Competition brings the best in both parties till the time its fair but these subsidies gave walmart an unfair advantage and left other stores no option than to shut down.If we get into mathematics,even if wal mart works like a normal retail chain and pays back to society,or at worst,just manages to run its business at no gain,those cash and land subsidies are not a bad business proposal.So,U.S govt had a role to play.
Secondly,walmart has over 1.8 million employees in U.S...its almost half of New zealand's population.The employees are paid minimal wages,they arent provided any medical insurance/aid(Goverment is supposed to take care of them from taxpayer's money) and dey are not paid for overtime as Walmart flaunts abt its no overtime policy.The store managers are given special training to how to make employees work for more than 40hrs a week and all such tactics are put to use regularly.
The Walmart has been involved in litigations regarding causing damage to enviroment and Walmart's parking lot are famous crime destinations.
The five members of walton family,walmart's owners,make it to the top wealthiest ppl in united states,with total wealth over 110 billion $ which is equivalent to whole Dubai's GDP...so a walton family is a dubai in itself :) .And the walmart family donated 1% of it for social cause.Ironically,the richest man in world,Bill gates donated over 50% of his wealth.
To me,it seems a case of making whole america poorer at the name of cheaper prices to make one family rich.
Walmart's Hegemony in U.S is just the same as U.S hegemony in the world.May be,in time to come,both will end :)
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