Saturday, February 25, 2006

Katrina vs. FEMA vs. Wal-Mart

Dr. Edwin Feulner, president of The Heritage Foundation, has written a column on the efficiency of one of my favorite corporate demons: Wal-Mart. The context is a short comparison of the company and FEMA (and, impliedly, state and local government emergency management teams). If you read Dr. Feulner’s article, there is a part that is a bit was the Chicago city council that refused Wal-Mart which is why it opened its new store in Evergreen Park.

His first main point:

"One key reason for Wal-Mart's success, Jackson said, is ‘associates who are dedicated to their communities.’ That local connection helped it deliver goods when government failed. As Investor's Business Daily reported in September, ‘While local and federal groups suffered communications problems and bickered over who was in charge, Wal-Mart sprang into action.’"

Of course the local connection helps; that should surprise no one. First-hand local knowledge and personal incentive will always be great tools for first responders.

His second main point:

"And while Chertoff admits Katrina caught the government flat-footed, Wal-Mart is always ready. In his book ‘The World is Flat,’ New York Times columnist Thomas Friedman wrote, ‘The minute Wal-Mart's meteorologists tell headquarters a hurricane is bearing down on Florida, its supply chain automatically adjusts to a hurricane mix in the Florida stores [Scooter’s emphasis].’ That means plenty of non-perishable food and critical items such as generators appear in stores even before disaster strikes."

I know that I shouldn’t have underestimated the folks in Bentonville and the efficacy of capitalism, but that astounds me. Is this done out of altruism? Certainly the local folks would be trying to help, but as to "management," Wal-Mart critics would say no. Assuming the critics correct, so what? Get the job done.

"Headquarters" making the call means that the corporate equivalent of former FEMA Director Brown made the supply chain adjustment. Why the better results from an equally centralized entity? Why does Wal-Mart have more effective plans in place? Motive is the difference. The market rewards its owners for its company’s management’s planning and the implementation thereof. The owners, in turn, reward management. How hard is that?

This isn't a post against FEMA or a call to privatize it. Of course we need it. This is just a pat on the back to one of the planet's greatest corporate monsters.

Btw, Wal-Mart has meteorologists?

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