[lbo-talk] Re: WMT goes orgo

[ravi]

At around 29/8/06 2:08 pm, ravi wrote:
> At around 29/8/06 2:38 pm, Miles Jackson wrote:
>> Willy Greenfields wrote:
>>
>>> I don't see this teleology, honestly. The drive to increase
>>> earnings doesn't necessarily require a Walmart-style assault on
>>> labor. Costco, which competes against WMT and its SAM's Club,
>>> follows a much different operating model. For the nature of the
>>> work completed by most of its employees, it pays what passes for a
>>> decent wage in this country (this is skewed a bit by the
>>> warehouse-type environment - more forklift and sideloader
>>> operators, for instance - but the basic point holds). Compare
>>> market performance of Walmart and Costco shares. Costco's not
>>> really being penalized for its 'generosity,' at least on a relative
>>>  basis.
>> Walmart income for 2005: $11.2 billion Costco income for 2005: $1.1
>> billion
>>
>> It seems obvious to me what type of management is facilitated by and 
>> handsomely rewarded in a capitalist economy.
>>
> 
> This is not a fair comparison, is it?
>

I notice that Miles is talking about what type of management is rewarded
(and not about which company does better), and perhaps with regards to
that my response/data is not relevant, or might even make his case i.e.,
Wall Street, which directly or indirectly rewards management, does not
(as BW notes) use such genuine measures as those that put Costco ahead,
but only those measures that it (WS) can easily measure, such as
employee costs or annual income. As the BW article notes, Wall Street's
response to Costco's upbeat results was to push the shares down, because
Costco's style is just not favoured (or, in their defense, thought to be
sustainable by WS).

	--ravi

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