Another day chasing the treadmill here in NE Ohio. Temperature tonight expected to hover around 10 above. Wahoo. A heat wave. Maybe a return to the concrete tomorrow at 5 a.m. We’ll see. In the meantime I was thinking about Wal-Mart and a very interesting story about that company in The New York Times Sunday, “Green-Light Specials, Now at Wal-Mart.”
When I was teaching ethics of mass communication at Kent State, I’d start each semester by asking students several questions. Who is the most ethical/unethical person you know? What company do you consider to be the most ethical/most unethical?
Every semester Wal-Mart was the runaway winner in the unethical company category.
If the story in the Times yesterday is accurate, it looks like Wal-Mart management is finally getting that message — and is using some two-way communication — dare I say it, public relations? — techniques to improve its reputation and financial performance and prospects. The article essentially looks at how Wal-Mart made the decision to “go green” — which had the effect of pushing its big suppliers to change their business practices as well.
But it also presents a modest case study of what we talk a lot about in public relations but don’t always see that much of — a company listening to its critics and then changing its business practices. Certainly, in this case, changes — from products to working conditions, pay and medical benefits — are tied to some large degree to Wal-Mart’s self-interest and business goals. Anything wrong with that if the changes also reflect the interests of customers, employees and investors? Nah. Although I’m sure you can argue that some (many?) of the changes don’t go far enough.
Here’s from the article:
A confidential 2004 report, prepared by McKinsey & Company for Wal-Mart, found that 2 percent to 8 percent of Wal-Mart consumers surveyed had ceased shopping at the chain because of “negative press they have heard.” Wal-Mart executives and Wall Street analysts began referring to the problem as “headline risk.”
So the company, known for bitterly rebutting critics or simply ignoring them, began working closely with activists to improve its labor, health care and environmental records.
It is hard to measure the financial return of a good image. But no one at Wal-Mart talks about headline risk anymore because the headlines have become largely positive.
And looking to the future:
Come February, it will be the job of Michael T. Duke, 58, who has led Wal-Mart’s international operations since 2005, to steer the company through the downturn.
As for Mr. Scott [Lee Scott, the chief executive since 2000], he will serve as chairman of the executive committee of Wal-Mart’s board until 2011. And he intends to increase the retailer’s lobbying muscle in Washington, especially regarding health care, energy and sustainability.
“As businesses, we have a responsibility to society,” he said this month, speaking to members of the National Retail Federation in his last public speech as Wal-Mart chief. “Let me be clear about this point.There is no conflict between delivering value to shareholders, and helping solve bigger societal problems.”
Saying all that, it’s hard to argue that Wal-Mart has become the model business or employer. The company still faces a class-action discrimination law suit, critics question its commitment to provide affordable health-care and other benefits, and, according to the article, the average wage for full-time employees is $10.83 an hour. Try raising a family on that amount some day.
Still, Wal-Mart appears to be listening — and changing. That’s something we talk a lot about in the classroom but don’t always see in practice.
And other organizations might want to consider doing some listening — and some honest talking — as well. Hey, Merrill Lynch. Did John Thain really spend $87,000 on a rug for his office?