Wal-Mart Sponsors Debate About Wal-Mart
By George Anderson
In a recent speech, Wal-Mart Stores CEO Lee Scott said, “You won’t find any case studies at the Harvard Business School highlighting answers for companies of our size and scope. If we were a country, we would be the 20th largest in the world. If Wal-Mart were a city, we would be the fifth largest in America. People expect a lot of us, and they have a right to. Due to our size and scope, we are uniquely positioned to have great success and impact in the world, perhaps like no company before us.”
In another case of exploring uncharted territory, Wal-Mart is bringing together a group of noted economists to the nation’s capital to debate whether the company’s impact on the economy as a whole and local communities is positive or negative.
Nate Hurst, a Wal-Mart spokesperson, said, “This is a first step in engaging in a dialogue that will be important to this company and to this country. There is a lot of information out there, and we want to try to get it all in the room and talk on a pretty high level about what the U.S. looks like with Wal-Mart in it.”
Some question the apparent risk Wal-Mart is taking by holding a conference where speakers will, at least in some cases, provide negative assessments of the company.
As an Associated Press report points out, even supporters of Wal-Mart see room for improvement. Jerry Hausman, economics professor at the Massachusetts Institute of Technology, is among those.
“Wal-Mart has brought lower prices to people, but some of Wal-Mart’s labor practices are questionable,” he said.
David Neumark, a senior fellow at the Public Policy Institute of California, a supporter of conservative economic policies and Wal-Mart, conducted a study to determine the retailer’s impact on employment. The study using data supplied by Wal-Mart looked at 3,066 of the company’s store openings in the U.S.
“The evidence is, on balance, more consistent with the claims of critics of Wal-Mart, although questions remain,” he told Business Week.
“The story we find is that Wal-Mart hurts wages, not so much in retail, but across the whole county,” he added.
Moderator’s Comment: Where do you come down? Is Wal-Mart’s economic conference an act of public strategy genius or a really bad mistake? What does the
company do to follow up the conference?
According to the Business Week report, the publication obtained advanced copies of all the findings to be presented at the Wal-Mart conference and
found even supporters “raise uncomfortable questions about Wal-Mart’s business model. Other studies validate the notion that it undercuts wages and benefits.”
Lee Scott and company will be presenting the results of an economic analysis study it commissioned Global Insight Inc., to conduct. Wal-Mart is said to
have given Global Insight access to all its internal wage and benefit information.
While there will be those who question its results, Global Insights maintains the study was independent. An advisory committee including representatives
from the American Enterprise Institute (a conservative think tank) and Brookings Institute (a liberal think tank) participated in the project.
The results of the study will be published on Global Insights’ web site on Friday. –
George Anderson – Moderator
- Some Uncomfortable Findings for Wal-Mart – Business Week
- Wal-Mart Sponsors Economic Conference – The Associated Press/Forbes.com
- Twenty First Century Leadership – Wal-Mart Stores, Inc.