Background for Hypothetical Consultation
Walmart, founded by Sam Walton in 1962, is the largest retailer and largest private sector employer in the world. It has a market capitalization of about $300 billion, with over a million US-based employees and a similar number in international locations. There are more than 5,100 Walmart stores plus almost 700 Sam’s Club warehouse outlet locations throughout the United States, while the firm also operates in 15 other markets worldwide. Long known as a low-price seller of garments, housewares and electronics, in the more recent past Walmart has aggressively moved into the fresh grocery sector and now accounts for some 20% of retail grocery sales. Members of the Walton family, heirs of founder Sam Walton, control 48% of Walmart stock. For the fiscal year that ended January 30, 2015, Walmart increased net sales by 1.9% to $482.2 billion and returned $7.2 billion to shareholders through dividends and share repurchases (Walmart, 2015).
The company exemplifies and has historically led the global transformation of retailing into a low-margin, huge volume and hence high-profit enterprise. A vital part of this business model is high labor intensity along with low labor costs – i.e., many jobs mostly paying low wages. Walmart’s dominance has some controversial aspects. It faces accusations of killing communities’ commercial vibrancy by driving smaller-scale (“Mom and Pop”) stores out of business. Also, many associates, as Walmart prefers to call employees, earn such low wages that they need food stamps and Medicaid to subsist.
Terms of Consultation
Walmart has engaged the M. Sowe consulting group to review past diversity initiatives and update its activities in this area. The aim is to provide a smoother-functioning work environment that will minimize bad publicity, which has become a problem for the company’s image. The consultation contract specifies a three-month observation period at a statistically representative sample of US stores, followed within 60 days by delivery of a report that will make general and specific recommendations. Walmart assumes no obligation to accept any of the recommendations. It can either pay the fee and terminate the contract, or renew it for an additional period or periods during which the M. Sowe group will continue to review Walmart’s diversity performance and make further recommendations.
In the realm of gender discrimination, Walmart has been repeatedly sued for unfairly restraining advancement prospects for female workers (Business and Human Rights Resource Centre, 2013). To date, no suit has been granted class action status for final resolution, so no general remedy has been available for all workers alleging discrimination. Nevertheless, this agitation has prompted various diversity initiatives on Walmart’s part for approximately the last ten years. Thus, diversity initiatives are nothing new at Walmart. The concept is now so routine that it is covered in lengthy annual reports, the latest amounting to 32 pages (Walmart Corporation, 2014).
The consultation by M. Sowe group was in part evaluative of past diversity efforts, and in this regard took the advisory position that the firm should avoid easily debunked claims. For instance, a TV spot showing a manager gratefully recounting her opportunity to rise from floor associate readily provokes skepticism among those who realize that the typical Walmart store has 500 hourly associates and a dozen people in some sort of managerial position. The odds are against a significant promotion regardless of an associate’s ability to handle higher level responsibility. The diversity of Walmart’s broad workforce in terms of gender, ethnicity and sexual orientation is undeniable – a million-strong nationwide workforce could scarcely fail to mirror the national population reasonably closely in these