The biggest company in terms of revenue worldwide is creating a lot of buzz in the business news section today. Walmart, with 11,000 stores in 28 countries, had its stock price suddenly dive to less than 60% in October 2015 from January’s 90%. Last January, Walmart announced closure of 269 stores around the world, 154 of which are located in the United States. The company is set to focus more on is supercenters and e-commerce. There’s definitely a Priestley business trend happening here.
Aside from the stock price downward movement, Walmart has also been talked about for some time now because of its company policies. Taking into account all the reports published against Walmart, here are some things we can learn from its plight:
- The decision to globalize should be made after thorough examination and planning. After successful profits around the USA, Walmart immediately jumped to the globalization decision mostly because it was the only way they’ve seen to grow. Yes, they could also afford it, to some extent and to limited countries, but being able to finance it doesn’t automatically means you have to go for it. This is not to say that the decision was wrong, this merely means that a thorough research and judgment must be undergone before venturing in globalization.
- Labor relations is very vital to the success of any organization. Time and again, numerous successful businesses remind us that people are assets, one should never take them for granted. Multiple cases have been filed against Walmart in relation to labor relations – wrongful termination, child labor, prison working, exploited benefits and even wage thefts. As such, negative articles about Walmart have also been piling up in the news, The Daily Dot for example has an article entitled “10 Reasons Walmart is the Worst Company in America”, citing its anti-union policies are getting worse all the time.
- Do not compromise your assets for short-term bigger profits. Aside from neglecting their employees’ needs and rights, Walmart also seemed to neglect other assets like suppliers and infrastructure. Poor work conditions and accusations on predatory pricing and monopolistic practices have been reported. The company looks like they have been foregoing some workplace standards to cut on costs and at the same time ignoring good relationship with suppliers, pressuring them to offer supplies at lower cost. One of its supplier, Kraft, closed 39 plants due to loss accumulated from supplying Walmart.
- Do not stop re-evaluating your management team and company policies. Walmart may have dismissed this completely or consciously disregarded this for as long as the company hits the target profit. The bottom line must not be the only measure to a successful organization. Choose a team that embodies right and truthful practices and truly cares for the people and the business. Corporate strategies created in bad faith puts the company’s sustainability at risk.
The world looks at Walmart as a greedy company. One who lures in customers through their low prices in exchange for so many abused rights. It profits because it gives what the customers want while at the back of it all, the community is hurting, the economy is not improving and the employees uncared for, and to top it all off, the company is losing money.
About the Author
“Murray Priestley has 25 years of commercial and asset management experience having served in board, CEO and senior executive positions with a number of global public and private companies.”