Dispatch from a Parallel Universe
If you seek a five forces analysis of Wal-Mart, please try this page.
With the start of a new semester, the Danish boycott, and now the Dubai Ports World row, I had all but forgotten about one of my favorite blogging topics- the war against Wal-Mart. By far the most interesting development in the last few weeks is that Wal-Mart critics are receiving assistance from a new source, and an interplanetary one at that.
I discovered this quite by accident after having read a recent NY Times article by Steven Greenhouse and Michael Barbaro about Wal-Mart CEO Lee Smith's website, Lee's Garage. A careful reading of the article reveals it comes neither from New York nor anywhere else on Earth. Rather, it has come to us from a planet somewhat like Earth, but in a parallel universe. I don't know the name of the galaxy or the specific name of the planet. For the purposes of this discussion I'll call the planet "Marxon".
As a professor of strategic management and organizational behavior, I find the reportage from Marxon quite fascinating. What keen Marxonian observers say about business on Earth can provide us with many valuable clues about how business is conducted in a parallel universe. Gleaning insights into the vastly superior and advanced Marxonian business-model may provide lessons on how to improve business practices on Earth. Let's have a look-see shall we?
The article begins, interestingly enough, with a statement that makes clear that not everything on Marxon is different from Earth. Apparently reporters have confidential sources; often these are employees that have axes to grind.
In a confidential, internal Web site for Wal-Mart's managers, the company's chief executive, H. Lee Scott Jr., seemed to have a rare, unscripted moment when one manager asked him why "the largest company on the planet cannot offer some type of medical retirement benefits?" Scott first argues that the cost of such benefits would leave Wal-Mart at a competitive disadvantage but then, clearly annoyed, he suggests that the store manager is disloyal and should consider quitting.
[Scott's] tone is at times biting. In his response to the store manager who asked about retiree health benefits, Scott wrote: "Quite honestly, this environment isn't for everyone. There are people who would say, 'I'm sorry, but you should take the risk and take billions of dollars out of earnings and put this in retiree health benefits and let's see what happens to the company.' If you feel that way, then you as a manager should look for a company where you can do those kinds of things."
So one interesting thing we learn about management practice on Marxon is that firms can have their cake and eat it too. Apparently, Marxonian firms don't have to control costs to maintain competitive advantage over their rivals. Interesting as well is the use of the word "planet" in the manager's question. Makes you wonder if said manager was fed the question by the Marxonian reporters.
Most intriguing of all, however, is how reporters from Marxon interpret disucssions about what we Earthlings term person-organization fit, i.e. " the congruence of an individual's beliefs and values with the culture, norms, and values of an organization." According to earthling consultants and Industrial Organization psychologists like Dr. Charles Handler, "the idea of ensuring a good fit between a candidate and a job or organization is pretty much the main idea of the entire hiring process." And it applies to retention, too.
Not so on Marxonia, it would seem. There, everyone fits with the organization's values and norms- whether they like it or not.
Copies of Scott's postings covering two years were made available to The New York Times by Wal-Mart Watch, a group backed by unions and foundations that is pressing Wal-Mart to improve its wages and benefits. Wal-Mart Watch said it received the postings from a disgruntled manager. While the existence of the Web site and Scott's participation in it have been known, transcripts have never been made public before.
From this I infer that on Marxon a labor union backs interest groups with the sole aim of increasing benefits and wages of all workers. They do not, it would seem, back these groups as a means of advancing the union's goal of unionizing the workers. And why should they? The workers of Marxonia have already united (and have nothing to lose but their chainstores).
In his postings, Scott tries to strike a chummy, "in the trenches" tone, reminding managers how frequently he visits stores--at least once a week--and pops into meetings unannounced "to make sure there's not a filter keeping me from hearing what's really important."
There are two possibilites here. Perhaps CEOs in Marxonia find it beneath themselves to visit the places where front-line managers work. Or maybe, they do visit, but never unannounced, thereby giving their underlings time to make the necessary preparations, e.g. rolling out red carpets and lining the streets along the esteemed leader's route with adulatory crowds.
But his responses often serve to remind managers of the gap between them and their chief executive, who earned more than $17 million last year, including stock options, who hops around the globe on Wal-Mart's fleet of jets and who lives in a gated community called Pinnacle.
I can only guess that the life of a CEO on Marxonia is pretty spartan in comparison to an Earth CEO. It must be the case that their are no incentives for some employees to work harder or smarter than others because all employees in all professions earn the same amount of money. Also, if and when top managers are allowed to leave the workers' paradise they fly coach. When they return home it is to a modest flat in an ungated community, one so similar to others that it is not uncommon for people to walk the wrong building and not know it... for days. And of course what need has the CEO or anyone else for a gate? When everyone owns everything no one can really be said to "steal" from anyone else- unless of course they are a bourgeoise capitalist!
Scott, 56, joined Wal-Mart in 1979 as its assistant trucking manager. Helped by his affable manner and his command of the company's vast distribution system, he was named chief executive in 2000.
On Marxon, faithfulness to certains ideals and ruthless efficiency in carrying them out are the keys to climbing the organizational hierarchy. Scott, with all of his management expertise and people skills might actually set a bad example for others on Marxon. A very bad example indeed.
"At Wal-Mart, we communicate very candidly with one another," [Mona Williams, a Wal-Mart spokeswoman] said. She added that Scott's tone did not deter employees from asking questions, noting that 2,147 questions have been asked since last April. Wal-Mart's Williams said a public relations assistant screened the questions and Scott dictated responses to an aide. At first the site was accessible only to salaried managers. Last October, it became available to all 1.3 million employees in the United States.
On Earth a CEO like Scott communicates "candidly" with employees and answers an average of 35 of their questions per week. Marxonians call this "denouncing, exhorting, and mocking."
"I recently had dinner with the prime minister of the U.K., Tony Blair, and his wife; my wife and I had a meeting with Prince Charles to talk about sustainability; and I met with Steve Case, the founder of AOL, and talked about health care," Scott wrote in a two-week-old entry describing how he represents Wal-Mart around the world.
The Marxonians are very suspicious of this kind of behavior and talk. The frequency with which Scott uses the first-person singluar makes them believe he's representing himself at the expense of the workers and the company. On Marxon the CEOs can only travel overseas or to other planets with government minders in tow, minders whose primary jobs are to control supply and demand and to allocate scarce resources according to lofty ideals with names like "social justice." And it works, too.
The longer the Marxonian minders are at work, the more evenly the society's goods are distributed. In fact, their job gets easier and easier because perpetual shortages of low quality, over-priced goods means there's very little that needs distributing. Everyone gets an equal share of nothing.
That state of perpetual deprivation and resource scarcity creates a curious mindset among Marxonians: their lack of just about everything makes them feel extremely virtuous, even spiritual. Paying more for low-quality goods keeps them from becoming materialistic like those grubby swine, the earthlings, who have an abundance of basic goods at reasonable prices. And this is another reason to dislike a CEO like Scott who started out as a truck driver and who understands his company's distribution system: he expects trucks to be used to distribute things, things the company produced and things that people actually want to buy with money they earned.
On Marxon, only one thing is worse than someone who believes that shortages are bad rather than character-building. That one thing is to have an abundance of goods and to be able to distribute them all over the planet, even to people that don't necessarily share your belief system. People like this have to be stopped lest their ideals achieve inter-galatic dominance.
Now is it just me, or does Marxon sound like it was the guiding star of a certain 19th century political economist whose ideas helped about a billion people experience poverty and serfdom like they'd never known?
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