Wal-Mart Sustainability:Is it Corporate Social

Responsibility?

G

What is CSRBackground of Wal-MartWal-Mart sustainability InitiativesTeam DebateAnalysis

There is NO unifying agreed upon definition of corporate responsibility

G

“It must embody the economic, legal, ethical, and discretionary categories of business

performance” (Carroll, 1979)

Economic Responsibilities – “Produce goods and services that society wants and to sell them at a profit”Legal Responsibilities – “Society expects business to fulfill its economic mission within the framework of legal requirements”Ethical Responsibilities – “[Societal] expectations of business over and above legal requirements”

(Carroll, 1991)(Carroll, 1979)

Discretionary Responsibilities – “[Social] roles that are purely voluntary … guided only by a business’s desire to engage in social roles not mandated, not required by law, and not even generally expected of businesses in an ethical sense”

(Carroll, 1991)(Carroll, 1979)

Management’s only responsibility to maximize profits for owners/shareholders (Friedman, 1962)

It is the job of government to solve social problems Managers are trained in finance & operations, not social problem solving (Davis, 1973)

CSR not direct aim of a corporation – dilutes true intentions (Hayek, 1969)

Corporations have enough power, should not be given social power (Davis, 1973)

Pursuing CSR decreases global competitiveness

(Carroll & Shabana, 2010)

It is in organizations’ long term interest to be socially responsibleWard off government regulation of business practicesBusinesses have the resources: talent, expertise & capital (Davis, 1973)

Others have failed let businesses try (Davis, 1973)

Proacting to social problems is better than reacting once they have occurred (Carroll & Bucholtz, 2009)

The public supports CSR (Bernstein, 2000)

(Carroll & Shabana, 2010)

Cultural Reluctance Cultural Grasp Cultural Embedment

Dismissing Stage

Self-Protecting Stage

Compliance Seeking Stage

Capability Seeking Stage

Caring Stage

Strategizing Stage

Transforming Stage

Increase revenueIncrease revenue 19.9%19.9%

Enhanced brand reputationEnhanced brand reputation 24.1%24.1%

Comply with regulatory and legal requirementsComply with regulatory and legal requirements 20.2%20.2%

Attract/retain environmental conscious customersAttract/retain environmental conscious customers 5.3%5.3%

Become more attractive to talentBecome more attractive to talent 3.0%3.0%

It’s the right thing to doIt’s the right thing to do 27.8%27.8%

Business Executives: 773Business Executives: 773

“What is (or would be) the main objective for your company’s sustainability efforts?”

G

Cost Cost LeadershipLeadership

DifferentiatiDifferentiationon

YearYear EventsEvents19621962 Sam Walton opened the company’s first discount store in Sam Walton opened the company’s first discount store in

Rogers, ArkRogers, Ark

19701970 The Wal-Mart Home Office in Bentonville, AK opens.The Wal-Mart Home Office in Bentonville, AK opens.

Employed 1,500 associates in 38 stores, with sales of $44.2 Employed 1,500 associates in 38 stores, with sales of $44.2 million. million.

Wal-Mart also began selling shares over the counter as a Wal-Mart also began selling shares over the counter as a publicly-held company in 1970.publicly-held company in 1970.

19911991 Wal-mart opened its first international store in Mexico cityWal-mart opened its first international store in Mexico city

20052005 Sustainability Initiatives ImplementedSustainability Initiatives Implemented

ArgentinaBrazilCanadaCentral AmericaChileChinaJapanIndiaMexicoPuerto RicoUnited Kingdom

USA Non-USA Total

Number of stores

~ 4,200* ~ 3,600*> 8,000**†

under 53 banners 15 countries

Number of Employees ~ 1.4 Million* ~ 700,000* > 2 Million**†

Annual Sales $258.229 Billion**

$100.107 Billion**

$405.046 Billion**†

* As of August 2009 ** As of January 31, 2010 † entire Wal-Mart corporation

4,200in 50 states &US territories

Number of Stores 1,750 in 49 states

~1.4 million Number of Employees ~351,000

$258.229 billion* Annual Sales $63.435 billion*

* According to annual report ending January 31, 2010

Wal-Mart Stores, Inc. (NYSE: WMT) Total Net Sales (Annual) - $405.046 billion†

1% increase from 2009Total Net sales (4th quarter) – $112.8 billion†

4.6 % increase from 2009.5% decrease in sales in US from 200919.5% increase in sales internationally from 2009

Current Stock Price: $53.90 (-.17)

*financial results for the quarter and fiscal year ended January 31, 2010 †total Wal-Mart corporation

Open Door•Associates can always share

suggestions, ideas, & concerns

Grass Roots Process•Listen to associates

•Associate Opinion Survey

3 Basic beliefs and Values•Respect for individual

•Service to our customers•Striving for Excellence

Teamwork•Open communication, mutual

support mutual respect

Servant Leadership•Working along side associates

on the floor allows managers to listen, communicate, provide morale, &

accomplish goals

10 foot rule•If within 10 feet of a customer:

look them in the eye, greet them, askif you can help

Wal-Mart Cheers•Work should be fun

•Demonstrates pride in job

Sundown Rule•Giving immediate service to stores,

associates, & customers the same daythey ask/need it

Wal-Mart ranks 2nd behind the U.S. Government as the most-sued organization in the world.

Sued 4,851 times in 2009 (once every two hours)Currently 9,400 cases pending against Wal-Mart in the U.S.

In October 2004, U.S. Government sued Wal-Mart for violating the Clean Water Act in 9 states

Result – $3 million in penalties & changes to building codes.

In 2009, Wal-Mart CEO Lee Scott earned $29.7 million in total compensation

1,551 times the annual income of the average full time Wal-Mart Associate.

• Wal–Mart : The High Cost of a Low Price

To be supplied 100 percent by renewable energyTo create zero wasteTo sell our products that sustain our resources and the environment

Wal-Mart Sustainability Goals

On January 18th 2010, Wal-Mart completed the largest solar power project in the world

5,300 ground-mounted solar panels, over 7 acres, supplies 1 mW power

Design & open a store prototype that is 25-30% more energy efficient, producing 30% fewer greenhouse gas emissions by 2009 globally

(CA)

(TX)

Since 2005, Wal-Mart has preserved 395,000 acres of land across 9 states – one preserved acre for each developed acre of store

By 2025, eliminate landfill waste generated by US storesBy 2013, reduce all plastic bag waste by 33% per store: avoiding producing 290,000 metric tons of GHG & eliminating 135 million poundsof plastic bag waste globally

(ID)

1. Reduce emissions within Wal-Mart's direct control, including operations of our stores, clubs, distribution centres, truck fleet, cars and airplanes.

2. Help suppliers reduce the emission associated with the manufacture, shipment, and use of their products.

3. Help customers reduce emissions by offering more energy efficient products. Offer more environmentally preferable disposal and reclamation options for those products.

4. Be actively engaged in the public policy debate and discussions on curbing greenhouse gas emissions.

Environmental Impact Charts

Wal-MartCorporate Social Responsibility

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Carroll, A.B. 1979. A three-dimensional conceptual model of corporate performance. Academy of Management Review, 4(4): 497-505.Carroll, A.B. 1991. The pyramid of corporate social responsibility: Toward the moral management of organizational stakeholders. Business Horizons, (July-August):39-48.Carroll, A.B. & Shabana, K.M. 2010. The business case for corporate social responsibility: A review of concepts, research and practice. International Journal of Management Reviews, 85-105.Maon, F., Lindgreen, A., & Swaen, V. 2010. Organizational stage and cultural phases: A critical review and consolidative model of corporate social responsibility development. International Journal of Management Reviews, 20-38.