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Founded in 1962 by Sam Walton, a shrewd businessman from Arkansas, Wal-Mart started on a righteous path. Their original ideals involved giving employees a piece of the company (Belsie para 1). This piece was represented by shares of stock. The whole idea of giving employees stock, revolutionary at the time, was meant to motivate employees to want to see their company do well. The payoff for the employees was simple and gratifying. When the company did well, so did they.
Although Wal-Mart's business ideals were prosperous for everyone during this time, their practices soon began to change. The company realized that customers were no longer interested in kind gestures. They wanted more for less. Because of this harsh demand,
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Melissa Berryhill, a Wal-Mart spokes-woman, states,"The fact is Wal-Mart, perhaps like no other retailer, seeks to establish collaborative and mutually beneficial relationships with our suppliers"(Fishman para 22). Mike Leonard, Vice President and Director of Strategic Programs for the United Food and Commercial Workers International Union states that, "Allowing companies like Wal-Mart to sell products made under forced labor conditions overseas is an insult to American workers. Recently, the company, Master-lock, with it's largest plant located in Milwaukee, Wisconsin, moved its operations to Mexico in order to cut costs. " Instead of debating the way in which the shopper decides to vote with their dollars, I simply smile and send them on their way, as I know the truth of the business. After reviewing such files, Wal-Mart will often insist that the suppliers' margins are too high and need to be reduced for a cheaper product to Wal-Mart and, in turn, their customers (Fishman pars. They could, as Wal-Mart does, hire a great number of part-time employees that are not offered benefits and earn low wages. Since the suppliers realize that Wal-Mart's business is essential, as Wal-Mart sells more than any other retailer in the world, suppliers will often concede and follow through with whatever changes Wal-Mart wishes to make to their business. 3 million, every dollar that is squeezed out of employee's salaries hugely affects Wal-Marts profitability (Hill para 3). Even though it may seem like a positive idea for suppliers to cut costs in order to furnish Wal-Mart and it's customers with a cheaper product, the effects have been shown to be devastating.
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