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Wal-Mart’s Split Personality: Evil Genius or Benevolent Benefactor?

Greg is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.

Wal-Mart (NYSE: WMT) has been a mainstay of American culture since 1962, when Sam Walton first envisioned “a better life for all.” Since then, the company has often found itself in the middle of a culture war, with one side decrying its ruthless business practices and poor treatment of workers, and the other side defending the company’s ability to employ millions of people while offering low-priced consumer goods. It’s a Jekyll and Hyde scenario that leaves many wondering which side of Wal-Mart’s split personality accurately reflects the soul of the company.

Wal-Mart: Corporate Evil Genius

Wal-Mart has been demonized by numerous populist-minded groups, from PBS’ Store Wars to leftist advocacy group Demos. Reports issued by such groups paint a grim picture of America’s largest retail store, accusing it of sending jobs overseas, keeping employees in poverty, and destroying small-town America. Frightening phrases such as “sweat shops,” “below the poverty line,” “anti-union,” and “child labor” make frequent appearances in Wal-mart exposé articles, causing at least some conscientious Americans to consider boycotting the retail giant. But that’s not all there is to Wal-Mart.

Wal-Mart: Benevolent Benefactor

The other side of the coin is that Wal-Mart is the second-largest employer in America, coming in just behind the federal government in terms of the number of people who clock in for work each week. Cashiers and associates receive entry-level wages, but that’s no different than most retail positions. And Wal-Mart offers its employees the ability to buy stock at a discount, matching up to 15% of the first $1800 in stock purchased. Despite its no-union stance, Wal-Mart executives encourage employees to come speak with management under its open-door policy. And the company has also issued a strong anti-sweat shop statement, assuring stockholders that it takes great pains to do business with legal and ethical manufacturers.

How Does Wal-Mart Stack Up Against Competitors?

Target (NYSE: TGT), one of Wal-Mart’s closest competitors, offers surprisingly similar wages and benefits to its employees. Greeters, cashiers, stock personnel, and customer service associates make almost identical hourly wages at the two stores. Managers and pharmacists at Target make slightly higher annual salaries than their Wal-Mart counterparts, but Wal-Mart makes up for it by offering double in employee bonuses. According to labor advocacy groups, Target scores just about the same in terms of working conditions, overseas manufacturing jobs, and health care benefits. For whatever reason, however, Target has been able to maintain its image as a model corporation, while Wal-Mart has been cast as the evil corporate giant willing to rampage over the rights of its workers in order to make a buck.

Which is the Real Wal-Mart?

In an economic climate where every job counts and more disposable income is going toward necessities like food and clothing, questions about Wal-Mart’s business practices sometimes take a back seat. The fact remains that the retailer employs a huge slice of the population, including more minorities than any other company, and that they offer consumer goods at unbeatable prices. America’s shoppers are voting with their wallets, and the answer is overwhelmingly in favor of the rock-bottom prices and numerous jobs Wal-Mart brings to the table.

In the fast food industry, Mcdonald’s (NYSE: MCD) has faced a similar Jekyll and Hyde representation. Following the negative press garnered by books such as Eric Schlosser’s Fast Food Nation and the corresponding movie Supersize Me, McDonald’s faced severe criticism for its unhealthy menu options and aggressive marketing to children. The company responded by incorporating healthier options into their menu, including fruit in Happy Meals, and scaling back their marketing approach when it comes to targeting youngsters.

If Walmart hopes to retain a positive corporate image, they’ll need to take some similar steps to appease the public conscience. And in fact, they’ve already taken the first positive step by instituting new sustainability policies that include reducing emissions, conserving energy, and reducing landfill waste.

The bottom line is that Wal-Mart isn’t going anywhere. Despite complaints about long lines, dirty floors, low pay, and overseas jobs, people are still shopping—and working—by the thousands at America’s largest retailer. Investors can rest assured that Wal-Mart will continue to make good business decisions based on what their customers want. Their green energy policies communicate a positive message that Wal-Mart is listening to its critics and will adapt to our society’s changing social conscience. Should we be satisfied with Wal-Mart’s current business practices? Maybe not, but the company holds significant promise for the future as it continues to employ thousands of workers while offering the very best prices on the planet.

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