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1.0 Background of Wal-Mart
The first Wal-Mart store can be said to have been first opened, in the year, 1962 by its founder Sam Walton. Over the next decade, the stores grew relatively at a lower speed than other retail stores that were already in the market, but in the year 1972, the Wal-Mart had a chain of over 15 stores and for the first time it went public and decided to join the New York stock exchange. This was a major investment for the company as it grew rapidly to over two hundred stores during the following few years. In recent years the Wal-Mart stores are believed to be the largest private employer in the United States and the biggest corporation globally. In addition, Wal-Mart can be said to be situated in 25 states whereby it provides employment to a little over 1 million employees. Internationally, it can be said to have over 1300 operations in relation to it.
Sustainability can be defined as the ability of a given thing to endure and sustain itself over a long period of time. In addition, sustainability can be said to encompass some of the following: join economy and ecology into one system, social, economic and environmental aspects in relation to well being and maintenance of nature and human beings and defines how the biological system retains its productivity and diversity over long periods of time. In relation to sustainability, the principle ‛all the needs and requirements of human beings for their well being and survival’ largely depends on both a direct and indirect relationship with the natural environment. In addition, sustainability can be highly vital in the sense that it maintains humans’ long term dependence on needs such as water, resources for growth and good health and the environment (Colley, 2006).
This study is going to look at what the Wal-Mart company has been doing so as to achieve sustainability, when it may have first adopted the strategy of sustainability, what efforts it might have put in place so as to adopt sustainability easily. This can be in the sense that following the global set regulations about companies working towards having a sustainable current and future. In addition, what sustainability impacts the company has had over the years since its establishment back in the early 1970s. Looking at this information, a person can be able to know what efforts the company is putting in place to be sustainable and effects of being having a sustainability strategy.
2.0 Establishment of Sustainability Strategy
The first go green goal or objective for Wal-Mart in an attempt to be a sustainable organization can be dated back to the late 1980s. This was because of numerous complains that may have been raised by customers in regard to environmental issues. In response to the issues raised, Wal-Mart is believed to have dealt with them in a defensive manner rather than adopting the situation as a challenge to become better as per the request of the consumers and taking the issues as opportunities for increasing their profits. This can be done by proactively and cooperatively indulging the company with other competitive companies and consumers in dealing with the situation of environment degradation.
The company may have established a new campaign to try and compel its suppliers to come up with safe products that are beneficial to the environment in terms of being recyclable or biodegradable packaging. This new campaign may have been met by criticism. It was perceived to be a plot by the Wal-Mart company to generate and gain benefits at the expense of the suppliers who were in business with Wal-Mart. Though, they were criticized by others, they were also praised by environmentalists who said that they were among the first companies to speak out in favor of how the environment should be kept. In response to their campaign, some of the vendors adopted new improved environmental products which led to the Wal-Mart to promote the vendors products as environmental friendly products with the use of shelf tags that were colored green. Although, the Wal-Mart company sold most of the products that had been tagged during their promotion, they did not monitor and measure the improvements that may have happened due to the new environmental friendly products (Munier, 2005).
In recent years the Corporate Wal-Mart has decided to adopt the strategy of being sustainable so as to be an eco-friendly organization that still achieves its desired objectives and goals in the long run. The goal geared towards sustainability can be said to have been introduced again in the year 2000 by the then running CEO of the business. During the following years, the company can be said to be on the frontline in doing sustainable activities.
2.1 Sustainability Goals and Objectives
In the year 2005, the company’s new CEO Lee Scott may have relayed the company’s sustainable strategy to both employees and suppliers globally that may be linked to the company. The initiative adopted was so as the company could be environmental friendly and in the long run become the most innovative and competitive company globally. In addition, this may have been an effort to differentiate it from the other competitive companies and to prove that it can be of use in an area where it has been regarded as a laggard (Murthy, 2006). In regard to adopting the sustainability strategy the company has three major goals:
- In the future the company should be supplied with 100% renewable energy.
- Come up with a policy and implementation of zero wastage.
- Wal-Mart’s resources and the environment should be sustained by the products they sell.
In addition to the three highly vital set goals, the company also has some of the following objectives to achieve during its course:
“1. fuel efficiency in Wal-Mart’s truck fleet to be increased by 25 percent and doubled in a period of three years and ten years respectively.
2. in a period of 7 years decrease greenhouse gas emission by 20 percent.
3. in a period of 7 years decrease energy use in stores by 30 percent.
4. in three years cut solid waste by 25 percent from U.S. stores and Sam’s Clubs.
5. save an estimate of $75 million in fuel costs and eliminating CO2 pollution of about 400,000 tons annually by purchasing refrigerated diesel-electric trucks having a power unit that can keep cargo cold when the engine is off.
6. have an oral treaty to buy organically grown cotton and alternate crops from farmers in a period of five consecutive years.
7. carry certified wild seafood by the Marine Stewardship Council from the year 2011.
8. buying and selling of Restrictions on Hazardous Substances (RoHS) 12 weeks’ worth” (Heying, Sanzero, 2007).
2.2 Sustainable Value Networks
The attainment and achievement of these goals and objectives may have been based on building sustainable value networks. The network which may comprise of suppliers, employees, non-profit organizations and government agencies can be said to aim at reducing the overall environmental and carbon impact so as to overall profits. For a long period of time it is believed that the Wal-Mart company has been relying more on profits, growth, operations and supply channels, but in the recent past Wal-Mart is believed to have expanded and reached out to stakeholders that are external. This is because the company wanted to come up with key network and develop areas whose environmental impact was optimum to attain the set goals.Looking at the figure above, a person may be able to see how the company Wal-Mart can be able to use the networks to determine and gather a system that helps most of the retailers to come up with ways to deal with issues of environment. In addition, because of these networks, the suppliers that have adopted it have led to the non-profit organizations in relation to the Wal-Mart business entity to benefit highly. Suppliers are also able to benefit in the sense that they have a stable positive relationship with the Wal-Mart Company and gain support and guidance from all aspects that may be linked or associated with the Wal-Mart Company.
2.3 Setbacks of the Sustainability Strategy Implementation
The Wal-Mart Company may be faced with some of the following draw backs during its strategic implementation of the sustainability strategy, labor factory conditions being criticized, overall costs can be on the increase and assortment of sub-optimal products. This can be in the sense that employees may bring up issues regarding how they are treated by the company officials in terms of doing their respective jobs. In addition, the employees may be compelled to relay their problems to organizations that may have been set up to deal with employees issues and this in turn may ruin the reputation of the company. The increase in overall cost may be as a result of getting their products from a specific group of suppliers who may be relatively expensive compared to the suppliers who may not adopt the required conditions of sustainability in accordance to Wal-Mart (Dunphy, 2000).
In an effort to deal with the given setbacks, the company recently may have come up with a viable solution which is doing survey divide into three sub sections; builds a universities consortium that will join with suppliers, government agencies, non-governmental organizations (NGOs) and retailers, determines a database of information that is global on the life-cycle of products that is from raw materials to their disposal. The other way can be said to be through the use of the Sustainable Product Index whereby it will provide a more comprehensive way to deal with product evaluation. Moreover it will also be used as a source of information used in evaluating the sustainability of given products. The third way that the survey can be conducted is through a series of 15 questions which are divided into four categories: energy and climate, material efficiency, natural resources and people and community. The questions will be mainly aimed at evaluating suppliers who will be having both a direct and indirect relation to the Wal-Mart Company.
Efficiency of material: decreasing waste and improving quality
1. Please report solid waste coming from the facilities that produce your product(s) in totality to Wal-Mart after being measured.
2. Have you set viable reduction targets of the solid waste? If yes, what are the set targets?
3. Please report water use from facilities that produce your product(s) in totality, to Wal-Mart after being measured.
4. Have you set viable water use reduction targets publicly? If yes, what are the set targets?
Natural resources: coming up with high-quality, raw materials that are sourced responsibly
1. Have you established viable sustainability purchasing guidelines publicly for your direct suppliers that deal with employment practices, environmental compliance, and product/ingredient safety issues?
2. Have you got third-party certifications for the products sold to Wal-Mart?
People and community: maintaining ethical and responsible production
1. Do you know all the facilities that produce your product(s) and their locations?
2. Do you evaluate the quality of and capacity for production prior to entering a business relationship with a manufacturing company?
3. Do you have a process at the manufacturing level for managing social compliance?
4. Do you work to resolve issues found during social compliance evaluations with your supply base and document certain amendments and improvements?
5. Do you invest in activities of community development in the markets you source and operate from?” (Heying, Sanzero, 2007).
Through the use of the survey and report findings recently, the following results may have been achieved in relation to what the company still has to do in its effort to achieve the set, desired goals of the sustainability strategy. Avoiding waste,it is believed that Wal-Mart talks about waste being redirected from landfills, so as to improve the environment but the company does not focus on its own efforts to reduce and ultimately avoid wastage. Report findings should be drawn by the company to provide information of how it is dealing with such issues. Another issue that came up is packaging progress is lagging, the report provides data on the number of packaged items shown in a scorecard but should also show an actual baseline used. For these objectives to be meaningful, Wal-Mart is required to determine the metrics by which it will measure progress. The other aspect that Wal-Mart should work on is reporting progress in context, report findings on phosphates provides progress on only a small part of the given goal and does not have a standard baseline or foundation. For instance, having the knowledge that an estimate of 29 percent of detergents in Central America is phosphate free can sound appealing but, it is a relatively small percentage compared to entirety of America. In addition, this can be perceived to be a representation that includes information on the doings of Wal-Mart thus, a person may not be able to fully tell how the Wal-Mart company is fairing on in that particular subject (Schaltegger, 2006).
3.0 Sustainability Index
In the last few recent years most of the companies both domestic and international have reported their performance publicly in regard to achieving sustainability. This is because sharing information about sustainability is believed to have the following benefits towards various stakeholders, stakeholder relationships are strengthened, looks at new opportunities and risks, helps in identifying new markets and improve reputation. In addition, organizations can be able to present their progress towards attainment of sustainability through the set standards and certificates. The set standards provide guidance on how to better adopt and apply management practices on environmental and social issues to organizations. Large companies like the Wal-Mart have adopted given certificates and standards in relation to their suppliers that help them in maintaining and enhancing their reputation (Crowther, 2010).
Sustainability index can be said to be a tool that is used to help organization to progress and focus on getting sustainability goals on given areas such as labor activities, reduce green house gas emissions and having efficient energy systems. Through the sustainability reports, suppliers will be able to communicate and provide current information in regard to achieving the desired sustainability goals and objectives to the organization, end consumers and stakeholders hence in the end it will help in creating new opportunities. The standard sustainability report used by Wal-Mart was developed by the Global Reporting Initiative (GRI) which is a non-profit network. The Global Reporting Initiative reports are based on the framework that it will be easy for comparison of performance of various organizations and within organizations. In addition, combining information into one document helps organizations to be able to proceed to a proactive step towards reports and allows organizational processes to be streamlined hence, lead to an increase in efficiencies, lower liabilities and provide reliable financial statements in regard to a given organization (Lofthouse, 2007). Researchers and scholars have come with the conclusion that regardless of how green a product may be it has an impact on the environment. This shows that the best information an organization can gather from sustainability index about a given product is how much less of an impact it has on the environment more than the other products. In relation to the data collected a company may not be able to come up with a viable decision on which to rank the sustainability index hence, it may be a drawback to sustainability index (Norton, 2005).
In conclusion, I believe that both new companies and old established business entities should join together and work towards having a sustainability strategy. In addition, though, the companies may have different values and objectives. In the end they would all want to be durable and run on for long thus, they should all aim at having a strategy of sustainability. Over the years the Wal-Mart can be said to be among the first companies to have adopted the strategy of sustainability and though they have met different challenges they are achieving their goals of sustainability step by step.