[Jewelry making - Article 00510] - Re: [Orchid] The Age of Walmart on CNBC

[Heather Plessner]

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    From:
    moneycentral.msn.com/content/CNBCTV/Articles/TVReports/P100061.asp 

    With a small-town culture, Wal-Mart dominates The company had to
    learn to do many things on its own because it started in little
    Bentonville, Ark., but that helped it become a retailing power. Has
    it gone too far? 

    By David Faber 8:57 AM EST November 10, 2004 

    Love it or hate it, Wal-Mart (WMT, news, msgs) is one of the
    greatest powers American business has ever seen. This year its
    annual sales will top $270 billion. It's the largest private
    employer in the United States with more than 1.2 million workers. 

    Wal-Mart sells more DVDs, groceries, bicycles, guns, diamonds,
    engine oil, bedding, detergent, dog food, sporting goods, CDs, socks
    and toothpaste than any other company in the world. It's the
    nation's biggest film developer and optician, largest private fleet
    truck operator, energy consumer and real estate developer. 

    To some Wal-Mart is an example of capitalism at its finest, a
    company whose success allows people of limited means to live well.
    To others, Wal-Mart is a predatory monster responsible for low
    wages, suburban sprawl and lost jobs. 

    "They're exploiting workers by the conditions that they have them
    working under, by the low salaries that they pay them and by
    depriving them of benefits that workers are entitled to," says John
    Sweeney, AFL-CIO president. 

    "If you listen to the outside world and you said, 'why is Wal-Mart
    different,' the people who don't particularly care for us might list
    all things you might have asked me about, health insurance, wages or
    whatever else. But the truth is, what makes us different is our
    logistics, our information systems, our culture," says CEO Lee
    Scott. 

    Indeed, what's important at Wal-Mart is sustaining the culture that
    founder Sam Walton created. It's a culture that expects managers at
    all levels to wake up early and work long hours. 

    Early hours 
    It's 5:30 a.m. when regional manager Pat Curran leaves her
    Bentonville, Ark., home. Around the world in Shenzen, China, Joe
    Hatfield, Wal-Mart Asia CEO, likes to hit the office by 4:30 a.m.
    Every Saturday morning, Wal-Mart's top execs get together at 7 a.m.,
    citing their biggest sellers and going over the latest sales numbers.
    Its semi-annual managers' gathering starts at 6 a.m. and gets right
    down to business. Even its shareholders have to get up early because
    Wal-Mart's annual meeting gets rocking by 7 a.m. 

    "It's like our management meeting we have on Fridays and Saturdays,
    and they're early meetings, but they're designed to get action
    started before the day is over," says David Glass, a Wal-Mart
    director and former CEO. "I used to always come to work at 6:30.
    That was just a time that worked out well for me. And when I'd get
    here, Sam would always be here. He'd get here about 3 o'clock in the
    morning." 

    Adds Scott, "David Glass has been retired for, gosh, four and a half
    years now, semi-retired now, and I try to get in to work at 6:25
    because he gets in at 6:30 and I just can't stand the thought that
    he might know more than me at first." 

    Wal-Mart's culture also comes from being in a small town. 

    "A lot of our competitors were headquartered in cities or operated
    in cities where they had access to wholesalers and other services
    that they could employ," Glass says. "We didn't have that. Being
    located in northwest Arkansas ... we had to do a lot of things for
    ourselves. And initially, we created our own distribution logistics
    network which served us very well. We were on the leading edge of
    technology because we had to do that to control the growth. And as
    we began to do things for ourselves, it gave us a competitive
    advantage over the other folks." 

    That small-town culture also creates an almost cult-like atmosphere. 

    Like almost everything else about Wal-Mart, the annual shareholders'
    meeting is the biggest in the nation. More than 18,000 people from
    around the world come to the Bud Walton Arena at the University of
    Arkansas. Like many Wal-Mart events, it's part pep rally, part
    revival meeting, giving management another opportunity to spread the
    gospel. 

    But for all the cheering, Wal-Mart remains wary of the outside
    world. 

    "You can see us getting criticized more and more and even attacked
    more and more," says Jay Allen, a senior vice president of corporate
    affairs. "The media, political leaders, it's going to continue." 

    Always improving 
    Wal-Mart can look paranoid. "I think it's probably with good
    reason," Scott says. "There's always somebody who's just really
    good, and if you ever get satisfied with what you're doing, you're
    in real trouble." 

    The focus on improvement usually leads to a focus on how to cut
    costs. Wal-Mart is relentlessly efficient. Whether it's the conveyor
    belt that makes sure there's no wasted space between goods moving
    through one of its 110 distribution centers or the company's health
    benefits policy under which employees bear a significant cost, no
    expense, large or small, is overlooked. 

    Scott and Chief Financial Officer Tom Schoewe earned a combined $14
    million in stock and cash in 2003. But on business trips, the two
    will share a $49 hotel room. 

    "Sharing rooms is a very symbolic part of what we do," Scott says.
    "It's also an equalizer. If I'm asking the district managers to
    share a room, but I won't share a room with Schoewe, then what am I
    saying? There are two different standards here? The customer is the
    most important thing for all of you, but for me I think I'll run a
    different standard. 

    "You can't do that. You can't do it because it's not how Sam would
    have done it." 

    Says Glass, "Sam has been gone for a number of years now, but he's
    still alive and well in this company to a great extent. There's not
    a day that goes by that I don't hear conversations around here about
    what Sam would do or how he felt about something." 

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