Corporate Eye

What? Wal-Mart Improves Its Reputation

Wal-Mart has long been the poster company for poor business practices.

In the US, the influential television station, Public Broadcast System (PBS) ran two programs in 2001 and 2004:

These were very comprehensive programs with supporting resources. They chronicled all that was bad with Wal-Mart.

The BBC also broadcast a number of stories about the company.

If you Google “YouTube Walmart” you get results such as:

Well, you get the point. Bashing Wal-Mart turned into a great sport. Then something happened — Wal-Mart started to rebuild its reputation.

  • They told their suppliers in China to improve their social and sustainability standards
  • In April 2009, they held a unprecedented 2 day conference for members of the media
  • They announced plans to revise pay and promotion programs
  • And they stepped up community donations to $423 million in the year ended February 1, 2009.

The results have not received much attention but Wal-Mart reputation ratings started to improve. Wal-Mart’s ratings on the two most prominent Reputation Indices indicate:

  • on April 29, 2009 the Reputation Institute announced that “… Wal-Mart saw the largest gains in reputation, improving their Reputation Pulse scores by more than 12 points from 2008 to 2009.”
  • also in April 2009, Harris Interactive (PDF) announced “The only company with greater improvement in its actual RQ score was Wal-Mart, whose score increased by almost 5 points.”

Not only is Wal-Mart improving overall reputation but it is being recognized for ethical practices. Note this remarkable chart from Covalence which tracks the ethical reputation of multinationals by sourcing information from the media, civil society, and companies.

 

Wal-Mart was still last in Covalence EthicalQuote ranking calculated for 27 companies in the Retail industry. Today it has jumped up to the third rank, behind Marks & Spencer and Home Depot, showing the best progression over the last year, while PPR, Bed, Bath & Beyond, and TJX are last. The US retailer is also climbing high in Covalence cross sectors ranking.

Wal-Mart may have been vilified in the past, but now they are getting some well deserved recognition.

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Ed Konczal has an MBA from New York University's Stern School of Business (with distinction). He has spent the last 10 years as an executive consultant focusing on human resources, leadership, market research, and business planning. Ed has over 10 years of top-level experience from AT&T in the areas of new ventures and business planning. He is co-author of the book "Simple Stories for Leadership Insight," published by University Press of America.
 
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Update :

CNBC has a new channel of content about WalMart highlighting its forthcoming program about the changes at WalMart here: http://www.cnbc.com/id/18803817/

This is an interesting development in itself: visitors to CNBC’s pages can see a slideshow and a preview of the programme, take a poll about WalMart and even buy a DVD of the program. You can see the program on CNBC on a number of occasions until October 5th.

I just started at a Wal-Mart supercenter in Texas. I must say that everything I’ve ever heard about Wal-Mart’s reputation is right on the mark. Their training program is unorganized, confusing and doesn’t concentrate on the most important parts of the job description, so they wasted hours of valuable time on insignificant issues. As an employee, we are supposed to get a 10% discount on many items (excluding most food), but you must work there for 3 months to begin getting that discount. Unlike any other employer I’ve ever worked for…they require you to work there for ONE YEAR before getting health insurance. They want to make sure “you’re devoted to the company” before they will devote anything to their most valuable assets. They stated that for every $1.00 in sales, Wal-Mart only nets 4 cents. They teach and force certain “ethical” practices down your throat, yet many of the managers and other employees don’t practice them. I.e. – “Respect for the Individual” — they respect their customers, yet reprimand and degrade employees in front of other employees AND customers. By the way, I’ve only been working there for 6 days and have already been flabergasted by some of the things I’ve seen. In the loading dock area, boxes are pulled off trucks and allowed to crash to the ground (including DVD players, vaccum cleaners, other electronics, glass jars of food). No wonder so many items are damaged. I’m gonna stick it out through the holidays, because I told them I would. However, Wal-Mart is definitely NOT a place in which I wish to risk my own sanity and “real” moral ethics. Next time you go to any Wal-Mart, look around and see just how many “smiling” faces you see. A majority of the staff is visibly unhappy, sad, and rude. I could go on, but I’ll give it a few more days and see what else I can witness.

Hi John,

Thanks for taking the time to post your comments.
Sorry to hear about your experience. I do shop at Wal-Mart and I my experience is that I find the employees very helpful. My only complaint is the long lines at checkout.
You might try discussing the problem with management.

Ed

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