Tuesday, July 8, 2008

Is Wal-mart Kosher?

To date, Y? has asked me to write this article over 100 times (estimation). Its not that I specifically enjoy making him wait for my commentary regarding the topic, but that I just have had tons of other things in my mind regarding Moishe House and in general. Keep in mind this topic was just spurred by constant conversation between myself and Y? about which we have differing opinions.

I have solidified my opinion regarding the company, corporate philosophy, and side effects regarding their existence in terms of today’s business world through multiple business cases and extensive studying in business school, though there is always much to learn when dealing with knowledge that is not 1st hand. For the most part, I believe I am in the minority when writing my feelings regarding Walmart, especially inside the Jewish community. I believe Walmart is the perfect corporation when only looking from a corporation viewpoint (i.e. no emotion). I can and will take that position when discussing corporate culture because most stockholders will take the same position and they truly drive the company. Walmart is as one senior executive said on television, “a speeding train, It wants to hit something.” They strive to only compete on cost, they relentlessly drive down costs and are rewarded with more business, especially in this day and age where another price quote can be only a click away. Customer service is a luxury only afforded by the wealthy and Walmart realized this quite a while ago. They then worked to establish the framework necessary to truly become the low cost leader:

* A cheap unskilled workforce
* Leveraged Supplier Relationships
* Corporate Themed Cost Cutting

Walmart took the American business model and perfected it. Their supply chain can not be beat and their supplier relationships basically mirror the foreign policy mantra of Theodore Roosevelt. There are obviously consequences to being the most powerful supplier in a world of consumers, the most damaging of which is increased scrutiny regarding anything and everything. Walmart is A-List star in a world of D-Listers and the paparazzi are all over them. Now that we have established my admiration for Walmart; it is time to convey the true advantages to their existence.

Many of the times that I have conversations regarding Walmart, it involves my defense of the merit of Walmart's existence in small-town America. These conversations many times flat out come down to my personal opinion regarding such indulgences. For all their horrible labor violations, they save the average American consumer $2,500 based on a study compiled by Global Insight (commissioned by Walmart). For the 70% of Goods in their shop that are manufactured in China, they employ 2.1 million people (At an average wage of $10.11 an hour). One must make a comparison between the personal advantages afforded and the personal disadvantages endured. I can shop at Walmart because I am not completely disgusted by their less-than-reputable human rights record. I am absolutely appalled by some of the stories that I hear, but I can silence my conscious while I shop there. Some Americans can, some Americans can’t, and quite a bit of Americans can not afford to. As much as I hate to admit it, I take their horrible record with a grain of salt, because it is a means to an end; that end is providing the customer with the lowest priced goods and improving the quality of life of the customer which has and always be the most important stakeholder in your company. They will never be a corporate beacon for all others to emulate, but at the same time they will never be a corporate pariah despised by all.

1 comment:

Dan12 said...

I would like to applaud you for writing this piece. I consider Wal-Mart "treif" and refrain from shopping there or Sam's Club. While we me disagree on Wal-Mart, it is more important for us to be discussing and thinking about the ethics of a company like Wal-Mart, than just shopping their blindly or boycotting it ignorantly. So...on to my complaints.

You neglect the fact, from a shareholder perspective, that the company's practices hurt their brand image, which may drive down shareholder value now and into the future.

You largely dismiss arguments against the ethics of Wal-Mart's policies with the argument that since they are big, they are going to be targeted. If we use this same argument with the United States, the most powerful country in the world, it prevents us from legitimately addressing serious problems posed by U.S. actions. Using your celebrity analogy, there's a reason why Will Smith isn't blasted in the media and Britney Spears is...

You asked a provocative question, "Is Wal-Mart Kosher?" but you never really answered it. To ask if the company is ethical is one thing, but the title implies that you are going to take it on from a Jewish perspective.

Well, as a Jew, is your perspective not changed? Are we not obligated, as Jews, to demand the highest ethics? Shouldn't we see more purpose in this world than shareholder value or consumer value? If you believe that Wal-Mart is kosher, why not explain why the lack of adequate health care for the workers is worth the value that the company brings? Although Wal-Mart provides necessities at low prices, are they not also driving our out of control materialistic consumer culture?