1) Is Wal-Mart’s rapid rise to retail dominance a positive or negative economic development?
A) Karl Marx
Karl Marx’s theory is based on the surplus value (Karl Marx 's theories? .2008). According to Karl Marx capitalists are able to exploit workers(doing involuntarily labour as a mere means to an end and not as an end in itself) because they only have labour to offer and this could be their only source of income, thus resulting in workers getting paid less than value created by their labour. Through these exploitations capitalists are able to increase their profits. This will cause workers to become rebellious and in result refusal of being further exploited (Shaw.2011.149) Workers will then create a system that will fully benefit…show more content…
Smith believed that when employers compete for employees the price of production will increase because each employer will offer the employee a better and higher wage. When employees compete for job opportunities wage rates decline because job opportunities are limited and the amount of labour supplied exceeds the limited amount (An Inquiry into the Nature and Causes of the Wealth of Nations .1776). Wal-Mart has no other employer to compete with and therefor can maintain the low wage it offers employees. On the other hand employees compete for the limited amount of job opportunities and will accept any wage the employer offers.
2) Wal-Mart taking over Massmart
Wal-Mart, the corporate superior in the retail market, has recently claimed the title of ‘the world’s largest company’s (Shaw, 2011; 162), and also took control of the SA company, Massmart holdings, in 2011. Wal-Mart gained control of Massmart Holdings through the acquisition of 51% of its controlling stake and in result gave Wal-Mart the ability to use its authority to influence the amount of the subsidiary’s returns. Wal-Mart is thus the holding company of the group under which Massmart falls as a partially owned subsidiary.
Massmart was listed on the JSE in 2002 at R12.50 per share and at the takeover during 2011 Wal-Mart acquired shares at R148 per share (ibid).
Wal-Mart also gained the ability and power to appoint the chairperson and three of the non-executive directors to