Always Mo? Crises (Editorial)

Last week’s best newsroom one-liner: Sources in Bentonville say the world’s largest retailer is changing its corporate motto from “Always Low Prices” to “Always Mo’ Crises.”

It does seem that Wal-Mart Stores Inc.’s well-publicized effort to improve its battered corporate image has backfired. Take, for instance, that lovefest the company put on for the print media. Only about half of the print journalists who were invited accepted, and those who came produced only a few polite stories — nothing that resonated like the bombshell dropped by The Wall Street Journal the day after the conference ended.

According to its mysteriously sourced account, ousted Vice Chairman Tom Coughlin either supplemented his multimillion-dollar compensation package with chump change for boots and dog pens or he was being reimbursed indirectly for blatantly illegal anti-union activities. Some choice.

Wal-Mart insists that there is no evidence that Coughlin was doing anything but misusing expense accounts and gift cards. Some observers find the paper flow hard to believe (see, for instance, the guest commentary here). Others find it even harder to believe that a top executive would feel the need to steal from the company that made him fabulously wealthy. Either way, the revelation that the company then fired the 31-year-old vice president who blew the whistle on Coughlin is not helping with the corporate facelift.

(Even the announcement that Wal-Mart would donate $35 million over 10 years to land conservation got buried under news that the United Food and Commercial Workers union was filing a complaint about Coughlin’s alleged slush fund.)

Meanwhile, Arkansas Business and Northwest Arkansas Business Journal, assisted by freedom of information laws, broke the news that a fraud investigation in Texas somehow involves a couple of Wal-Mart executives who were fired in December for unspecified violations of company rules.

Wal-Mart spent two years at the top of Fortune magazine’s list of most admired companies before falling to No. 4 earlier this year. Fourth place is nothing to sneeze at, of course, but that slippage seems more significant when one considers that it is business executives, directors and analysts who determine that particular ranking — not class-action lawyers or rank-and-file employees. Something about the vaunted Wal-Mart culture — focused laser-like on maintaining profitability while driving down the price of every one of the tens of thousands of items it sells — is starting to show signs of wear.

Discipline in the managerial ranks is clearly not what it was when Sam Walton was running the show. Take, for instance, the supervisor who pleaded guilty in November to taking kickbacks from a company contracted to clean the floors at Wal-Mart stores. His attorney explained to the court that poor Clifford Pruitt Jr. had buckled under “overwhelming pressure to buy new, expensive cars and homes, keeping up with the other Wal-Mart executives.” If that is indeed part of the Wal-Mart culture these days, it has most assuredly developed after Mr. Sam’s death 13 years ago this month.

Wal-Mart is the planet’s biggest company, and that means it is a big target. But unlike class-action suits or protectionist zoning proposals, these re-cent crises seem to be coming entirely from within. We predict there will be some housecleaning before Wal-Mart again invites a few dozen business writers to dinner.