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Stakeholders Model

In determining the public affairs strategy of Wal-Mart, there are many groups and individuals who have a stake in what Wal-Mart does. The stakeholders are those groups and individuals who have an economic and political stake in what the company does.
Stakeholders 1.Shareholders 2.Walmart Executives and CEO Mike Duke 3.Consumers 4.Employees 5.Suppliers 6. The Communities where Wal-Mart is located. 7. Non-profit Organizations 8.Enviromentalists 9.Politicians 10.Retailers (competitors) 11.Labor unions Primary/Secondary Primary Primary Primary Primary Primary Secondary Secondary Secondary Secondary Secondary Secondary Active/Passive Passive Active Active Passive Active Passive Passive Active Passive Passive Passive

Shareholders: The first group that has an economic stake in what WalMart does is its shareholders. These are the people who actually own shares of Wal-Mart and therefore are interesting in seeing a return on their investment. They hope the value of their stock will rise and they will see dividends. Shareholders are primary and passive as they are vital to the organization but do not take part in policy making. Walmart Executives and CEO Mike Duke: The top executives of WalMart and CEO have an economic stake in the company just as the regular stockholders do. Many of the top executives received stock options are part of their salary. They are primary and active stakeholders because they want their stock value to rise as a large part of their compensation comes from how well the Wal-Mart stock is doing. Consumers: Consumers have a stake in how well Wal-Mart is doing. They are primary and active because they are essential for the organization and play a huge role in the policy making. Sam Walton quoted There is only one boss The customer and he can fire everybody in the company from the chairman on down, simply by spending his money somewhere else.

Employees: Employees are primary and passive stakeholders because they are vital to the organization and do no influence the decisions of Wal-Mart. They have an economic stake in the company just because their job is their primary source of income. They want Wal-Mart to do well because then they will keep their job and their source of income. Suppliers: Suppliers are primary and active stakeholders because they provide Wal-Mart with all the goods and services that Wal-Mart sells. They rely on Wal-Mart for orders, jobs and profit. The Communities where Wal-Mart is located: Each of the communities that has a Wal-Mart located in it has a stake in how well the company is doing. Many of these communities rely on Wal-Mart not only for jobs but also for a place to purchase many of their day-to-day necessities are a low price. Without Wal-Mart in these communities, there would be people without jobs and families paying higher prices for the goods that they need. The Communities do no influence the policy making process of WalMart. Non-profit Organizations: Many non-profit organizations have an economic or market stake in how well Wal-Mart is doing. The Wal-Mart foundation provides many non-profit organizations with funding and if the company is not doing well, the Foundation is not going to do as well either. The Wal-Mart Good Works Foundation provides funding to programs that deal with community, education, environment and children. They do not take part in the policies of Wal-Mart. Environmentalists: Like many large corporations, Wal-Mart has been targeted as a violator of safe environmental practices. The Environmental Protection Agency (EPA) has cited Wal-Mart for violating storm water regulations and air quality restrictions. The construction of a Wal-Mart can stress citys infrastructure of roads, parking, and traffic flow. Therefore the environmentalists play a huge role in the policies of Wal-Mart.

Politicians: Politicians have a non-market stake in Wal-Mart for several reasons. First of all, politicians may or may not want Wal-Mart opening in their district. On one hand, it may be good for the community. Also, politicians may rely on Wal-Mart for campaign funding. Politicians do not take active part Wal-Marts policymaking. Retailers: retailers have a stake in how well Wal-Mart is doing and how much they are expanding. If a Wal-Mart moves into a community, changes are the other retailers in that community, especially if they are privately owned are going to lose money and may even be forced to close down. They do not influence the policies of Wal-Mart.

Labor Unions: Labor unions have a political stake in Wal-Mart has a strict policy about not having their workers unionized. Wal-Mart takes the position that they are better able to take care of their employees and provide them with the best benefits and compensation plans. Wal-Mart does not want interference from unions. As Wal-Mart has banned labor unions, they do not interfere in the policy making.

Mendelows Matrix for Stakeholder mapping

According to Mendelows Matrix the stakeholders of a firm can be classified as1) Observers 2) Key players 3) Bystanders 4) Crowd

OBSERVERS 1. Employees 2. Shareholders 3. Consumers 4. Suppliers

KEY PLAYERS 1. Goverment And Politicians of the opposition party

CROWD 1. General public

BY STANDERS 1. NGO 2.Environmentalis ts 3.Labor Unions

THE OBSERVERS include the employees, suppliers, consumers and shareholders. They have HIGH impact but LOW influence. They have to be kept satisfied as they help in the operation of the firm. Wal-Marts observers include its customers across countries, its employees, its suppliers like the gasoline and dairy product suppliers. Wal-Mart insists it trains and promotes women fairly, but in 2001 an internal study showed that the company paid female store managers less than males in the same positions and discriminated against women in terms of promotions.

THE KEY PLAYERS includes the government and politicians of the opposition party which has a HIGH impact and HIGH influence. They can easily influence and leave an impact any company by changing the policies, rules and regulations, tax laws etc. It also includes the owners who make decisions regarding the company like the No Union policy made for Wal-Mart workers. Recently Walmart was restricted to gain access to the retailer market in India by the government as it appeared to be a threat to the local Indian retailers.

THE CROWD is the general public who has LOW IMPACT and LOW INFLUENCE. They cannot really make a difference to the things happening. They cannot influence the policies and decisions of Wal-Mart. The public is only interested in buying products at a cheaper price which Wal-Mart provides.

THE BYSTANDERS are the ones who actually make a great difference in case of any wrong doings of a company. They have HIGH INFLUENCE and LOW IMPACT. They include the NGOs, the environmentalists and the labor unions who have to be kept informed. Environmental Agency EPA lobbied against Wal Mart for violating storm water regulations and air quality restrictions. Wal-Mart has a controversial history with its employees, since it prevented workers from unionizing and still does except in few countries like China. Also, it has been accused of employing illegal immigrants at minimum wages.

Solutions To The Problem

Wal-Mart reportedly can save the average family $3,200 annually, the company has historically received plenty of criticism regarding its treatment of employees, suppliers, and economic impacts on communities. Feminists, activists, and labor union leaders have all voiced their beliefs that Wal-Mart has engaged in misconduct in order to provide low prices. However, Wal-Mart has been turning over a new leaf. New emphases on diversity, charitable giving, and sustainability have contributed to Wal-Marts revitalized image. To measure how its eco-friendly products are faring with consumers, Wal-Mart launched the Wal-Mart Sustainability Live Better Index in 2007. This index allows Wal-Mart to track, on a state-by-state basis, consumers demand for low-cost products, health and welfare products, and green products. Wal-Mart has taken action to improve relations with its employee stakeholders. In 2006, Wal-Mart raised pay tied to performance in about one-third of its stores. The company also improved its health benefits package for 200 by offering lower deductibles and implementing a generic prescription plan estimated to save employees $25 million. A Wal-Mart spokesperson claims that more than 90 percent of employees are currently insured and that the company is taking steps to increase that number. In 2004, Wal-Mart formed the Global Ethics Office and released a revised Global Statement of Ethics. The intent of the Global Ethics Office is to spread an ethical corporate culture among its global stakeholders. The Global Ethics Office provides guidance on ethical decision making based on the Global Statement of Ethics and an ethics helpline Wal-Mart needs to relax its anti-unionization policy and allow its employees to freely choose to organize themselves in a union. They are getting walloped on every front for their commonly known unfair labor practices. Many in the public are sympathetic to the rights of workers to unionize and have a collective voice in the workplace. Wal-Mart has taken measures to show that it is against sweatshop labor. It has hired an anti-sweatshop expert to expand its global inspection program. The following year, Wal-Mart teamed up with the nonprofit Business for Social Responsibility to reinforce its global monitoring programs.

Wal-Mart also has contributed significantly to disaster management projects. The company donated millions to relief efforts for Hurricane Katrina, $3 million for earthquake relief in China. Wal-Mart attempts to help its associates who are caught in disasters, allocating $2 million in grants for associates whose homes have been damaged and creating a toll-free number for associates who need help. Wal-Mart needs to send its store managers and executives into local communities to give their time in the community in a meaningful way. It would also be a plus if salaried store managers were permitted to work on community projects on company time, rather than being encouraged to do things on their own time. Germany, England, and stores in South America have all not performed up to speed, and in fact Wal-Mart has had to close stores in all these locations because it was not ready to meet the needs of its new clients.

Global Responsible Sourcing Initiative

In 2008, Wal-Mart introduced its Global Responsible Sourcing Initiative, which contains the following policies and requirements that will be included in new supplier agreements: Manufacturers facilities must certify compliance with laws and Regulations where they operate as well as rigorous social and environmental standards set by government agencies, beginning with suppliers in China in January 2009 and for all other Wal-Mart suppliers in 2011. By 2012, suppliers must work with Wal-Mart to make a 20 percent improvement in the energy efficiency inside the top 200 factories in China that Wal-Mart directly sources from. Suppliers must create a plan to eliminate, by 2012, defective merchandise reaching the Wal-Mart supply chain. And by 2012, all suppliers Wal-Mart buys from must source 95 percent of their production from factories that receive the highest ratings on environmental and social practices.

If achieved, these goals will increase the sustainability of Wal-Mart suppliers significantly. Some critics, however, believe that pressures to achieve these standards will shift more of a cost burden onto suppliers. Walmart is targeting to become the largest retailer in china by following the above policies.

Current Scenario
Sustainability 360
Wal-Mart has attempted to address its environmental stakeholders by becoming a greener company. Some of the company goals include the following: Reducing greenhouse gases at existing store, club, and distribution center bases around the world by 20 percent by 2012 Designing new prototypes to be 25 to 30 percent more efficient by the end of 2009 Developing and implementing innovative energy-efficient technology into existing and new stores Reducing the amount of packaging in the supply chain by 5 percent by 2013 (which the company has promoted through annual packaging expos)

Wal-Mart has already taken strides to obtain its sustainability objectives. It has opened two environmentally friendly stores in McKinney, Texas, and Aurora, Coloradolocations chosen for their different weather and climate considerations. The stores get electricity from solar panels and wind turbines. The company hopes these experiments will provide examples of the ways building owners, scientists, engineers, architects, contractors, and landscape designers can work together to create stores designed to save energy, conserve natural resources, and reduce pollution To reduce energy consumption, Wal-Mart facilities are conserving energy in two major ways. First, most new stores include a daylighting feature enabling stores to dim or turn off lights as daylight increases and enters through skylights, thereby reducing the demand for electricity during peak hours. Second, Wal-Mart manages energy consumption by centrally controlling the heating and cooling of U.S. Wal-Mart stores Wal-Mart is also attempting to reduce fossil fuel use and to sell more green products Throughout 2009 Wal-Mart tested new technologies, including two types of hybrid trucks and two alternatively fueled heavyduty trucks, in order to achieve its goals of creating a more environmentally friendly trucking fleet. Wal-Mart is proud to point out that between 2005 and 2008 the company increased its fleet efficiency by 25 percent through its use of new technologies, routes, and loading procedures. Wal-Marts new goal is to double its fleet efficiency by 2015. Wal-Mart has announced a goal to reduce phosphates, a water pollutant that encourages the growth of oxygen-depleting algae and can kill fish and other wildlife, in laundry and dish detergents by 70 percent by 2011. The company hopes to use its worldwide influence to make a global difference in sustainability initiatives.

Savings: Is Going Green Cost-Effective?

Wal-Marts green initiatives have secured it the goodwill of many environmentally conscious consumers, but does going green save the company costs in other ways? So far Wal-Marts initiatives have racked up the following savings: $25 million/year in savings from auxiliary power systems on trucks to run the air- conditioning when trucks are stopped. The store further plans to double the fuel efficiency of its new heavy-duty trucks by 2015. $7 million/year in savings from replacing all incandescent bulbs in store display ceiling fans with compact fluorescent bulbs. Walmart announced that its facilities in California and Texas have secured positions among the top three companies, on four separate U.S. Environmental Protection Agency (EPA) Green Power Partnership lists. As a result of significant work in 2011 to continue our commitment to renewable energy through on-site energy, such as solar and wind, and green power purchases, Wal-Marts California and Texas facilities secured a spot among the top three on numerous EPA Green Power Partnership lists, including:

NO. 2 purchaser of green power among retailers NO. 2 among on-site green power generators NO. 3 among the top 50 largest green power purchasers, up from NO. 15 on this list in October 2011 NO. 3 purchaser of green power among FORTUNE 500 companies

Wal-Marts purchases of wind energy in Texas provide up to 15 percent of the total energy for more than 360 of our Texas locations. The energy comes from Duke Energy wind farm in Notrees, Texas, and produces electricity at the rate of roughly 226 million kilowatthours (kWh) each year, which is equivalent of washing 108 million loads of laundry enough for every household in Austin, Texas, to wash their clothes for a year. In Mexico, Walmart is buying energy from a local wind farm for 348 facilities and has installed solar panels on two facilities. In Canada, Walmart is testing geothermal, fuel cells, solar and wind, and is the largest corporate purchaser of low-emission power through a local provider of clean, renewable energy. Weve learned a great deal from our renewable energy programs in California, Hawaii, and Texas, and continue to explore opportunities to expand into additional states and globally, said Greg Pool Walmart manager of renewable energy.

Wal-Marts 2012 Acres for America program

Wal-Marts 2012 Acres for America program is helping conserve more than 49,000 acres of critical wildlife habitat across the United States. Acres projects connect existing lands to protect migration routes, provide access for people to enjoy the outdoors and help ensure the future of rural economies that depend on forestry, tourism and recreation. Wal-Marts Acres for America program is donating $500,000 to help protect, conserve and restore fragile urban ecosystems in Washington D.C., Chicago, Los Angeles, and New York City. This is the first time the program has helped reestablish critical wildlife habitats in urban areas.

Achieve The Dream

Achieving the Dream, a national nonprofit leading the nations most comprehensive non-governmental reform network for community college student success, has teamed-up with the Walmart Foundation for a new $2.5 million partnership to help community college students by increasing staff and faculty engagement. Our nation needs a better educated workforce and community colleges are widely recognized as the lynchpin in addressing this challenge, said Achieving the Dream Senior Vice President Carol Lincoln. This new partnership with the Walmart Foundation initiates a doubling-down effort by Achieving the Dream and our Leader Colleges to address common reform challenges and ensure that more students persist through school and earn their credential or degree. Walmart and the Walmart Foundation are proud to support initiatives that are helping people live better around the globe. In May 2010, Walmart and its Foundation made a historic pledge of $2 billion through 2015 to fight hunger in the U.S. The Walmart Foundation also supports education, workforce development, environmental sustainability, and health and wellness initiatives.

In conclusion, Wal-Mart is the number one retailer in the United States and is at the top of the Fortune 500 listing. Wal-Mart operates in many countries world-wide and is moving into new countries every year. Wal-Mart is also expanding as a retailer. They have expanded into many other sectors of the marketplace, including groceries, gas stations, electronics, and auto maintenance. Each year, Wal-Mart finds new ways to grow and offer more services to their customers. Each year, the number of people who have a stake in Wal-Mart also grows. Each year, more claims are made against Wal-Mart by the unions and other businesses that have been forced out of business. Wal-Mart is often able to uncut many other local industries and more and more local businesses are shutting down when Wal-Mart moves into town. The unions are filing more court claims against Wal-Mart because they encourage their workers not to join unions. In order for Wal-Mart to stay at the top of their game and follow the company strategy and achieve their key policy goals, they are going to have deal better with their stakeholders and make sure they guard their reputation well.