Wal-Mart Issues Related to Intersect Investment
Wal-Mart had been struggling to keep up with its direction of customer intimacy. In a recent study conducted by National Newspaper Association (2006), 13% answered positive to how Wal-Mart has affected the community, 25% remained neutral, while 62% answered that Wal-Mart had negative effects. Since the greater part of the community is the major customer of Wal-Mart, a growing dislike would surely indicate that there is a very big gap between their targets of attaining customer intimacy. This is related to the issues faced by Intersect Investment where customer satisfaction has been down by 5% for the last five years.
Although customer intimacy model does not directly call for customer satisfaction but a growing trend in general would mean lost of trust among the customers. Like Intersect Investment, where there is a high employee turnover, Wal-Mart has had serious issues with employee relation. Unlike Intersect Investment where they are only facing right now, employee relations had been a long term problem of Wal-Mart. In 2003, in the run up to the primaries, Democrats began to make an issue of Wal-Mart’s wages and benefits. In 2004, Rep. George Miller of California released a report called “Everyday Low Wages: The Hidden Price We
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” And last year, organized labor put together two Washington-based groups: Wake Up Wal-Mart, backed by the United Food and Commercial Workers (UFCW), and Wal-Mart Watch, supported by the Service Employees International Union (SEIU). (Frank, 2006) According to the new management of Wal-Mart, the low salary and poor employee benefits are inevitable effects of the greater good offered by lower prices for the greater community. These are their efforts of gaining customer satisfaction through low prices but this does not align with the concepts of customer intimacy model.
WAL-MART’s Response to these Issues Wal-Mart offered little response to the growing antipathy of the greater community. They made donations to black NGOs probably partly to counter the growing dislike among the community on Wal-Mart. Wal-Mart’s giving to Black organizations increased by 424 percent over the past five years while Wal-Mart’s overall public contributions increased by only 105 percent, from 75,301,122 in 2001 to $154,537,406 in 2005 (Edney, 2006). This is maybe because their main focus is to counter the stress that is building up between Wal-Mart and the employee Union.
Even the donation to the black NGOs are believed to be one way to silence the Union who has members to the black NGOs. Wal-Mart had been also strong in their union busting and employee control. In a message to company managers posted on Wal-Mart’s internal website and published by The New York Times in February, CEO Lee Scott wrote: “If you choose to do the wrong thing… if you choose to take a shortcut on payroll, if you choose to take a shortcut on a raise for someone, you hurt this company. And it’s not unlikely in today’s environment that your shortcut is going to end up on the front page of the newspaper. ” (Frank, 2006)