The Opposite of CSR

I have tried to support Walmart in spirit, even though I prefer shopping at Target. I support Wal-Mart's right to grow as big as the market will allow, to force their vendors to offshore manufacturing in the interest of lowering costs, and to prevent their employees from unionizing. I think that most of the crap in Wal-Mart is low-quality and unnecessary, but if they can provide large quantities of goods at low prices then they are responding to market demand.

I really like the way Wal-Mart operates their business. They keep the business lean from the top down, they protect shareholder profits with vigilance and thriftiness, and they think very hard about how to satisfy the customer, lower costs, and grow revenue simultaneously. That is exactly the way a capitalist firm should operate.

Moreover, they are leveraging technology in ways that boggle the mind. For instance, when you make a purchase from your local store, it is automatically subtracted from the database of that store's inventory kept in Bentonville, Arkansas. They streamline their shipping, track customer buying trends, and adjust for any kind of event or trend. Before a tropical storm becomes a hurricane heading near a Wal-Mart, they are already trucking out the supplies that they know will sell out in a hurry. Technology is enabling them to meet their threefold objective of customers, costs and profits.

Should Wal-Mart pay their associates more and supply better benefits? I reluctantly refer to the market; if employees are willing and able to work at the price Wal-Mart pays, then who are we to say otherwise? Personally, I wouldn't take a job there unless I was committed to working my way up and didn't mind a little poverty along the way. There are worse places to work than Wal-Mart, if the truth is to be told. I can tell you some stories...

I kept giving Wal-Mart the benefit of the doubt, thinking that Sam Walton's spirit was still alive at their core. I thought that they were simply a thrifty company that paid market prices for labor and offered an opportunity to climb the ladder for those who were dissatisfied with entry-level wages. I thought that in the end, they may be cheap but they were still human.

If MSNBC is to be believed, then Wal-Mart is without a soul and Sam Walton's spirit is no longer welcome in Bentonville. According to their story which first appeared in the Wall Street Journal, Wal-Mart has sued a former employee to recover their costs in treating her injuries from a major car accident. The victim, Deborah Shank, was hit by a tractor-trailer and left brain-damaged. Her family received over $700,000 from the trucking company and placed $400,000 in a trust for Deborah's care. The other $300,000 was eaten up in legal fees and other costs. Wal-mart sued, cleaned out the trust, and won the appeal.

Wal-Mart's spin is that they are protecting the health-care costs of current employees. That is very responsible of them; I am sure that the 47% of their employees who are eligible for coverage are very grateful. However, I think it is a well-established and universally-accepted ethic that when tragedy strikes, you respond with charity and leniency. There is no way I could look that family in the eye and tell them that they should turnover their entire settlement to a multi-billion dollar organization and be left to support Deborah through medicare and social security.

Worse still, her husband was advised that Deborah would be eligible for more public assistance if she were single. He was forced to consider divorcing his brain-damaged wife in order to improve the quality of her care. Ugh. What country is this, again?

I am a grown-up, a conservative, and a capitalist. I am well-aware of the arithmetic involved, I realize that this is not an isolated case and that there are thousands of Deborah Shank cases every year totally hundreds of millions of dollars. I realize that there may be more to this story than WSJ and MSNBC decided to report.

Even so, I am not completely suprised with the story. This is a plausible story as it is written. I believe that there may be more to the story, but I also believce that this story may be accurate and complete. The fact that this is a believable story in America in the 21st Century is sickening.

There are so many things to be disgusted with when I think about this story. The costs of attorneys (the settlement was $700,000 but the family ended up with $400,000), the costs of healthcare (it cost over $500,000 to treat Ms. Shank so far and she will require 24-hour care for the rest of her life), the actions of Wal-Mart, and the decisions of the judges are all reprehensible. My conception of what America should be is the complete opposite of what the Shanks family experienced.

I do not know anything about the law, but it seems to me that there were other options in this case left unexercised. I would think that a judge would be able to find something here that benefitted everyone. If this were a perfect world, the judge would have thrown Wal-Mart out of court and decreed that their lawyers had to take turns caring for Deborah for the next 30 days.

I do know something about business. I know something about public relations and marketing. I know about ethics, morality, and societal mores. I am absolutely positive that if Wal-Mart had simply asked their insured employees if they would be willing to pay $1 more for one year to cover Deborah's costs, they would have unanimously said yes. Assuming that Wal-Mart has over 600,000 employees insured, that would have covered Deborah's health-care costs for life.

Alternatively, Wal-mart could have taken up a collection among its total workforce. Yahoo says that there are 1.9 million Wal-Mart associates in the U.S. which means that collecting a quarter ($0.25) from each of them would have covered the actual costs incurred. There you go, two quick and easy ways to solve the problem without anyone incurring a huge cost, especially not Wal-Mart.

If Wal-Mart were seriously interested in the tenets of CSR, they would have gladly eaten that cost. When you have 1.9 million employees, I guess you assume the attitude that you can spare a few. A business run by humans would have eaten the cost, sent flowers to the family, and used the incident to assure their employees that the company is grateful for their hard work and will stand by them in their time of need. Would anyone mind if they did that and then marketed it to you as a company that cares? I would be happy to watch that commercial, and it may cause me to think about returning to Wal-Mart soon.

Shame on you, Wal-Mart. You missed an opportunity here to pass on some good karma, help a family in need, build trust and respect with your current employees, and convince the world that there is a heart somewhere amidst all the ratios and spreadsheets.

I salute profitability, low-prices, high-efficiency, and leveraged technology. Even so, at the end of the day we are human. We have a heart, a soul, and we are symbiotically connected to the people around us. We need each other. We should reach out to people in need when given the chance, and we should expect that someone will reach us when we are in need. What is the point of high profits if you have to live in a world without compassion and empathy?