EVIL
Wal-mart does undercut rivals when it moves into an area- as far as I can remember from a case study I read done by HBS. How long they do it I am not sure, but their pricing is significantly lower then their competition to start with just because of their strong hold on their suppliers. Anyone buying a $100Million worth of oranges from a single source can easily force that supplier to undercut what they are charging others by 10% or more easily. Add to that their superb supply chain and huge turnover of inventory and you can see how they make profit even when they have such low prices.
As for the HR/Employee issues; its always a supply and demand thing. There are plenty of people who would work for such meager amounts that they dont need to pay them any more especially at the unskilled labor level. Sam Walton himself used to share his hotel rooms and fly economy whenever he visited different branches and the same furgal behaviour occurs here. As for the management making more money, its the same in any company - the further up you go the corporate ladder the faster and higher the pay raises. A 10% bonus to someone making 20K = $2K but a 10% on a $100K salary is $10K. Besides skilled labor is harder to find and train.
Faisal: globalization is all good but the simple problem thats causing all these headaches of disappearing jobs in one area/cost of living parity is because countrys are fighting to keep their powers to themselves and there is significant mismatching of the economic systems and political systems circle of influence. In the past a US company operated in the US and both of these circles were the same hence the jobs stayed here, but not one is on a completely different wavelength then the other hence the issues that have arisen. The only real way that I see for countrys to over come this is to make the political systems at the same level as the economic systems (that is esentially destroy the nation state and allow freedom of work and ability to move). This can be done through the UN and at that level the economic might of the corporations can be balanced by the political might of the political systems.
If the above doesnt make sense, dont worry it doesnt either to me :), but basically what I am trying to say is as long as the economic circle of influence of a coporation exceeds its balancing part (the political circle of influence) the coporations will win.
Shukar Allah ka… I thought I am the only one jiss ke pallay kuch nahi parHa… Anyway whatever you are “basically” trying to say… woh bhi saroN lanGG giya. Per khair hai.. don’t worry. I know you were saying something right :k: And even if it wasn’t right.. it sounded quite fascinating, anyway.
Yeah I know Faisal. it was written under duress aka gupshup break during studying.
Ok let me try again. For each institution (political, economic, religious) there is a certain circle of influence. Now normally there is a counter balancing force to prevent excessiveness like the seperation between state and church here, etc. In the past the economic excesses were somewhat controlled by the polictical counter influence in that people voted people to government and hence didnt want them to cheated out of things. In that sense now we have economic powers that are global but political powers that are geographically limited (ie countrys). For an effective political system to counter the effects to the economic power we need global political systems such as the WTO, the UN etc, who have the power and will act in a similar manner to what their countries governments did before. Otherwise how can you affect the economic entities to make them change. Its like telling a kid you cant stay up for the horror show but telling them that on the phone from a few thousand miles away. It has little effect especially if the childs a 21 yr old independent minded person.
Also the secondary effect of dissolving such political systems would hopefully be the free movement and ability of people to work anywhere they want and other global standard setting. This will make the labor parity as well standard of living not such a big issue. however all this sounds like a utopia, but then I am sure a few hundred years ago so did man flying and the internet.
hmcq, trust me, you don’t want to hear what I have to say. 
I always wanna hear what others say. If I do all the saying, I may be totally wrong, look like a fool yet go on believing I am perfectly right cause no one else responded otherwise.
So please feel free to say what you wish.