GWU Issues Management

A blog established for the George Washington University School of Political Management's Issues Management course.

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A middle aged white guy, who likes to think, talk and, too infrequently, write about politics, religion and gadgets.

Sunday, February 04, 2007

What Kind of Green is Wal-Mart

The color green is a metaphor for two things, environmental senstivity and money. Which describes Wal-Mart? Are they about true environmentalism? Or is their environmentalism a PR stunt? Or is it another excuse for squeezing the life blood out of their suppliers so they can make more money?

Check out this story from the The Guardian in Great Britain. I describes a speech delivered by Wal-Mart's CEO, Lee Scott, outlining the company's Sustainability 360 campaign designed to make Wal-Mart, and, importantly, its suppliers, more environmentally senstive. Is this campaign real? Or is it just an exercize in issues management?

I'd like to make this post an exercize in message development and delivery. Please read this article and comment.

But here's the twist. When you go to the comments section to post your comment, take the opposite view of the last post. If that post supports the company's sincerity and effectiveness in protecting the environment, take the view of a cynical skeptic...and vice versa.

Have fun with it. Back up your position with whatever facts you can assemble, either from the article itself or other sources, such as the book we are reading. But feel free to go over the top. This is the blogosphere. Provocative is good. And short is good, took. You only really need to make one solid point.

And thank you, Bradley, for bringing the article to my attention.

23 Comments:

Blogger rach a said...

This comment has been removed by the author.

6:04 AM  
Blogger rach a said...

I thought I would bring up two sentences that make the same general point: Wal-Mart leadership has been guided around "opportunist" tendencies. A Bentonville beast, businesses operate around what opportunities might be available. But on the first comment, the response PR wise was not great and could have been worded differently (such as "growth" vs. "moment"), because it assumes that Wal-Mart was not devastated by other tragic disasters:
"Yesterday Mr Scott said the moment Wal-Mart decided to get serious about sustainability was when Hurricane Katrina devastated New Orleans."

On the second comment, again the sensitivity of Wal-Mart to outside perception and business practices is at an all time high: "Quite honestly I am not oversensitive to the issue about whether or not our people fly about and whether we should have planes."

6:06 AM  
Blogger Christopher said...

I believe that Wal-Mart is absolutely sincere in its commitment to be a "greener" company, and I think it's true in both senses of the word: environmental and financial. When Lee Scott talks about changing the packaging on one toy supplier, he notes that there are both environmental and economic benefits. This is nothing new: in "The Wal-Mart Effect," it was noted that Wal-Mart was the cause of deodorant companies ending their usage of cardboard boxes for their products. This saved Wal-Mart and its suppliers money and it saved countless trees. Will "going green" be good for Wal-Mart's bottom line? Almost certainly. That doesn't mean that their commitment to the environment isn't sincere. I say "good for Wal-Mart!" This is another example of Wal-Mart doing the right thing and still finding a way to make it profitable.

11:53 AM  
Blogger Danny said...

It may be true that Wal-Mart really does care about the environment, but I doubt they would be pursuing environmental sustainability if it didn't also provide financial benefits. The reason Wal-Mart forced suppliers to get rid of deodorant was to cut costs, not save a few trees. I'm sure they care about the environment, but making profits is definitely their primary goal.

In this instance Wal-Mart has seized upon an opportunity to cut costs and get positive publicity by making themselves look like friends of the environment. It sounds like a sound business decision to me.

11:22 AM  
Blogger Brian C. said...

This comment has been removed by the author.

12:02 PM  
Blogger Brian C. said...

"sincere" (as hard as that is)...

I commend Wal Mart for taking the fist steps in assuring that their suppliers are more environmentally friendly. If you take this into the bigger picture it is a win for the environment. As the second biggest company in the world, they can be the roll model and inspiration for other companies to follow their lead - acting almost as a mentor in how other companies can be greener. This hopefully will start a mass movement of big business leading the fight in protecting our environment.

12:04 PM  
Blogger Jason said...

I believe that Wal Mart is probably sincere in their motivation for going green. While their sincerity may be motivated by the other "green", it is still a positive step. Maybe Wal-Mart is turning a new leaf - there was this story (http://news.yahoo.com/s/ap/20070207/ap_on_bi_ge/wal_mart_health_care) put out today about Wal-Mart meeting with Unions and looking into universal health care coverage. If Wal-Mart can reduce thier carbon emissions by just a slight bit, it would be a positive for all. If through the "Wal-Mart effect" they get others to do it as well, then so much the better. IAt any rate, I think the issue of their sincereity is entirely irrelevant, provided they follow through and take the actions they say. If its not born of sincere committment to the environment, but rather a sincere commitment to the dollar (and whats more American than that), they still win in the eyes of consumers and the environment wins out long run.

12:54 PM  
Blogger Alison said...

I do essentially agree with Jason that it doesn't really matter what's motivating Wal-Mart to go green. If their actions are beneficial to the environment, yet don't hurt customers, employees or suppliers (and it sounds like that's the case, but only time will tell), it's a winning situation for all concerned.

Ok, here's the skeptical, cynical part: I don't mind if Wal-Mart thinks that going green will help its bottom line and that's their reasoning. But the whole thing about Hurricane Katrina being a wake-up call to this huge corporation does smack of political opportunism, just a little. Maybe he's completely sincere when talking about how Katrina changed the company, but if that's not really the motivation, I think it's kind of gross and probably offensive to some to be waving that around as an epiphany.

1:08 PM  
Blogger Justin P said...

Some of the previous comments have highlighted the use of a reference to hurricane Katrina as an example of "opportunism." Some have even argued that references to the devastation caused by Katrina are taboo and potentially offensive.

However, I would argue that if environmental groups and Hollywood film-makers are commended for their efforts to raise awareness about climate change using the concept of "dangerous weather" to push forward their own projects then it would be strangely hypocritical to argue that a business cannot cite the same events as wake-up call.

My guess is that the company decided that the issue of “sustainable production” would eventually become an issue and began examining their options. I find it unlikely that this decision didn’t involve a projection of long and short-term costs, but I don’t think that such an analysis is mutually exclusive with a genuine desire to do something positive for the environment.

A professional has an obligation to his company. Wal-Mart isn’t an NGO, it’s a business. If that business can rise above the existing standards to become more socially responsible it should, but these action have to be prudent as well. They probably identified this threat to their brand long ago, but they were perhaps not spurred into action until an event of this magnitude occurred.

Is it an opportune moment? Perhaps, but I doubt the objective is to encourage the “Whole Foods Market” crowd to shop at Wal-Mart. Instead, I see a company that realized it could make a choice it could be proud of while potentially inoculating itself against a growing threat for a cost that was found to be reasonable.

7:23 PM  
Blogger Seth said...

Wal-Mart's latest PR stunt is full of blatant insincerity. Reducing packaging by 5% is akin to throwing crumbs to a starving person.

Sustainability is NOW mainstream? The retail giant is a little late to the party. This small step is too little, too late.

In addition, saying that Hurricane Katrina changed the company forever is a desperate attempt to put a compassionate, positive, and human perspective on the company that does not even come close to posessing these qualities.

Even the company's attempts to be sincere are insincere, i.e. "This is about being a better company." Few people with negative perceptions of Wal-Mart will be swayed by this campaign. When the Waltons start championing environmental causes and put their money where their rhetoric is, or when Wal-Mart stops taking advantage of the lack of environmental regulation in other countries, then we'll know the company is serious about sustainability.

8:33 PM  
Blogger Bethany said...

I am skeptical of Walmart's motivations. Clearly, this IS a PR decision, despite Mr. Scott's claims to the contrary. Also, history shows that Walmart's suppliers will bear the brunt of the financial impact of "going green"--not Walmart. All that being said, however, it was a very smart move. With all the discussion in the media about global warming, this was a prime opportunity for Walmart to improve their image. In addition, although it's a small step, it is a step in the right direction. Any movement towards environmentally conscientious practices is an improvement. Regardless of their motivations, this is good for the the environment because Walmart operates on such a large scale.

7:18 AM  
Blogger Brooke said...

Unbelievable - biggest bunch of bunk I have heard yet from Wal-Mart. They may indeed be going 'green' in an effort to foster an environmental-friendly future, but I am willing to bet they only came to this conclusion because in the end they recognized they will save money. Wal-Mart has no regard to what effect this will have on their suppliers - specially the smaller ones. Mr. Lee outlined a “six path” strategy to going green which he insisted would be delivered without compromising growth or profits - OF COURSE NOT – it will only compromise the growth and profits of those forced to abide by Wal-Mart's new campaign; consider it a shut-up or get-out approach. Then again, they don't care because at the end of the day if going green is best for Wal-Mart - it's good enough for everyone else. Wal-Mart's decision to go green might also be taken more seriously if executives relaxed a bit on traveling via private jet, specially when on their way to a press conference to discuss their green campaign. Not impressed.

7:46 AM  
Blogger Susan said...

I agree with what most people have already said about it not mattering the motivations behind it. I do believe that they are making a sincere effort to be "green." If it also has effects on their bottom line, well who are we to judge them negatively for that. Very few companies take actions for completely altruistic reasons, and we should not be holding Wal-Mart to a different standard. The fact is regardless of the reason for their actions, they are being "green" and the "Wal-Mart effect" will have a positive effect on the environment not just as it relates to Wal-Mart but also other companies.

9:27 AM  
Blogger John said...

I believe that Wal-Mart is being sincere about their new campaign. Wal-Mart has felt the wrath of consumer-advocacy groups firsthand in the past few years, and they are smart enough to know that this sort of message will eventually hurt them much more than help them in the long run if they are unable to back it up with action. (“[Lee Scott] said the group's actions would prove it was sincere about sustainability.”)

I know that it would be incredibly naive to think that when CEOs open their mouths, there is ever 100% truth spewing out – but in this case, amongst the growing sustainability movement especially in the US, they have to put their money where their mouth is.

Wal-Mart is attempting to change the way they do business, thus changing the way the company is perceived. On health care, for example, check out the alliance they have formed with left-leaning Center for American Progress and the SEIU. Yes, they are a company with plenty of money to throw around – but businesses exist to make money, and they would not enter into such multiple campaigns if they were not going to back them up with some sort of action, as minimal as those actions may end up being. But, doing something is certainly better than doing nothing.

9:55 AM  
Blogger John said...

Sorry the health care campaign is at: http://thinkprogress.org/2007/02/07/health-care-coalition/

9:56 AM  
Blogger Nathan said...

I find it hard to commend Wal-Mart for their environemental efforts when, in reality, I tend to think that every action they take is motivated by profits or is done for PR purposes. Of course the outcome of their actions has positive effects on the environment, but I tend to agree with both Jason and Allison when they say that who cares why Wal-Mart has adopted these policies. As long as they aid the environment while not causing prices to rise, this seems to me to be a positive thing.

In the end, I am skeptical of everything Wal-Mart does so I have trouble commending them for their environmental friendliness when I assume that it is simply a combination of cost-cutting and PR rehab, but, as I said before, as long as it results in a healthier environment I can't complain.

10:13 AM  
Blogger Dulce said...

I strongly believe that the Wal Mart’s “effort” about green issues is completely false. This is obvious an advertising campaign because the last action that the company took in environmental issues was during Hurricane Katrina, two years ago. Now, Wal Mart wants to set a new agenda: to cut packaging 5% by 2013 but we don’t know if this measurement could have negative incentives to its suppliers if they don’t be able to cut packaging. Thinking about the lower prices that Wal Mart offers, I’m not sure if the cheapest products in the market can be produced under sustainable conditions for the environment.

11:02 AM  
Blogger Brandt said...

If it’s not a PR campaign than why would introduce this plan in front of the press. Wouldn’t the best place to introduce it be in front of employees at a staff meeting? Just by the mere fact that press are there and interviewing Mr. Scott makes the public relations team be involved in this initiative. The retailers are being asked to reduce packaging, not required which is a huge difference. That to me is not very concrete. Once they start installing solar panels on the roofs of their “Supercenters” I’ll buy into their green strategy. If they are serious, at some point they will have to make some choices between sustainability and profitability.

11:35 AM  
Blogger Stephanie said...

Might this be both opportunistic and authentic? We keep reading in "The Wal-Mart Effect" how concerned the company is at all levels for keeping costs low, so why is it so hard to understand that the company is telling the truth (although I doubt that the company is "not sophisticated enough" to impliment this PR campaign). Katrina was and should have been a wake up call for everyone for many reasons, and this, combined with the dropping prices of sustainability, have allowed the company to use the "Wal-Mart effect" for some good.

I think it is significant that the company decided to present their new policy in the UK opposed to the US. Pressure on environmental responsibility has been far greater in Europe than in the US, and Wal-Mart surely made a wise decision from a PR standpoint in announcing in London.

1:02 PM  
Blogger Lindsay Apfelbaum said...

"This is not an advertising campaign," he said. "This is not a publicity campaign."

While I completely disagree that it "is not an advertising campaign" (of course it is!) I don't think the reasons behind the decision really matter. In the end, as long as long as they are and remain environmentally responsible, what does it matter the reason behind it.

I agree with Stephanie that it is interesting that they announced this in the UK and not the US. Maybe that is to better emphasize the fact that they don't feel this should become a huge publicity stunt - its just something that needs to happen.

2:17 PM  
Blogger Will said...

While Wal-Mart's recent efforts can be easily derided as a PR stunt, there is much more substance to their shift than simple issues management. There is no question that issues management was involved in Wal-Mart’s decision, but I believe that the decision has a great deal to do with expanding their market and decreasing their costs.

Facing a market that is beginning to touch on oversaturation, Wal-Mart has to find ways to bring in a new customer base. This decision gives Wal-Mart an angle with which to pursue an expanded base. Additionally, encouraging (or coercing) suppliers into cutting packaging increases Wal-Mart’s distribution efficiency and profits.

With these motives, Wal-Mart is using the “greening” of their company for neither purely PR nor goodwill reasons.

2:41 PM  
Blogger Elan said...

I’m going to join in the suggestion of a number of my classmates that take a third-option in analyzing the motivations of Walmart in the company’s effort to “go green.”

The thing is, I’m not sure the question really is one of motivation. Certainly, in the realm of philosophical thought, the debate over whether intention or result is more key in determining the morality of actions and decisions is vital – but not so much when it comes to assessing the impact of Walmart’s efforts in this case. Is Walmart making an effort to be more environmentally conscious? Assuming they’re telling the truth, yes. Will they save money and become more profitable in doing so? Very likely. Is the effort to be more environmentally conscious motivated by a desire to be more profitable. I’d be willing to say so. But who cares?

The point is, Walmart’s doing it. They’re making an effort to be “green friendly.” Great. If they do it for the money involved, what’s it matter so long as it’s happening? Two-hundred years from now, when humans are still living comfortably on earth, when the thought and threat of global warming is a matter for history books, and someone says, “You know, we were in trouble there for a while, until this huuuuuuge company led the way in reforming business practices that were harming the environment,” it’s not going to matter to anyone that they made a few bucks along the way.

If Lee Scott is telling the truth and is correct when he says “I don't see that you have to have a trade-off. I see them as the same thing. By eliminating waste, you are driving out cost and by eliminating waste you are making a more sustainable planet. It's nice that you don't have to make a choice,” then great.

Hopefully he’s right, other companies will follow suit, they’ll make some money, and the world will be saved. How is that a bad thing?

3:05 PM  
Blogger Alison said...

Global warming is still a hot (ha!) issue in our culture. And until its shelf-life expires, it will be the butt of jokes on late night TV and the crusade of politicians, activists and celebrities.

Recently, the scientific community, politicians, celebrities, environmental activists and people who drive SUVs the size of Vermont all conceded that global warming was, indeed, real. It is important, therefore, for any big business to address it on some level. Most companies, like Wal-Mart, choose to do so by turning the spotlight from global warming back onto themselves.

They throw their hat into the global warming game by declaring their campaign against it. It's the PR way of helping to fight global warming. In fairness, I think they have no qualms about it - they're open about their motives. Still, though, since they are doing something, rather than nothing, they don't feel like it's necessary to blatantly say that and appear completely selfish.

3:39 PM  

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