Wal-Mart aims for change with multibillion-dollar initiative to help women

Will it work?

Wal-Mart appears to be hoping that a new multibillion-dollar initiative will not only help women, but will also aid in changing its image.

Three months ago, Wal-Mart achieved a major legal victory – but incurred public-relations problems – when the US Supreme Court threw out an employee class-action lawsuit against it. Some 1.5 million women were suing for pay and promotion. It was the largest gender-discrimination class-action lawsuit in history.

“The Supreme Court decision in the Wal-Mart sex-discrimination class action has received an incredible amount of media attention, much of it negative and critical of the court’s decision in favor of Wal-Mart,” says Kevin Johnson, dean of the University of California, Davis School of Law. Mr. Johnson made his comments in an e-mail.

Now, on Wednesday, the world’s largest retailer announced it will spend $20 billion over the next five years on goods and services from US businesses owned by women. It also said it would double what it pays women-run suppliers overseas. In addition, the Bentonville, Ark.-based retailer said it will offer training to 60,000 factory women who supply its stores. And it will teach life skills – including punctuality and financial literacy – to 400,000 women worldwide (200,000 in the United States).

The initiative isn’t merely public relations or window dressing, say a number of marketing experts and academics.

“This is not just manipulative marketing.... If it was just that, they would have lots of less-expensive options that would produce more short-term results,” says Ginamarie Scott Ligon, an assistant psychology professor and assistant director of graduate programs in Human Resource Development at Villanova University. “Companies who use community outreach like this are adopting a much more expensive and long-term approach.”

Wal-Mart says it developed its plan over the past year with input from government and nongovernment groups including CARE USA, a humanitarian group that fights poverty.

Some say that Wal-Mart’s initiative is likely to influence other large corporations to do socially conscious things as well.

“Just because this will expand their customer base and they have long needed to improve their image doesn’t make it anything less than visionary and great leadership,” says Richard Levick, president and CEO of Levick Strategic Communications, a global marketing firm based in Washington. “It will encourage other companies to follow.”

Mr. Levick notes that he himself is on contract with Wal-Mart’s competitors, but nonetheless, he says he admires what the retailer has done globally to improve the quality of life – from encouraging far lower generic drug prices to standardizing energy-efficient light bulbs to influencing microfinancing.

“They are so big that they are often a target ... but they are doing all the right things and should be applauded for taking these kinds of socially responsible initiatives,” he says.

Indeed, Wal-Mart has often been a target, long before the class-action lawsuit. Many a community campaign has tried to keep the retailer away because of concerns it will undercut local businesses and cause traffic and pollution problems. There have been numerous complaints that Wal-Mart squeezes costs so much that entire industries are negatively affected, notes Michael Smith, an associate professor of communications at La Salle University in Philadelphia.

Still, Wal-Mart officials say that the new initiative is not in response to the lawsuit or other criticisms.

"For us, this is about stepping up in an area we know we can make a difference in," said Sarah Thorn, senior director for international trade at Wal-Mart, according to the San Francisco Chronicle.

In recent years, Wal-Mart has worked on other socially conscious initiatives. In May 2010, for example, it announced a $2 billion effort to help fight hunger in America.

Whether the new initiative truly helps women, says Professor Smith, will probably turn on how specific projects are identified and how much local input is gathered as the projects are developed.

“Because of its size and prior reputation, Wal-Mart probably won’t be able to satisfy everyone critical of the company and its practices," he writes in an e-mail. "However, this initiative seems to fulfill the dual purposes of community investment, helping both the company and community to prosper.”

In many of the regions where the program will be developed, particularly in agricultural areas, women form the backbone of the economy, Smith says.

He writes, “By improving the lot and capability of women, the company is improving the community as a whole.”