Walmart: Nonmarket Pressure...

|Case - Nonmarket Environment|

By 2005, Wal-Mart faced a number of issues, which arose from its planned geographical expansion, its product extension and some which arose from its operating practices. Opposition to its geographic expansion was motivated by the threat that Wall-Mart harmed the culture of small towns by driving small merchants out of business through its low prices. Similarly, product extension was met with criticism from the interest groups who were threatened by Wall-Mart’s planned sale of low- priced groceries. The operating issues that the company was criticized for were low wages, inadequate healthcare benefits, harming the environment, violating workers’ rights and working with contractors employing illegal workers.

On the one hand, the customers, the employees and the vendors were the groups that had economic stake in the issues and therefore represented market stakeholders. While on the other hand, the government, the society-at-large and interest groups such as NGOs, unions and others had social interests in the issues and therefore represented nonmarket stakeholders.

Institutions such as Service Employee International Union (SEIU), The Union of Food and Commercial Workers (UFCW), community activists group ACORN, local NIMBY groups, National Education Association (NEA), National Federation of Teachers (NFT), national media, environmental groups and community organizations all criticized and attacked Wall-Mart for its practices.

The reasoning behind them targeting Wall-Mart was that, being the second largest employer in the country, it had a huge impact on every aspect of the life it touched upon. The interest groups’ goal was not to shut the company down, but to challenge the business model Wall-Mart had. As a consequence, Wall-Mart paid multimillion settlements to Immigration and Naturalization Services, Department of Labor, Environmental Protection Agency, Department of Justice and physical persons that filed lawsuits against the...