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Chick-fil-A and Walmart are among the largest companies in their respective fields — fast food restaurants and retail. Both have been involved in significant controversies regarding their operation. In Chick-fil-A’s case, such a controversy happened around 2012, following the company CEO Dan Cathy’s statements about same-sex marriage and donations to charities opposing lesbian, gay, bisexual and transsexual (LGBT) groups. Walmart has been criticized for poor working conditions and low wages. Both of these situations, though exemplified by specific organizations, are sufficiently general and applicable in most businesses.
Chick-fil-A
Chick-fil-A’s issue is the public relations impact made by the CEO’s statements. The company, according to his statement, “operat[es] … according to Biblical principles” (Atlanta Business Chronicle, 2012.). As a consequence of these principles, he donated to various charitable organizations that espouse similar ideals, which often oppose LGBT interests. Furthermore, he made a personal statement about his belief in traditional marriage, prompting a resonant response, which culminated in boycotts of Chick-fil-A restaurants.
This matter represents a complicated public relations (PR) challenge, as same-sex marriage was a polarizing issue at the time. From the macroeconomic standpoint, Chick-a-Fil-A might need to reevaluate its strategy given the current political environment. As McCarthy (2019) reports, the support for gay marriage in the US is stable: as many as 63% of citizens show acceptance for marriage equality. Given that this many people back up the new policy, Chick-a-Fil-a puts itself at risk of ruining its reputation on the grounds of ethical issues.
From the microeconomic standpoint, Chick-a-Fil-a might be losing customers who belong to the LGBT community. One way to estimate the impact is to calculate the approximate percentage of affected population (LGBT people) in states with the most restaurants. For instance, according to the 2010 census, the state of Georgia’s population was 9,687,653, of which 21,318 couples, or 0.44% were in same-sex relationships (U. S. Census Bureau, 2010; Gates & Cooke, 2012). This is a rough estimate that only accounts basic statistics (e. g. not all LGBT people are in same-sex relationships, non-LGBT customers can be negatively effected by the controversy) and one state. However, it provides a starting point for further research into the subject and a thesis that no changes are necessary.
Walmart
Walmart is a major retail chain that is often criticized for poor working conditions and low wages. This is harmful to the organization because it reduces employee loyalty and engagement, but “engaged workers are more productive [and] provide better service” (Ton, 2017, para. 2). From the macroeconomic standpoint, Walmart is putting itself at risk of losing employees during the time when work mobility is normalized and encouraged. According to the US Bureau of Labor Statistics (2018), an average workers changes from ten to 15 jobs during their lifetime. If previously, individuals tended to choose a job for a long term, today, it is not uncommon to switch rapidly if a person’s expectations are not met. In this case, Walmart might want to reconsider how it treats its employees and work on a feasible retainment strategy.
From the microeconomic standpoint, by neglecting its employees, Walmart might ruin its reputation among customers. Accenture (2018) reports that customers have found their voice and they do not hesitate to express their disagreement. According to the statistics collected by the bureau, 55% of customers are ready to complain if they are not happy with a company’s words or actions. 37% will refuse to use products or services on the ethical grounds. It is readily imaginable how Walmart may repel consumers if it does not rectify its image.
Conclusion
The controversies the two companies faced, and continue to face, fall within two different areas: PR, and internal structure and management. In the case of Chick-fil-A, a controversial personal stance is affecting the firm’s public standing, and the percentage of population affected by this needs to be assessed to determine the necessity of changing it. For Walmart’s wage and working conditions problem, a direct solution is impossible. However, internal research can guide strategic changes that will allow to increase employees’ efficiency and, therefore, either increase the profit margin, or make some workers redundant, allowing to improve the wages and conditions.
References
Accenture. (2018). From me to we: The rise of the purpose-led brand. Web.
Chick-fil-A defends its values. (2011) Atlanta Business Chronicle. Web.
Gates, G. J., & Cooke, A. M. Georgia Census Snapshot: 2010. Web.
McCarthy, J. (2019). U.S. support for gay marriage stable, at 63%. Web.
Ton, Z. (2017). The case for good jobs. Harvard Business Review. Web.
U.S. Bureau of Statistics. (2018). Employee tenure summary. Web.
U. S. Census Bureau. 2010 Census of Population and Housing. Web.
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