Operating expenses will be a key strategic issue for Wal-Mart in order to maintain its position in the market. The challenge is how to run more stores with less operating expenses. According to Bill Fields,". . . the goal is to increase sales per square foot and drive operating costs down yet another notch"3. Trends indicate that operating expenses have been growing at a rate of 27.7% inrecent years. However, Wal-Mart should reap the benefits of its investments in high technology, and be able to operate more stores without increasing its expenses
But not the technology is the reason that they didn’t increase theirs operating expenses, the other motive is that the workers are paid poverty level wages even when they work full-time. They intend to get their key strategic, but with ahigh cost in the Associate’s families. In 2001, the most common job in Wal-Mart, earned on average $8.23 an hour for annual wages of $13,861 (Poverty line for a family of three was $14,630)1. That wasn’t enough to keep the families expenses and they need to work in others jobs to get their life. But if this wasn’t sufficient, in 2003 wage analysis reported that cashiers, the second most commonjob, earn approximately $7.92 per hour and work 29 hours a week. This brings in annual wages of only $11,948 1. It is crazy; if in 2001 the wage didn’t get to their expenses, in 2003 was less. I believed that Wal-Mart forgot the inflation, and believe that the wage went down.
But the equality in circumstance in Wal-Mart isn’t their best subject; that because in 2003, Lee Scott (Wal-Mart CEO)earned 1,450 times what a full-time hourly employee of Wal-Mart earned1, and we believe that he received an increase in his salary in that year. In resistance, Wal-Mart argues that it complements its wages with other benefits such as career benefits, financial benefits and personal benefits.
“Career benefits”6 are designed to give each associate every opportunity to grow, prosper, and advance inhis or her career. Regardless of gender, color, religion, age, national origin, or sexual orientation, an associate with the desire and the ability to get the job done will find many career paths and opportunities to explore. Wal-Mart provides classroom training, computer-based training, in-store and on-the-job training, mentoring, and a host of other opportunities to give associates the knowledgeand skills for a successful career. This action is part of their philosophy of promoting from within.
About “Financial benefits”6 Wal-Mart offers several ways to save and invest for their financial security. Their Profit-Sharing and 401(k) Plan help associates save for long-term financial needs, such as retirement. Another financial benefit is the Associate Stock -Purchase Plan, which allowsassociates to buy stock through payroll deductions.
And finally, there are the “Personal benefits”6. These benefits include such extras as discounts on child care, education, and travel. It also includes medical and personal leaves of absence, long-term service benefits, and even a professional and personal associate counseling service.
But these are the terms of Wal-Mart. The certaintyis that another form to obtain low costs is with low benefits: workers are paid a living wage with proper health and retirement benefits. Wal-Mart reports that its health insurance only covers 48% of their associates, that’s mean that they have almost 800 thousand employees without health benefit. When these people get sick, they need to go to governmental hospitals, and the cost is paid by the...