The Walmart Conundrum

THE WAL-MART CONUNDRUM

Wal-Mart, the world's largest company, is a test case for CSR:

Wal-Mart is three times the size of the No.2 retailer, France's Carrefour. Every week,

138 million shoppers visit Wal-Mart's 4,750 stores; in 2002, 82% of American house-

holds made at least one purchase at Wal-Mart.

Wal-Mart-whose total annual revenue represent "a sum greater than the economies of

all but 30 of the world's nations." and is growing faster than any of them-is an extremely

successful and influential company. At the foundation of the company's success, however, is its strategy of minimizing costs, which relies on many policies that affect stakeholders in different ways.

The argument against CSR offers up Wal-Mart as its main case in point. Wal-Mart has

suffered considerable criticism about its alleged insensitivity to local communities, employees, and other constituents. Yet, if stakeholders really cared about CSR, Wal-Mart would not be nearly as successful as it is. The result is a mixed picture. Why is it that whenever the company enters a new market, some greet it like a liberating force and others see it as a conquering imperialist? As one headline read,

Wal-Mart Invades, and Mexico Gladly Surrenders."

A brief survey of article headlines indicates the negative feelings the company generates

and concerns about its long-term influence:

Is Wal-Mart Too Powerful?'?

The Wal-Martization of America"

Will Wal-Mart Steal Christmas?"

Wal-Mart: Cruising for a Bruising?"

Is Wal-Mart Good for America?"

The paradox that surrounds Wal-Mart and the controversy generated by its success is

why the company is a case study in so many different business disciplines. Overall, does

the company provide a net positive or net negative impact on the societies in which it is

based? As one writer observed, "Wal-Mart might well be both America's most admired and most hated company.’ And does the fact that consumers continue to shop at the store (20 million customers pass through Wal-Mart's doors every day") critically undermine the economic argument for CSR?