Report on the Walmart and Corporate Social Responsibility (CSR)

Organisation of Walmart and Corporate Social Responsibility (CSR)

Walmart Inc. is recognised as one of the largest retailers in terms of a number of employees and revenues in the world. The business of Walmart is expanded by its intensive strategies and generic strategy and they also ensure its competitive advantage. The corporate mission of Walmart is concerned with saving the money of people so that they can live in a better manner. Meanwhile, the vision of Walmart is to be the destination where people can save money. It offers hundreds of consumable items such as pies, cinnamon rolls, trash bags, and light bulbs etc. Walmart exists to make purchasing affordable for customers (Ellickson, 2016). In recent times, there has been a significant focus on CSR or corporate social responsibility in terms of organisational benefits. Corporate social responsibility goes beyond being transparent to the public. It involves many other complex processes and procedures. When it is performed right, CSR is capable of not only benefitting an organisation financially but also in terms of reputation and operational efficiency (Melo & Galan, 2010). In this research, underlying concepts of CSR will be explained and it will be determined whether Walmart focuses on it or not.

Principle functions of Walmart of Walmart and Corporate Social Responsibility (CSR)

The main functions of Walmart include instore operations and major operating activities include purchasing, distribution and warehousing of the products for the customers.

Products and services of Walmart and Corporate Social Responsibility (CSR)

Walmart offers the retail goods to the customers with a variety of categories of items. The customers can access the services to buy digital cameras, computers, laptops, electronic products, and printers. Walmart also offers products of home furnishings, grocery items, sporting games, and baby products. Some other products that are provided by Walmart include fresh products, dry goods, bakery items, canned and packaged goods, health and beauty products, and frozen foods. Walmart offers several financial services such as check printing, money transfer, debit cards, credit cards, bill payment, and check to cash.

Reason of organization existence of Walmart and Corporate Social Responsibility (CSR)

The mission of Walmart Inc is to save the money of people so they can live better. The statement shows that ideals of the company and mission statement are to save money of customers.

Literature of Walmart and Corporate Social Responsibility (CSR)

It is now widely recognised that responsible organisations should engage with customers and stakeholders CSR issues and should communicate regularly about their CSR impacts, products, and programmes. This has included communication in advertisements, on products, in reports on CSR, and also through initiatives of stakeholder engagement. CSR communication is considered important for everything from rewarding responsible companies to convincing customers (Abdullah, et al., 2018).

It is possible to consider the CSR concept from several standpoints. For example, it has been linked to social performance, business ethics, accountability, and even corporate governance. Different theories have been utilised and considered for explaining the behaviour of various economic units associated with CSR issues including Stewardship theory, Stakeholder Theory, and Agency Theory (Gallego‐Álvarez, et al., 2011). It has been determined that managers should not just concentrate on the needs of stakeholders. Instead of it, they should satisfy different stakeholders including community organisations, suppliers, customers, and workers. It implies that implementing CSR programmes and activities that not strictly financial can significantly benefit the organisation because the unavailability of those practices might lead interest groups to take their support away from the organisation (Crane & Glozer, 2016).

Other than these overall theories that have been utilised for finding answers to different issues and problems, other theories and concepts more directly associated with corporate social responsibility have emerged. For instance, there is a resource-based theory that emphasises the significance of intangible capabilities and resources and considers them to be important sources of organisational success. Therefore, an organisation needs to possess some specific intangible resources that cannot be copied by competitors for gaining a competitive edge in the market. Capabilities and resources are utilised by organisations for developing and implementing their strategies. It has been determined that this theory can also be applied to corporate social responsibility in the sense that it can also be considered a resource that leads to competitive advantage in the market. In researches, this hypothesis has been supported by the fact that CSR practices were effective in creating sustainable competitive advantage. They also present the greatest opportunity that is currently available to businesses for achieving greater success through new technologies and products.

Innovation refers to the adoption of new services, products, processes, programs, policies, and systems that can be generated externally or internally. It has been determined that innovation can be recognised as effective exploitation of new concepts and ideas, using a base of existing information for creating new services and products or to develop already existing ones. From the perspective of resource-based theory, innovation is concerned to play a key role in the creation of value and competitive advantage. Regarding the connection between innovation and CSR, it is an additional area in the relationship between corporate performance and CSR that can be considered for improving performance.

Since the corporate scandals of the late twentieth century, the terms reputation and CSR have been related in the technical discourse. It has been determined that CSR and reputation are strongly associated with each other. Various studies from the management sector indicate a positive effect of activities related to CSR on the reputation of organisations and identify these activities to be an important strategic aspect or part of corporate activity. In addition to CSR, reputation opportunities are also provided by ethical behaviour. In stressing situations or situations of crisis, a commitment to CSR is capable of protecting organisations against negative publicity. Therefore, it is widely perceived as a key element of risk management. Generally, in the context of crises, organisations with effective CSR profile are exposed to lower risks of reputation than organisations with no such profile. Therefore, CSR activities and programmes provide opportunities and can be consequently applied strategically for achieving reputation and competitive benefits (Gallego‐Álvarez, et al., 2011).

Organisations are making the use of different CSR activities increasingly for positioning their corporate brand in the eyes of stakeholders and consumers. A common example is the release of annual reports for enhancing their transparency and gaining the trust of both stakeholders and customers. At the same time, it is debated in the literature whether companies should focus on communicating their CSR initiatives and they choose to communicate, whether traditional tools of marketing should be considered or not. An important thing to note is that not all studies seem to indicate that communicating CSR activities will result in advantages for an organisation because the release of reports and communication of activities might serve to trigger the scepticism of customers and stakeholders. Therefore, CSR activities and initiatives should be communicated if they are bound to result in the benefit of stakeholders and customers. If there is a possibility that they might not get a positive response from customers then they should not be communicated. Instead of it, modifications and alterations should be made to these initiatives, and then they should be communicated (Eisenegger & Schranz, 2011).

Walmart of Walmart and Corporate Social Responsibility (CSR)

The CSR strategy of Walmart relies on three principles:

·         Creation of economic opportunity for employees, people, and suppliers who work in supply chains and retail sector beyond Walmart,

·         Building strong and effective communities where retailers operate.

·         And optimising the sustainability of product supply chains and operations for both planet and the people.

It is the aim of Walmart to achieve three goals including supplying the organisation with totally renewable energy, creating zero waste, and selling products that sustain both the environment and people. In Britain, more than 10,000 grants were donated by Asda as a part of and in association with Chosen By You, Given by Us programme in 2014. In neighbourhoods and states, 100 million dollars were awarded by Walmart. Walmart seems to publish standards for suppliers. It specifies the expectations or organisation in regards to the safety and treatment of workers.

In 2015, 117,618 kWh less energy was utilised by Walmart in comparison with 2015. In addition to it, the organisation has formed the objective of reducing consumption of energy by twenty per cent by the end of 2020 in comparison with the 2010 baseline. In 2015, 894 trees were saved by the recycling initiatives implemented by Walmart. These findings indicate that all of these are intangible resources and they are utilised efficiently by Walmart. This strategy enables Walmart to create a competitive advantage in the market. These intangible assets are not possessed by other organisations and that enables Walmart to gain more customers and be more effective.

Strength/weakness of Walmart of Walmart and Corporate Social Responsibility (CSR)

The strength of Walmart is associated with the size of the business. All the competitive strengths enable the company to withstand the possible threats as low cost retailers. The strengths of Walmart include global organizational size, high efficiency of the supply chain, and global supply chain. Walmart size of the organization provides an additional benefit for the business to expand and grow fast (Panmore. com, 2019; Grant., 2007). The supply chain of Walmart is highly efficient due to the implementation of advanced technologies for control and monitoring of products from suppliers in the stores. Some weaknesses of Walmart impose challenges on the abilities of the firm and cause threats. The weakness of Walmart is related to the generic strategy of the company regarding the capabilities, development, profit margins, and resources. Walmart uses the generic strategy of leadership and the potential weaknesses of Walmart include thin profit margin, copied business model, and the competitive disadvantage of high-end speciality sellers. The thin profit margin is mainly due to the less effective leadership strategy. The cost leadership strategy is not having significant competitive advantages (Prieto, et al., 2014).  

CSR policies, practices and activities of Walmart and Corporate Social Responsibility (CSR)

Several authors in the literature have pointed out that Walmart is emerging as a private actor with the transformation in the CSR filed. Their research highlights the contractual relationship of Walmart for the regulation of behaviour among the global levels and the suppliers at the same time for the product quality, ethical conducts and working conditions for the employees and suppliers (Revak, 2011). In 2007, Walmart published a sustainability report that reflects new changes in the environmental and social dimensions. The report mentioned that Walmart believes in transparency and accountability as a part of the company’s responsibility. The annual report published the constant and progressive work for the social sustainability of the company. The policies of Walmart can be further divided into three main reporting parameters such as social, goals, and environment. Walmart claim that it is working on the new goals of reducing greenhouse gas emission and having a financial contribution to the investment of health, education, and commitments (Torres, et al., 2012). Revak (2011) analysed the CSR strategies of Walmart for the delivery of services. The research used Donaldson and Preston’s model and defined that CSR policies of Walmart are strikingly different based on sustainability, diversity, environment, and community involvement. The policies are designed to increase corporation stakeholder interactions. The CSR policies are further designed for the public through corporate websites. The system used by Walmart is suitable for cultural conditions. From a cultural perspective, Walmart uses a national-level cultural system that allows the interaction of the customers and company with each other. In case of services across the globe, the CSR policies are to portray the system as a best suitable from a national and cultural perspective. The CSR content of Walmart differs from quantity and detail (Abdullah, et al., 2018). The two sites of the system reflect three of the Roome’s CSR issues such as the responsibility of the business practices for the people and employees, sustainability development for the environment, corporate community involvement for community and cultural system in Walmart. There are several domains of the CSR system in Walmart and the volume information is provided about the activities. The cultural underpinning is responsible for the policies related to a sustainable environment, business practices, corporate community involvement and philanthropy. The diversity of policies is often under critical reviews. The CSR policies of Walmart are based on the co-regulation and public-private partnership. Due to glitches in the CSR policies in history, Walmart has been involved in social and environmental conflicts. The current polities, performance, and financial figures to play a significant role in model CSR for Walmart.

CSR implement explicit policies and implicit norms in the legal framework of sustainable business practices in Walmart (Elder & Dauvergne, 2015). The norms and practices of Walmart examine the cultural system to examine CSR practices of the company with the contextualization of growth within the company. From the perspective of the system model that is implemented in Walmart, there are certain issues and attitudes of the stakeholders that cause CSR issues. The business and cultural practices of Walmart are shaped by ecological factors. The system models understand the CSR practices and the shape of the model is bound to the cultural context. The CSR agenda of Walmart for the responsible business practices is focused on the high standards in the services, human resource practices and business (Collins, 2011). Table 1 below, summarize the CSR agenda that focuses on certain considerations in Walmart.

The CSR practices of Walmart are revealed in researches as two distinct foci. The website has focused on communication information under specific projects. Walmart directly deals with the number of customers and deliver services according to the requirements. CSR policies of Walmart involves the organization that is beyond the legal obligation and the interest manage the impact of activities on the environment and society. The CSR practices of Walmart do not appear as increasing the capacity related to the control of suppliers. Walmart increased the number of retail units and local procurement is increased by 40% as compared to the past (Prieto, et al., 2014).

The corporate social responsibility in Walmart is moderating the relation between financial performance and corporate reputation. Walmart is a profit-oriented enterprise that is engaged in socially beneficial activities. It works as a dual-purpose business that mediates the profit goals under the social objectives. The social enterprise possesses a sense of corporate social responsibility with the improvement of societal conditions. Walmart defines the social enterprise-based activities that work with three characteristics. Recently, Walmart announced the plans to spend more than 50 million dollars to focus on low-cost producers. The CSR activities are intractable and serve the common good through the services and products through some conditions. The common CSR activities of Walmart mainly considers commercial activities. In Walmart, commercial activities are generating strong revenue. The categories are simple for the income stream of non-profit mixed revenues. The firm engagement of the activities is related to the agenda of corporate social responsibilities. It requires great implications on corporate reputation. Walmart is maintaining a good footprint and seeking a balance of need to maximize the profits with the focus on the decision-making process. The CSR activities are challenging for individuals in the international market, but Walmart shows superior performance and gets reputational benefits.

Shared value approach of Walmart and Corporate Social Responsibility (CSR)

Shared value approach is the global responsibility of Walmart. The whole system changes with the change of system and working of others. The approach is to reshape to the whole system to achieve significant improvement in economic, environmental, and social outcomes. Walmart seeks to create value for the stakeholders across society and business (Crane & Glozer, 2016). The approach is to enhance business activities such as sourcing, merchandising, logistics, store operations, technology, and human resources. The strategies used in the operations are leadership practices, operational processes, operational tools, organizational roles and significant strategies. Aim of Walmart is to design the strengths and collaborative work for the transformation of the system. Walmart believes in business development due to shared value for society and customers. beyond the whole system, there are significant system changes and shared value (Gallego‐Álvarez, et al., 2011).

Conclusion of Walmart and Corporate Social Responsibility (CSR)

The corporate social responsibility (CSR) in firms and business is equally important. In Walmart CSR strategy mainly rely on three main principles. It considers the economic opportunity for people, suppliers, and employees. CSR activities in Walmart are enhancing product supply chains and operations. It works to develop strong communities where the retailers operate collectively.   

References of Walmart and Corporate Social Responsibility (CSR)

Abdullah, K., Ghamdi, A. & Dalain, A. F., 2018. Ethical Trading in Corporate Social Responsibility: A Case of Walmart, Apple and Canon. Asian Journal of Business Management, 10(01), pp. 1-10.

Collins, J., 2011. Wal-Mart, American consumer citizenship, and the 2008 recession. Focaal, Issue 61, pp. 107-116.

Crane, A. & Glozer, S., 2016. Researching corporate social responsibility communication: Themes, opportunities and challenges. Journal of management studies, 53(7), pp. 1223-1252.

Eisenegger, M. & Schranz, M., 2011. Reputation management and corporate social responsibility. The handbook of communication and corporate social responsibility, pp. 129-146.

Elder, S. D. & Dauvergne, P., 2015. Farming for Walmart: the politics of corporate control and responsibility in the global South. The Journal of Peasant Studies, 42(05), pp. 1029-1046.

Ellickson, P. B., 2016. The evolution of the supermarket industry: from A & P to Walmart. Handbook on the Economics of Retailing and Distribution.

Gallego‐Álvarez, I., Prado‐Lorenzo, J. M. & García‐Sánchez, I., 2011. Corporate social responsibility and innovation: A resource‐based theory. Management Decision.

Grant., R. M., 2007. Wal-Mart Stores, Inc.,. [Online]
Available at: https://www.blackwellpublishing.com/content/GrantContemporaryStrategyAnalysis/6th_Edition/case_teaching_notes/CSA6CaseNotes_05.pdf

Melo, T. & Galan, J. I., 2010. Effects of corporate social responsibility on brand value. Palgrave Journals, pp. 1-15.

Panmore. com, 2019. Walmart SWOT Analysis & Recommendations. [Online]
Available at: http://panmore.com/walmart-swot-analysis-recommendations-case-study

Prieto, L. C., Phipps, S. T. A. & Addae, I. Y., 2014. IS WAL-MART A SOCIAL ENTERPRISE? AN EXPLORATION OF THE RELATIONSHIP BETWEEN CORPORATE REPUTATION, CORPORATE SOCIAL RESPONSIBILITY & FINANCIAL PERFORMANCE. Academy of Strategic Management Journal, 13(02), pp. 51-60.

Revak, H., 2011. Corporate codes of conduct: binding contract or ideal publicity. Hastings LJ, Volume 63.

Torres, C. A. C. et al., 2012. Four Case Studies on Corporate Social Responsibility: Do Conflicts Affect a Company’s Corporate Social Responsibility Policy?. Four Case Studies on Corporate Social Responsibility , 08(03), pp. 01-10.