An interesting take on the profit motive of business by Alan Murray at WSJ [BUSINESS: The Profit Motive Has a Limit: Tragedy By Alan Murray 7 September 2005 The Wall Street Journal A2]. Alan Murray covered the GE Ecomagination launch in May with heaps of skepticism (see post May 9), and follows the same vein in trying to find the thin line between when Wal-Mart must make money and put down the bar code scanners and help their employees and customer base - in Murray's view a Dickensian trade-off. I agree it is adiificult position, but I suggest it is made more difficult were one comes from the view that social, environmental or governance factors never had a place in making business work well in the first place.
"GOOD CORPORATIONS aren't made to be good charities. They are, after all, stewards of other people's money, and their mandate is to make a profit. The best of them focus on that mandate with ruthless efficiency". Murray highlights the personal epiphany of WMT's Chief Executive Lee Scott and his wife last Wednesday.
Murray describes Mr. Scott's balancing act.
"We can't send three trailer loads of merchandise to every group that asks for it," he says. He tells of being in Houston on Monday, and talking to someone who wanted Wal-Mart to donate 2,000 blankets to help refugees. Mr. Scott turned down the request. "We have to, at the end of this, have a viable business," he explains."
My two takeaways from this article are:
1. Alan Murray's stretch to understand business as anything outside of profit.
2. The bump back to WMT's philanthropy and community credentials by reading the story from inside the CE's head.
WMT received the best possible endorsement Sunday morning on Tim Russert's Meet The Press She drowned Friday night’ Sept. 4: Aaron Broussard, president of Jefferson Parish, La., breaks down while telling NBC's Tim Russert the story of the death of the mother of one of the parish’s employees. The distraught New Orleans community leader gave heartbreaking personal testimony of a colleague who promised his invalid mother help day by day, but eventually she drowned. The Feds never arrived.
Broussard's ringing endorsement was along the lines that WMT was ready to help, trucks were turned away, and why could the Fed. response not be like WMT?
Watching the impressive media coverage from WMT since the disaster, including the full-page advert supporting the American Red Cross and Salvation Army in Wednesday's WSJ, I wait with great interest to see how public opinion toward WMT improves, and how SRI ratings agenices may change their ratings.
A final WMT note: late into the night watching some stunning tennis at the US Open between legend Agassi and new-comer Blake through 1:15 a.m. I stumbled on the South Park episode where the brats (I do not know my way around the characters like I do Seinfeld) tried to destroy "Wall-Mart" but find the "heart" which is a "mirror". With sardonic humor, they make the point. WMT does represent the conflicted, schizophrenic US consumer.
WMT has been flat. In investment terms, much of their customer base is being flattened by the steep energy prices. Stores have been lost and disrupted. While their investment rating on financials may be flat-lining, perhaps the Katrina disaster may jolt them awake in SRI terms. Then again, maybe 2, 000 blankets is too many for WMT.
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