Developing Humanistic Management Practice

When Sam Walton started his first store in Arkansas in 1945, he wanted to ensure that his family would have a secure and stable income, because he had experienced what it meant growing up poor. In the early 1920s, his family had had to abandon their farm in Oklahoma due to a long drought. Later, the Great Depression of the 1930s made it hard for Walton to find stable employment. Growing up, Walton and his brothers all had to perform numerous chores to help their family make ends meet, which was common at the time. When the Second World War ended, Walton wanted to help the many families like his own buy goods at everyday low prices. The concept became so successful that he went on to build a whole chain of stores, now known as Walmart. Walmart’s success can be attributed to the many families who needed a store with a wide variety of products at affordable prices. Sam Walton died in 1992 — the richest man in the United States. Walmart clearly served a societal purpose by allowing low-income families to afford everyday products. Using market principles and, increasingly, market dominance, Walmart could ask suppliers to bring their costs down. The lower costs were then passed on to the customers. Aiming to generate a profit imposed discipline on the company, while competition made the company focus even more on providing the lowest possible prices. This is a great approach. Who could dispute the many benefits? In many ways, Walmart is a symbol of how the market can work at its best, serving customers by providing products they could not otherwise afford. How, then, did it happen that this large company, which uses the market so effectively, has become so vilified? According to a 2016 poll by Fortune magazine, both conservatives and liberals hate Walmart with a passion. Fast Company magazine dedicated several pages to the topic in its January 2003 issue, arguing that “[t]he giant retailer's low prices often come with a high cost. Wal-Mart's relentless pressure can crush the companies it does business with and force them to send jobs overseas.” Other observers contend: “Walmart has a long history of evading the law, abusing its workers, and suppressing strikes through illegal means,” or list “10 reasons Wal-Mart is the worst company in America.” A best-selling book is titled: How Walmart Is Destroying America (and The World): And What You Can Do About It. Obviously, Walmart is not alone, and many companies have faced a similar backlash. Fortune, for example, writes that the only saving grace for Walmart is that conservatives hate some Wall Street banks even more . Articles and books abound with questions about corporate conduct. Published rankings of reputation, trustworthiness, and responsible conduct have proliferated, and generally reveal that the legitimacy of companies such as Wall Street banks and Walmart is under threat. Whether justified or not, these developments reveal the limits of the economistic logic — the logic of the market above all else. Clearly, there are things people value more than low prices and high profits: dignity. The following pages provide examples of a number of organizations that have introduced more humanistic management practices by following one of two pathways. These pathways are shown in Figure 8.1. The first section, representing Pathway 1, shows organizations that have reinstated dignity in their management practices. The second section, representing Pathway 2, shows organizations that have decided to focus on well-being creation rather than just wealth creation.