Although many have applauded his business mind and the Walton Family’s philanthropic endeavors, Wal-Mart has also been criticized for enforcing bad labor practices and driving out mom-and-pop shops and wreaking environmental havoc due to the size of the stores. But the retail giant it was to become got its start in Walton’s humble goal of making goods more affordable to rural America.
History and Growth of Wal-Mart
Walton was born in Kingfisher, Okla. on March 29, 1918. While attending the University of Missouri at Columbia, Walton delivered papers, waited tables and worked at a five-and-dime store.
In 1945 with a $25,000 loan from his father-in-law, Walton opened his first store — a Ben Franklin arts and craft store in Newport, Ark. Walton and his brother, James, owned 15 Ben Franklin franchises by the early ’60s.
Walton thought he could bring lower prices to rural towns and proposed to open bigger stores in those areas, but his suggestion was turned down by Ben Franklin executives.
Acting on his vision of providing inexpensive goods to small-town markets, Walton soon opened his first Wal-Mart in 1962 in Rogers, Ark.
By 1977, Illinois became the tenth state to have a Wal-Mart. By 1991, a year before Walton’s death, Wal-Mart first opened an international store in Mexico City.
As of July 2004, Wal-Mart had 1,409 stores in the United States, 1,562 Supercenters (a Wal-Mart and grocery store combined), 539 Sam’s Clubs (a warehouse discount store) and 1,506 international Wal-Mart stores. It was also the largest private employer in the United States.
No stranger to hard work, Walton took a hands-on approach to management.
“This is a man who was at work at 4:30 in the morning, had warmth and charm throughout the day, an interest in his customers, and who treated his associates well as persons, not just as clerks and salespeople,” said Walter Loeb, a retailing consultant, according to The New York Times.
Walton, known as an enthusiastic leader, was constantly looking for new locations for his revolutionary discount store. The tycoon would sometimes fly over small towns looking for new locations — landing and buying a slab of land when he found the perfect spot. After his company grew much larger, Walton would fly to his stores to check on them.
Part of Walton’s enthusiasm could be recognized with the cheer that he started and that is repeated at the beginning of every workday by the employees at each store —
Give me a W!
Give me an A!
Give me an L!
Give me a Squiggly!
Give me an M!
Give me an A!
Give me an R!
Give me a T!
What’s that spell?
Whose Wal-Mart is it?
Who’s number one?
The Customer! Always!
Walton had visited a tennis ball factory in Korea where the employees did calisthenics and a company cheer together, Walton liked the idea so much he encouraged his employees to do the same.
“My feeling is that just because we work so hard, we don’t have to go around with long faces all the time — while we’re doing all of this work, we like to have a good time. It’s sort of a ‘whistle while you work’ philosophy, and we not only have a heck of a good time with it, we work better because of it,” Walton said, according to the company.
What Sam Walton developed was a complete philosophy of business, one he outlined in his autobiography, “Made in America: My Story.”
One of them in particular, value your associates, was something that would revolutionize retail. Ironically in the years following Walton’s death the treatment of Wal-Mart employees was scrutinized. Accusations of forcing employees to work overtime without pay, locking them in the store and discrimination have brought law suits and media attention.
But Walton, who referred to his employees as associates to increase their stake in the company, worked to make some workers eligible for a share of the profits and stock options in the company. Associates also manage their own departments, keeping a watchful eye on stock and profits.
Because Walton strived to drive prices as low as he could, he would cut as much overhead as he could, driving prices even lower.
This practice, which brought his customers the lowest prices, however, led to complaints against the company for driving out smaller factories that couldn’t produce goods at the lower prices Wal-Mart, the United States’ largest private employer, demanded.
When Sam Walton died in 1992 he was the richest man in America, holding 38 percent in his company now worth more than $20 billion. Sam Walton’s widow, Alice, and their four children hold the sixth through tenth spot on Forbes’ list of the world’s richest, each worth an estimated $20 billion.
The family, the nation’s wealthiest, has also become the top philanthropist in the United States, especially in the area of education. They have contributed at least $701 million to education charities since 1998, according to USA Today.
But even their philanthropic efforts have become controversial. Critics argue the money the family puts toward voucher programs may push more tax money to charter schools, which are less regulated than public schools and would also take money from the public schools.
Nonetheless, John Walton, one of Sam Walton’s children, told USA Today that the family expects to donate as much as 20 percent of their $100 billion in Wal-Mart stock.