Group 2: Clara Nadya David Christian Ghifari Fadiama nto Nadia Febianita Peter Ronald Reonard Chandra

Introduction

Wal-Mart’s History 1945 Sam Walton started business by franchising a convenience store 1946 Sam Walton’s brother followed Sam Walton’s Path 1962 Wal-Mart Discount City was first established Sam’s Clubs was opened in this year for the first time 1988 Wal-Mart supercenter built for the first time 1992 Wal-Mart started to expand internationally 1999 Wal-Mart opened the first Neighbourhood Market 2006 Wal-Mart had $90 billion in this year

Wal-Mart’s Business Model  Wal-Mart has 2 main segments  Wal-Mart Stores and Sam’s Clubs  Wal-Mart stores has 3 product line  Discount Stores  Supercenters  Neighbourhood’s Markets  Sam’s Clubs  Memberships warehouse clubs  Aimed at small business, large family and non- profit organizations

Implementing a Stakeholder Perspective

Step 1: Assessing the Corporate Culture Mission Corporate Culture Value Norms Social Responsibility Program

Corporate Culture  Three basic beliefs : respect for the individual, service to their customers, and striving for excellence.  Market orientation : focusing on customers, defeating competitors, and increasing shareholder value.  Committed to “improving the standard of living for their customers throughout the world.”  Key strategy “broad assortment of quality merchandise and services at everyday low prices (EDLP) while fostering a culture that claims to reward and embrace mutual respect, integrity, and diversity.  Costs Low for EDLP

Step 2: Identifying Stakeholder Groups

Step 3: Identifying Stakeholder Issues Suppliers  Wal-Mart is well known for its operational excellence Expect suppliers to continually improve their system (turun 5% per tahun) Jika tidak, akan mencari supplier lain (Pressure)  Technology RFID Increase supplier cost to install RFID technology

Suppliers  Product Quality Wal-Mart wants low cost version  Move Production  From United States from cheaper locations, such as China

Employee  Female Employee  Promotions, Pay, Training, and Job Assignments  Disabled Employees  Deaf applicants  Rejecting a pregnant applicant  Disabled  Sweatshop Workers  Paid below minimum wage in their country

Employee  Illegal Imigrants  250 illegal imigrants at 61 stores in 21 states  Make “Shells” Companies  Low benefits  Work Hours  High Tax  Health Insurance  Breaks Time

Competitors  Decrease in Wages (3.5%)  Local Residents Lose Their Jobs

Environment  Tidak memenuhi Environment Requirement  Stormwater Regulation

Step 4: Assesing Organizational Commitment to Social Responsibilty  Matching social responsibility and corporate culture  Satisfying all stakeholders with the risk of:  Increased cost  Reduced profit margin

Step 5: Stakeholders Issues Primary Stakeholder:  Supplier  Employee  Government Secondary Stakeholder:  Environmental Groups  Media

Step 5 : Possible Solutions Primary Stakeholder:  Supplier -> Decrease price cutbacks (< 5%)  Employee -> Increase Welfare (wages, insurance, benefits, working conditions) and Improve HR  Government Regulatory Agencies* -> Comply with Regulations Secondary Stakeholder:  Environmental Groups (EPA) -> Comply buildings with Environmental Requirements  Media -> Clarify facts and CSR

Step 5 : Determining Urgency Stakeholder Issues Resources (Financial & Organizational ) Pressure from Stakeholder Urgency SupplierPrimaryPressure on cutting priceHigh Least Expected5 EmployeePrimaryWelfareMedium Highly Expected1 Government Primary Economy and EnvironmentMediumExpected2 EPA Secondary EnvironmentMediumExpected4 MediaSecondaryCompany ImageMedium Highly Expected3

Step 6 : Gaining Stakeholder Feedback  1. Stakeholders general assessment through satisfaction or reputation surveys

 2. Gauge stakeholders’ perceptions stakeholder generated media such as blogs, websites, podcasts, and newsletters can be assessed.

 3. More formal research may be conducted using focus groups, observation and surveys

Alfamart Case (South Sulawesi, 2013)  Perjanjian kerja sama antara peritel dengan pekerjanya di luar UU Ketenagakerjaan.  Perjanjian HANYA menguntungkan pihak peritel dan disimpan sendiri  Pihak peritel menahan ijazah asli, membebankan penggantian barang hilang dan kadaluarsa, mewajibkan karyawan laki-laki menginap di toko sebagai ganti security  Mengakibatkan utang karyawan bervariasi dari Rp4 juta hingga Rp15 juta.

Summary  Wal-Mart sparks ethical issues (mainly) concerning the following stakeholders:  Supplier  Employee  Government  Environmental Groups  Media  Wal-Mart must resolve it’s ethical issues, even if it results in an increase of cost  The Alfamart Case(2013) is another case where the company is punished when an ethical issue is left unresolved