Creating value at Walmart

Maximizing share holder wealth and ethical treatment of employees in Walmart

            To maximize shareholder wealth big American companies firstly focus on maximizing profits. With an aim to maximize these profits, companies are paying lower wages to their employees in order to reduce on their overall costs. Companies are also scrimping on capital investment. Such initiatives help maximize profits as well as shareholder wealth but they are hurting to the economy (Massengill, 2013). The shareholder wealth maximization goal for Walmart Company states that the company should be run in a way that maximizes the wealth for shareholders. The progression of this goal in Walmart can be determined by looking at the stock price. It contains information that used by investors to understand the current profitability and the future profits and opportunities of the firm. In its maximization of shareholder wealth, Walmart violates the rights of the employees and majority of its associates face wages below the poverty line. This practice by the company is ethically inappropriate though the company’s business models are successful (Massengill, 2013). Walmart workers are in a state of poverty and receive no help from the company whereas its owners have a higher percentage of combined wealth. Walmart is recently working to make change through a coalition with all its associates to repair their state of economy.

Being a good corporate citizen in the different countries where Walmart does business.

             Walmart has tried to play various roles as a good corporate citizen. It offers goods needed by consumers at a lower price hence satisfying the wants and needs of those consumers. Among other companies, it is selected as one of the companies with good stores selling socially responsible commodities for its citizens (Spotts, 2005). It has made some improvements in its image and operations to ensure that it meets the corporate social responsibility. Shareholders have also started emphasizing for social responsibility in the company. The company is successful in selling a wide range of commodities from groceries to luxurious commodities like televisions. The company has also invested its finances in charity drives, lobbying campaigns and working in popular causes for example carbon and childhood emissions to build support in congress (Spotts, 2005). Walmart is doing all these to protect its image among the citizens. However, all these have not helped it as such. The company has been criticized of destroying neighborhoods, discriminating against female employees and over exploiting its workers with low wages and salaries hence opposing its efforts to be a good corporate citizen.

Moving from a privately held company to a publically owned company and the issue that come along with that change

            Walmart evolved from Sam Walton who strongly believed in leadership through service and hence inspired it and basing on this principle, Walmart was built. It was started by Sam Walton as a privately owned business enterprise in 1962 (Fishman, 2006). Later on in 1970, the company went public where the earnings financed the expansion of the business at a steady rate (Fishman, 2006). This was to get support from the government in order to finance and support its activities which resulted into reduced costs hence raising enough proceeds for expansion. This later called for further expansion of the business to other countries.

References

Fishman, C. (2006). The Wal-Mart effect: How the worldś most powerful company really works - and how itś transforming the American economy. New York, NY: Penguin Press.

Massengill, R. P. (2013). Wal-Mart wars: Moral populism in the twenty-first century.

Spotts, G. (2005). Wal-Mart: The high cost of low price. New York: Disinformation.