The Walmart Effect - Article Review Essay Example

The world-famous and astronomical phrase "The Walmart Effect" implies the economic impact felt by local proprietors or enterprises in the event that a megacorporation company of Wal-Mart stores calibre opens a chain store in the area where they operate. The question on the suitability of the effect on the world's economy is debatable and arguable since it has both positive and negative repercussions. The corporation's way of doing business is not only impeccable and concealed, but also incontrovertible, as efforts to challenge the reputable Walmart stores have proven futile (Fishman, 2006). Therefore, the analysis and review of the article are imperative in understanding the impact and the behavior of Walmart effect and the effects of other mega-corporations in the world's economy.

Is your time best spent reading someone else’s essay? Get a 100% original essay FROM A CERTIFIED WRITER!

Order now

The scope and scale of the buying power of Wal-Mart store as a retail entity is astronomical and can influence easily the prices it chrge consumers and pay suppliers. Furthermore, compared to and or regardless of other businesses within its environ Walmart stores is capable of selling it merchandise at a lower retail price. It is for the above reason that the phrase "The Wal-Mart Effect is crystallized and has a tremendous cascading effect not only into the retail market but also into production and manufacturing.

Negative and Positive Aspects of Walmart Effect

Arguably, according to the article and researches, the Walmart effect and its market monopoly predominantly in the United States and in the world is a menace to retailers due to the adverse impacts it imposes on their businesses. The article explores the adverse effects of Walmart effect and presents the following. The world megacorporation is the master mine of the collapse of smaller retail firms out of business as well as wage reduction initiator of competitors' employees (Roberts & Berg, 2012).

However, economists ascertain that the Walmart effect has some positive impacts on the US economy and the world at large. For instance, the study reveals that the Walmart Supercenter in California benefits the neighbouring communities by upholding small business growth, additional job creation, and robust sales tax revenues. Furthermore, the article's author also posits that the Walmart effect keeps the employee's productivity at an optimum level, thus, helps to curb inflation as well as saving the consumer billions of dollars but at the same time maintain competition and reduced wages in the area of operation (Hicks, 2007).

In my viewpoint, even though the megacorporation's ripples effects to the local businesses are detrimental and adverse as it causes the downfall of those businesses, the benefit it beholds to the US and the global economy is significant and outweighs the demerits, hence effective.

Walmart's policy of "Always Low Prices"

The question on the support of the Wal-Marts policy of always-low prices is contentious and debatable. The articles reveal that the Walmart's obsessive and brilliant ideas of focusing at one single organizational core value and its commitment to deliver low prices produced forth the most powerful and the largest company in the history of the world. Moreover, the peculiar policy by Walmart stores of "Always Low Prices" is also the driving force behind the astronomical economic train "The Wal-Mart Effect". Furthermore, the article highlights that the policy has not only been a plus to the consumer as a way of their expenditure but also an important strategy to regulate inflation. Conversely, the policy has imposed direct adverse effects on local business in the locations where Walmart's stores operate as some have collapsed and closed down because of too much pressure from the Walmart effect.

According to the article, the author posits that because of the policy, the multi-billion company has gained economic power thus decides and dictates the economic bearing in America and beyond. For instance, the author highlights a case of the unpleasant plastic deodorant box that troubled the American and Walmart fought to eradicate and save Americans billions of dollars during those tough times. Inferably, I view this policy of 'Always low price' as a trap and as suitable price control strategy to those small entrepreneurs who take advantage of consumers demand to hike prices that in most instances perpetuate inflation. In addition, the policy has not only made the reputable Walmart successful and influential but also impervious from the consumer sector to manufacture to producers and suppliers.

Personally, am compelled to pose the following questions, what could be more democratic, legal, and appropriate than a company created purely from the preference of ordinary American People, voted willingly with their credit cards, driven by nothing but by their liking and choice? Do we value economic fair play as one of the well-defined 'rules' of business operations? Therefore, I believe that Walmart stores should be given accolade for their genius policy of "Always Low Price" since the centrality of the very policy in the global economy is unquestioned and that the merits the effect beholds, surpass the highly opposed Walmart effect.

Recommendations to Walmart's workforce

Intuitively, Walmart's management issues are widely based, meaning they affect not only the Americans but also the global economy at large especially in locations where their stores operate thus recommendations, and decision-making should flow suite. Nonetheless, similar to any other international corporation, Walmart stores face various challenges in their day-to-day operations. One of the difficulties facing Walmart is the management of the more significant employ base of approximately 2.2 million people. As a manager in the corporation, I will foster integrated sustainable management strategies to oversee successfully the world's largest privately managed workforce thus the following are my recommendations.

Primarily, following the majority of the employee's outcry of poor working conditions, will advise that departmental managers should be empowered more help both financially and technically to better the workforce experience. Still, on the departmental managers, I will also recommend for consecutive days off duty to limit office familiarity and ill-treatment of employees. The above will ensure that the career development in these sectors will be based purely on hard work and performance.

Additionally, some of the highlighted challenges faced by the employs are negligence on the side of managers especially the merchandise directors on employees' weakness inculcating new operation process and technologies into the business. I will advise for effective capacity building and training of 2.2 million workers to be up to date and in tandem with the new technological advancements in the business. Speaking of technology, I will also advise the use of Management Integrated System (MIS) as the best strategy to manage a business of Walmart's calibre.

The bottom line issue and the amicable solution to the Walmart's workforce-related matters are that the mega business needs to reduce its workforce drastically to a manageable level and save on its expense. Furthermore, nearly a half of the Walmart jobs are part-time jobs, reducing the workforce more fulltime jobs will be created, and the majority of the employees will be happier to secure this positions and shareholders satisfied with higher profit accrued from lower total employees' wages.

In conclusion, Walmart's market mix is invaluable and proven effective. Although the Walmart effect causes adverse ripple effects to smaller business regarding low wages, low prices and collapse out of business, the benefits it beholds to the economy outweigh the disadvantages. Regarding the workforce, it is cumbersome to keep what you cannot manage; hence, the business's best solution is to reduce the workforce drastically to a manageable level to cut on expenses and train them for higher productivity.

References

Roberts, B. R., & Berg, N. (2012). Walmart: Key insights practical lessons from the world's largest retailer. London: Kogan Page.

Hicks, M. J. (2007). The local economic impact of Wal-Mart. Youngstown, N.Y: Cambria Press.

Fishman. C. (2006). The Wal-Mart Effect and a Decent Society: Who Knew Shopping Was So Important? Academy of Management Perspectives.