her own first. She did not merely fail to avoid conflicts of interest, she invited them."... In November 2006, news came out that Roehm and Womack had left the company. Roehm said, "I was hired by Wal-Mart as a change agent a little less than a year ago. One of my first orders of business was to help spearhead a comprehensive agency review. Now that I have established the marketing communications organization and completed the agency review, it's time to tackle my next challenge. I have enjoyed my time at Wal-Mart and I wish my many friends and colleagues there much future success."...
"I think part of my persona is that I am an envelope pusher. The idea of change in general can be uncomfortable for many people, and my persona as an agent of change can prompt that feeling."1
- Julie Roehm, Former Senior Vice President Marketing, Wal-Mart Stores, Inc., in 2006.
"When we fired Ms. Roehm, we had no intention of sharing the details of her flagrant personal and professional misconduct, even as she made disparaging the company a centerpiece of her self-promotional campaign. Now, we must respond to her lawsuit and are in a position where we have no choice but to share the real story of what happened."2
- Wal-Mart Stores, Inc. in 2007.
"All associates work for the customers who buy our merchandise. In fact, the customers can fire everybody in our company. And they can do it by simply spending their money somewhere else. The greatest measure of our success is how well we please the customer, 'Our Boss'. "
- Sam Walton, Founder of Wal-Mart1
"Our commitment to meeting the needs of each individual Customer can be fulfilled only by recruiting, developing and promoting the very best people we can find around the world".
- John B. Menzer, Head, Wal-Mart International Division in 2003.2
"Our family is proud of the accomplishments of our Wal-Mart Associates around the world. Without their dedication and commitment, there would be no Wal-Mart."
Rob Walton, Chairman, Wal-Mart in 20033
'Good to Great'
In 2003, with sales at a quarter of a trillion, a double digit growth rate, and employees exceeding 1.3 million, Wal-Mart was one of the most successful companies in the world. Not only was Wal-Mart the biggest retailer in the world, it was also the biggest customer for companies like Disney, Proctor and Gamble, Revlon, Campbell Soup, Gillette, etc. In addition to this, it was the biggest seller of DVDs, CDs, groceries, guns, diamonds and a number of other products in the US. Wal-Mart was a super-retailer where a customer could get whatever he wanted under one roof. The company thrived on convenience and reasonably priced products.
Wal-Mart always gave more importance to volumes than margins and promised customers the lowest prices on every kind of goods. Analysts believe that culture is one of the most important determinants in making a good company a 'great' one. The success of Wal-Mart has long since been attributed to the company's strong cultural base. Analyst Jim Collins4 observed that Wal-Mart had the kind of 'cult-like' culture that is shared by all great companies. Even the employees of Wal-Mart were sometimes referred to as "Walmartians" by outsiders, reflecting the distinctiveness of the people who shared that culture. It was a wonder that a company of such a huge size and scope could maintain its entrepreneurial spirit so many decades after it first started, besides achieving admirable growth rates which were poised to make it the first trillion dollar company in the world.
Good to Great'
However, over the years, the company became the target of much criticism. It held the record for having been sued the maximum number of times. Its work culture was criticized on various grounds which included gender-based discrimination, its overtime policies, using sweatshop products and 'killing off' small local business.
Background
Wal-Mart was the realization of the dream of Sam Walton (Walton), who wanted to set up a store which provided customers 'high value, low prices and a warm welcome.' Walton was born on March 29, 1918, in Kingfisher, in the state of Oklahoma. While he was in school, he worked parttime in his father's store which gave him his first experience of retailing. In 1940, he graduated with a bachelor's degree in economics from the University of Missouri at Columbia. Soon after graduating, he worked as a management trainee at JC Penney5. In 1942, he joined the US Army as a Captain in the Army Intelligence Corps and worked in that position till the Second World War ended in 1945. On returning to civilian life, Walton decided to start his own store. His father-in-law (Walton got married in 1943), who was a banker, helped him with a loan of $20,000 to set up a Ben Franklin variety store 6 in Newport. Walton did not have any business experience. He soon gained the requisite experience by attending training programs conducted by Butler Brothers for their franchisees. He also visited a competing departmental store across the street, to observe their prices and policies, and derived valuable inputs. Walton's store was very successful. Most of the success came from his innovative ideas. He realized that he could obtain competitive advantage by buying products in bulk directly from manufacturers and offering them at lower prices to customers.
He also kept the store open for longer hours than his competitors and took advantage of its good central location. In the very first year Walton earned a profit with his cost-cutting ideas. Within five years his store became the number one Ben Franklin store in a six state region and had earnings between $30,000 and $40,000 per year. Some of the important operational policies adopted by Wal-Mart in later years, such as giving importance to store location, purchasing in bulk and maintaining longer store working hours, had their roots in Walton's first store. Unfortunately, due to carelessness in negotiating the lease agreement, Walton lost his store in early 1950
Plan". The plan offered an opportunity to its employees to improve their income depending on the profitability of the store. Employees were also offered stock options and store discounts. This was to motivate them to take an active interest in the working of the company. A system of performance linked compensation and bonus also ensured that employees contributed their best to the organization. One of the unique features of Wal-Mart's human resource policy was that the company did not authorize overtime work. It did not allow store managers to overburden employees with work. The company was also committed to improving the career prospects of its employees. It had a policy of recruiting more than 70 percent of its personnel in managerial positions from the ranks of hourly workers in the stores
store level. Therefore, some stores deviated considerably from the corporate principles. In view of the flak it received, Wal-Mart began some change programs in its stores. It developed a posting system for all management jobs so that all the employees could be informed about them and be given the chance to apply for promotions