NEW YORK — Wal-Mart Stores Inc. has bumped two of its top executives up a notch.
Tom Coughlin, 53, ascended to the position of executive vice president and vice chairman of the firm’s U.S. operations. He will continue to lead the firm’s Wal-Mart discount stores, Supercenters and Sam’s Clubs while assuming responsibility for support functions such as logistics, real estate development and global procurement, as well as walmart.com.
In August, Coughlin, who had been president and chief executive of the Wal-Mart division, assumed the title at Sam’s Club USA, as well.
As Coughlin’s responsibilities widened, Mike Duke, 53, was promoted to executive vice president of the corporation, and president and ceo of the Wal-Mart division. He had been executive vice president of administration. In his new role, Duke is responsible for operations and merchandising of Wal-Mart’s discount stores and Supercenters, as well as its Neighborhood Markets.
Duke, who had been reporting to Lee Scott, Wal-Mart’s 54-year-old president and ceo, is now situated under Coughlin in the corporate hierarchy. Coughlin’s control over the U.S. operations resembles Wal-Mart’s management structure in its international operations.
"We are fortunate to have a level of quality and depth within our senior management team that allows us to continue to improve as an organization," said Scott in a statement. "These moves will allow us to more effectively capitalize on the collective strengths of our senior team, while helping us bring fresh perspective and ideas to the business."
He added that Sam Walton, the late founder of Wal-Mart, "demonstrated that exposing people to different job responsibilities and business issues is one of the most effective development tools ever."
Coughlin is the third person to occupy the position of vice chairman at Wal-Mart. Scott held the title before he became ceo in 2000, and Donald Soderquist was senior vice chairman before he retired that same year. Coughlin and Duke, along with two other executives, split up Soderquist’s broad responsibilities upon his retirement. Soderquist became the motivational force for the hundreds of thousands of Wal-Mart workers after Walton’s death in 1992.
Jay Allen, senior vice president of corporate affairs, described Duke as "a good strategic thinker with excellent business judgment. He has surrounded himself with good people and really developed them."Duke was hired by Scott in 1995 as vice president of logistics and then took over Scott’s job when he moved further up the corporate ladder. He came to the mass merchant with 23 years of retailing experience with Federated Department Stores, May Department Stores and Venture Stores.
Allen noted, "We have for some time been bringing in people from the outside while still promoting from within, but once they’re in here, it’s what they do for the company that matters."
Bernstein analyst Emme Kozloff described the moves as "part and parcel of the normal course of management shifts and developing a bench. It’s been typical to see a seasoned executive get this [vice chairman title] as a brass ring. It doesn’t signify that Tom Coughlin is dissatisfied. If you’re not getting the ceo title, vice chairman is the next honorable title."
The change gives Duke a chance to become more well rounded, considering he has specialized in logistics, she said. "You have to marry back ‘ops’ and the retail front lines to have really good leaders," said Kozloff.
"They give people chances to extend their roles. You don’t get the chance to extend your role unless you’ve been a star in your existing role," said the analyst.
Who will succeed Scott at the helm of the world’s largest company remains to be seen, though. "It’s way too early to determine who’s going to be the next one," said Kozloff. "Clearly, anyone who’s running a division is a contender."
In other Wal-Mart news, the firm agreed to pay a civil penalty of $750,000 to resolve a lawsuit that charged the firm with failure to report exercise equipment safety hazards in a timely manner, said the U.S. Consumer Product Safety Commission.
The suit was filed in May 2001 by the Justice Department in the U.S. District Court in Maryland. The settlement represents the first time a retailer that wasn’t the importer or the private label marketer of the merchandise involved has been sued and paid a penalty for failing to report a safety problem, said the Commission.Under the settlement, Wal-Mart agreed to establish internal recordkeeping and monitoring systems to keep track of information about product safety hazards.
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