I know this is a tad recursive as Peter Begley from Business Ethics & Corporate Social Responsibility found the CorpWatch blog through here, but his latest post today highlights yet another disturbing fact about Wal-mart.
When I was at B-school, doing conjoint business and law degrees (I didn’t believe in anything then), Wal-mart was a management textbook darling. No more. I doubt anyone would hold up the post-Sam Walton Wal-mart as a shining example of modern business, considering it forces prices down and can, according to my colleague Simon Anholt, collapse an entire national economy by deciding to buy its coffee from another place.
The latest incident makes me wonder if the Walton kids were waiting for the old man to croak so they could run amok and build shrines to the family. For they are building a museum, and Ms Alice Walton has just forked out $35 million—that’s more than what John Travolta gets for one ﬁlm—for a painting. A painting.
Peter quotes from an Alternet posting:
It might not even be, as Wal-MartWatch.com points out, that the price of the painting equals what the state of Arkansas spends every two years providing for Wal-Mart’s 3,971 employees on public assistance; or that the average Wal-Mart cashier makes $7·92 an hour and, since Wal Mart likes to keep people on less than full-time schedules, works only 29 hours a week for an annual income of $11,948—so a Wal-Mart cashier would have to work a little under 3,000 years to earn the price of the painting without taking any salary out for food, housing, or other expenses (and a few hundred more years to pay the taxes, if the state legislature didn’t exempt our semi-immortal worker).
The CorpWatch post about Wal-mart is here, while Peter’s post may be found by clicking here.
Sure as heck smacks of the sort of behaviour that usually leads nations into revolution, whether you believe in karma or not. It will be interesting to see if corporations are as susceptible. I think so, as they are identiﬁed by a brand as much as a nation is by its ﬂag and the uniforms of its secret police.
Del.icio.us tags: Wal-mart | social responsibility | CSR Posted by Jack Yan, 05:19
Wal-Mart is fantastic for consumers, terrible for employees and competitors. As a model of efficiency, Wal-Mart can indeed still be held up as a shining example. You say Wal-Mart forces prices down as if thats a bad thing! Thats what free market forces are supposed to do. Thats what capitalism is. Efficiency, low prices, quality. Unless the oceans shift and the masses convert to "ethical consumerism," the only thing that will stop Wal-Mart's abuse of its freedoms is governmental/legal intervention (i.e. right to unionize, worker's rights etc.).
Thanks for commenting, Ben. Wal-mart forces prices down in a number of ways. Basically, as a supplier to Wal-mart, we’ve been told that we cannot put up our prices, not even when our operation costs go up. It’s not accepted as an excuse. That means that companies are forced to ﬁnd ever-cheaper sources of production, which sounds ﬁne, until you realize that those ever-cheaper sources might involve sweat-shops that violate some basic human rights. We’re not in that dire position at the moment, but worker abuse shouldn’t be the sort of thing free markets promote—there needs to be some level of social responsibility, especially in a company that can actually afford it, evidenced by a multi-million-dollar painting,
Being terrible for employees—that’s not ideal, either. And if this “race to the bottom” means ﬁnding these cheap production places, then you actually don’t get quality for those low prices—Wal-mart and its ilk are examples of the slowly decreasing quality of many products.
We can argue over the deﬁnition of the term efﬁciency: the market may seem efﬁcient using the Wal-mart way, but I am an idealist who feels social responsibility in the “victim” nations might encourage those nationals, one day, to be that company’s own consumers. Like Henry Ford paying enough so his workers could afford Model Ts. Right now, I see them generate hate for the Wal-mart brand; and while that hate may take decades to manifest itself out of those countries, this can happen. Perhaps short-term efﬁciency—but long-term brand damage. I’d rather get these nations’ living standards up via globalization than down.
However, your ﬁnal sentence is quite correct, and I agree. Many consumers are quite happy to tolerate the lack of ethics, provided they can get cheap prices. But I hope and believe that group is slowly shrinking. I would prefer campaigning to expose Wal-mart’s negative effects on so many people around the world—for instance, it has refused to sign a pledge to say it will obey the law in Bangladesh by paying maternity leave—so we aren’t left with the need to have governmental intervention, and let the market correct itself. I dare say most Americans would ﬁnd some of Wal-mart’s conduct unethical, and if they actually knew of more, would prefer higher prices if they are assured of the ethics under which their products are made.
Low prices that create significant externalities are quite detrimental to society. Many of the tactics Wal-Mart employs are pseudo-monopolistic (such as forcing suppliers to cap their prices as Jack mentions, or practically "dumping" and forcing smaller localized competition out of business) and should really be questioned.
Indeed, Wal-Mart is a great example of efficiency yet for what purpose other than pure profit? I will readily admit that I am somewhat of an anti-Capitalist, so even though I would agree with your point that they seek to maximize efficiency and do it well, I still think they are falling very short of the responsibility they have to better society (obviously not part of the Capitalistic ideology, but I feel that it should be). This obviously boils down to a difference in ideology, but one that is very important depending on what side of the fence you sit on.
I also agree with Jack that your last comment is spot on. I'm one of the consumers that chooses to spend more on products as an alternative to being a Wal-Mart patron, and I know there are many more out there (and our numbers are growing). Aspiring to "ethical consumerism" is a great goal in my book and I truly hope more people jump on board.
I'd like to point out a few facts:
The painting, as well as the museum, is being paid for partially by the Walton Family at large, but mostly by Alice Walton, Sam's only daughter. So you're not talking about money that is coming out of Wal-Mart's coffers, and money that can't be put back into Wal-Mart. This is just part of the however-many-billion dollars that each Walton is worth.
Personally, I'm thrilled that she is ponying up the money for what will hopefully prove to be a wonderful museum. There's no way Bentonville would have this museum without her generous contribution. And it's not named after any member of the Walton family.
The family has invested money in this community, and regardless of how one feels about Wal-Mart, the two aren't neccessarily connected. I happen to share most of your opinions about Wal-Mart, but I've learned by living here how to separate the two entities sometimes.
Don't you think we're all better off when people who have become rich through business invest some of that money back into the communties that worked so hard to make them rich?
Should Alice Walton just keep her money, die, and pass untold billions onto her relatives? Isn't this entire region going to be better off because of her desire to see a great museum solely dedicated to American Art?
I'm not sure what Alice Walton has to do with Wal-Mart's bloodthristy business tactics, except for the fact that she's the daughter of ther person who invented it.
As a resident of Bentonville who doesn't care for Wal-Mart, I'm tired of seeing this museum get bashed by people who don't know any better. It's a wonderful thing, made possible by a generous family with more money than anyone should have.
I guess I should picket the library that the Walton Family Foundation is paying half of the 4 million tab for...
Feel free to poke around and find out a little bit about Bentonville and the museum before you fling darts at the wrong target.
Wal-Mart is down the street.
Bill, thank you for your thoughtful comment. It’s worth pointing out what you did, because I am a ﬁrm believer that dialogue reveals truth.
I’m interested to hear more about the museum in general. If it is about American art, then yes, having suitable paintings in there that will make it a better museum would be a good thing—however, prior to that it had been reported (in what I read) as a museum to Wal-mart itself. If that was the case, then it seemed ridiculous to spend that sort of money on a family tribute, which I now understand the museum is not.
While I agree with most of your points, Bill, including the fact that it is right that people invest into a community, I feel Ms Walton should get herself involved in the company’s behaviour. I don’t believe that it is that easy to separate the person from the company. Her personal wealth as one of America’s richest women ultimately stems from the company her father founded, even if the money she forked out hasn’t come from the coffers right now. She might not be public property in the way a movie star chooses to be, but her name is tied to the company—so for the sake of it, and for her own reputation, showing a social conscience would not go amiss in today’s more alert society.
I write not because I want to see Wal-mart close and its employees and suppliers in dire straits. I write because I hope positive change can take place. Since it appears now that Ms Walton has a desire to help her community, then I hope her vision will become more global.
Perhaps this is something she plans at some point—let’s hope so.
Thanks again, Bill.
You can find out more about the museum at www.crystalbridges.org
I agree that you can't totally separate the family from the company, but I think the onus falls much more heavily on the leaders of the company, rather than the family that is fairly disconnected from the company these days.
The exception is the oldest son, Rob, who is the chairman of the board. I think Jim may still be on the board, but he runs a bank. John died last year in a plane crash and Sam's wife is near death, from what I hear.
I think the impetus to change should come from the board, whether their last name is Walton or not.
Let's all hope that things change. But for me, the museum (and the other things that the Waltons do for NW Arkansas) are separate from the behaviour of the company. I may wish that they'd get involved, but I don't criticize their generosity towards the community because I wish it would extend to their late father's company.
Check out the website. The museum is really going to be an amazing sight. Nestled in the woods, about a 10 minute walk from downtown
Bill, you are very correct: the onus should fall on those who drive Wal-mart, and only secondarily on members of the Walton family who are not involved in a day-to-day sense. I thought I’d link the URL you supplied for those who wish to click on it (myself included): www.crystalbridges.org (I am afraid Blogger does not automatically change addresses into something clickable).
Blll: Excellent points!
Overall, I agree with your general comment that using wealth to give back to the community that helped to create it is a good thing. However, to counter, I would add that much of that wealth (whether Alice had a hand in it or not) was generated as a result of very aggressive business tactics and at the expense of employees, small businesses an other entities. So yes, I think on the one hand that it is fantastic that so much personal wealth (I'll acknowledge I didn't separate Wal*Mart from Alice Walton's wealth, though the omission was unintentional) is being used to create a museum, but on the other hand, a museum + Alice Walton's separation from Wal*Mart's current leadership shouldn't make the whole thing completely fine.
It is easy for me to be critical (yet also agree with many of the points you make), but how enthusiastic are many of Wal*Mart's current employees about the museum (again, acknowledging that Alice Walton's money is a separate beast than funds from Wal*Mart)?
"As a resident of Bentonville who doesn't care for Wal-Mart, I'm tired of seeing this museum get bashed by people who don't know any better."
I don't know that the museum has been "bashed," rather, I think the use of the money overall is what has been questioned. On my blog, I posted the following statement (and still feel the same):
"On the surface, I would almost always get behind any effort to build museums, libraries, or other culturally important projects. However, even without pursuing the details of the issue further (I highly recommend that everyone read the Alternet article as well), I find it very difficult to praise the Walton’s efforts as there is such a deep divide between the profits Wal*Mart makes (and thus the gains her major shareholders, the Waltons, subsequently realize) and the compensation it provides the majority of its employees."
To follow up, and in relation to your point that the museum is a plus for the community that helped make the Walton's wealthy, I would ask, is the use of the funds for the museum the most optimal for the community and as a legacy for Alice Walton?
It is easy to say "yes" as museums are a wonderful addition to any community (I am also a professional photographer and a very determined supporter of the arts), yet I am also a firm supporter in improving communities in other ways such as improving public education, providing financial support to low-income individuals to start businesses, funding non-profit groups that work closely to improve the community and many other alternatives. This is not to say that Alice Walton has not, or does not intend to also use her wealth in such a manner. Without checking (I hope to do so later) I have a feeling that she has.
"Should Alice Walton just keep her money, die, and pass untold billions onto her relatives?"
Regarding this specific question, I would agree that funding the museum is a much better option than what you mention.
"I think the impetus to change should come from the board, whether their last name is Walton or not."
I agree, but would also argue that the impetus should come from consumers who continue to support Wal*Mart (given their current business practices). At some level, as critical as I am of the company, I find a lot of fault lies in the hands of the consumer.
Peter, excellent position! Thank you for putting both my and Bill’s viewpoints into perspective.Post a Comment
Links to this post:
NoteEntries from 2006 to the end of 2009 were done on the Blogger service. As of January 1, 2010, this blog has shifted to a Wordpress installation, with the latest posts here.
With Blogger ceasing to support FTP publishing on May 1, I have decided to turn these older pages in to an archive, so you will no longer be able to enter comments. However, you can comment on entries posted after January 1, 2010.
Get this blog via email
Individual JY&A and Medinge Group blogs
+ Add The Persuader Blog to your Blogroll
DonateIf you wish to help with my hosting costs, please feel free to donate.
Copyright ©200210 by Jack Yan & Associates. All rights reserved. Photograph of Jack Yan by Chelfyn Baxter.