Tuesday :: Dec 7, 2004

The Wal-Mart Tumor Is About To Metastasize

by pessimist

Just like a cancer growing wild, Wal-Mart has done much to strangle both the American Consumer and the American Worker many consumers are. Companies such as Wal-Mart are the result of a vision of the executive who run them, and their vision is often just as limited in scope as that of the Bu$h (mis)Administration they support and promote. Wal-Mart, for example, - a company that alone is responsible for 13% of the foreign trade imbalance - gives better than 90% of its political contributions to Republicans.

The man attributed with creating the current management structure at Wal-Mart is retiring - and he's promoting his successors as 'ready' to take over his duties:

Vice chairman quits Wal-Mart

Thomas Coughlin, who joined Wal-Mart Stores as head of security and rose to vice chairman, will give up the post early next year after 25 years of service that helped the company become the world's biggest retailer.

Coughlin says that with the management team he helped nourish ready to handle his duties, it was the best time to go. "We've got the people in place who are ready to step up and perform at the highest level," Coughlin says. "Speaking personally and for the business, it is simply the right time for me to move on."

Right as Wal-Mart announces less-than-expected earnings!

As vice chairman, Coughlin oversaw the discount store unit, the Sam's Club warehouse stores and Walmart.com. He also oversaw logistics, real estate, store planning and global procurement, and the compliance and diversity offices.

Those duties could have positioned Coughlin also to become the corporation's chief executive one day. His start in a specialized area such as loss prevention wasn't unlike that of current CEO Lee Scott, 55, who started in the transportation division, or former CEO David Glass, who started on the financial end of Wal-Mart. Glass was preceded by founder Sam Walton.

Industry watchers agree that Coughlin's departure makes way for the talent that he has nurtured over a quarter century to flourish. "They're a very deep company and have been able to go through major transitions without a hitch," says Neil Stern, senior partner at McMillan/Doolittle Retail Consultants.

Coughlin's duties will be dispersed to executives who report directly to Scott:

Mike Duke, CEO of the Wal-Mart Stores in the USA, will take on logistics and the Wal-Mart Stores finance and compliance offices.

Scott will directly oversee the Sam's Club unit in the USA and CEO Kevin Turner, 39.

The global procurement unit, which coordinates Wal-Mart's buying, will report to John Menzer, 53, president and CEO of Wal-Mart's international business.

The real estate and store planning division will report to Tom Hyde, 55, executive vice president of legal and corporate affairs.

Walmart.com division will be overseen by Tom Schoewe, 52, chief financial officer for Wal-Mart Stores. Schoewe reports to Scott.

Wal-Mart's diversity office will report to Lawrence Jackson, 51, recently hired as executive vice president of the people division.

Coughlin, 55, was treated a year ago for arterial blockage, but company officials did not attribute his departure to his health. They say he returned to work fully recovered and kept a hectic travel schedule.

"He had an incredible sense of urgency. He taught people that the center of the company is in stores, not at headquarters, because there are no cash registers ringing at headquarters," says Jay Allen, head of executive affairs at Wal-Mart.

And that in a nutshell defines Thomas Coughlin and the minions he's created. Some of these men will decide that there are greener pasture elsewhere (for them!), and others will continue to rise in Wal-Mart's ranks. But none of these men will leave behind what Coughlin taught them about running a retail business. As these men make their career moves, the Wal-Mart philosophy about so many things will travel with them, and as their successes happen, other executives will want to model themselves after these men in the hops of matching their achievements.

Those who visit this site claiming economic accumen will make the claim that such practices are actually good. But these views are terribly short-sighted. There is so much more to a retail establishment than the bottom-line, which isn't to deny its importance.

This is the season when we are bombarded by the various versions of Charles Dickens' Christmas Carol. Are we going to have to have our own real-life versions of the Christmas Ghosts visit us in our role as Ebeneezer 'United States' Scrooge before we figure out that cutthroat mercantilism is going to kill Tiny Tim 'Freedom and Liberty' Cratchit?

Would we even miss him in our continuing quest for the Newest Utlimate So What - Now on sale at Wal-Mart?

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pessimist :: 1:35 AM :: Comments (6) :: Digg It!