Wal-Mart’s Authoritarian Culture

MONDAY’S Supreme Court decision to block a class-action sex-discrimination lawsuit against Wal-Mart was a huge setback for as many as 1.6 million current and former female employees of the world’s largest retailer. But the decision has consequences that range far beyond sex discrimination or the viability of class-action suits.

The underlying issue, which the Supreme Court has now ratified, is Wal-Mart’s authoritarian style, by which executives pressure store-level management to squeeze more and more from millions of clerks, stockers and lower-tier managers.

Indeed, the sex discrimination at Wal-Mart that drove the recent suit is the product not merely of managerial bias and prejudice, but also of a corporate culture and business model that sustains it, rooted in the company’s very beginnings.

In the 1950s and ’60s, northwest Arkansas, where Wal-Mart got its start, was poor, white and rural, in the midst of a wave of agricultural mechanization that generated a huge surplus of unskilled workers. To these men and women, the burgeoning chain of discount stores founded by Sam Walton was a godsend. The men might find dignity managing a store instead of a hardscrabble farm, while their wives and daughters could earn pin money clerking for Mr. Sam, as he was known. “The enthusiasm of Wal-Mart associates toward their jobs is one of the company’s greatest assets,” declared the firm’s 1973 annual report.

A patriarchal ethos was written into the Wal-Mart DNA. “Welcome Assistant Managers and Wives” read a banner at a 1975 meeting for executive trainees. And that corporate culture — “the single most important element in the continued, remarkable success of Wal-Mart,” asserted Don Soderquist, the company’s chief operating officer in the 1990s — was sustained not only by the hypercentralized managerial control that flowed from the Bentonville, Ark., home office but by the evangelical Protestantism that Mr. Soderquist and other executives encouraged.

Wal-Mart attorneys have argued, and the Supreme Court agreed this week, that even if sex discrimination was once part of the company’s culture, it is now ancient history: if any store managers are guilty of bias when it comes to promoting women, they are at odds with corporate policy. Wal-Mart is no longer an Ozark company; it is a cosmopolitan, multinational operation.

But that avoids the more essential point, namely that Wal-Mart views low labor costs and a high degree of workplace flexibility as a signal competitive advantage. It is a militantly anti-union company that has been forced to pay hundreds of millions of dollars to current and former employees for violations of state wage and hour laws.

Full Article
Source: New York Times