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The History Of A Big Box Departmental Stores, Kmart Corporation

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Kmart Corporation is a chain of big box department stores. It has its headquarters situated in Hoffman Estates, Illinois, United States. The corporation bought sears for 11 billion dollars in 2005 forming a new larger corporation with the name Sears Holding Corporation. The company is believed to be opened in 1963 where it gradually operated a maximum number of 941 Kmart stores. As at the year 2016, this number had reduced t801 stores. It operates stores that are situated in 49 states, the U.S. Virgin Islands, Puerto Rico and Guam that has the largest Kmart store in the world. The corporation also operates stores in Mexico, Canada, and Eastern Europe. It also exists in in New Zealand and Australia however, it has no relation to the stores in the United States except in name (United States Securities and Exchange Commission, 2012).

The corporation being a large business with millions of employment opportunities and thousands of workers, it creates a very susceptible legal and political environment that the corporation must control and maintain. They must work for a good image to gain the political support of their domestic and local governments in order to survive and expand without scrutiny and supervision of the governments that could otherwise prevent growth. A good image also helps the corporation to maintain good relations with their customers. Our paper will be based on the on the Canadian and American legal and political impact on the operation of the corporation. Canada and America happen to house many stores of the Kmart Corporation. This shows that the corporation finds the environment provided by the governments in these countries conducive for it carry out business. The two countries seem to have similar rules and regulation that govern the way businesses are carried out.

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From time to time, the corporation has been involved in regulatory actions and lawsuits that relate to businesses. Some of them are in prerogatives with statuses for application of laws processes against the corporate defendant. The corporation is affected by the ligating trends that include the class-action allegations that come under a number of employment and consumer protection laws. These law include the hour and wage laws. Currently, in the United States, the legal proceedings are in relation to the Orchard Supply Hardware subsidiary (OSH) that has received notification of violation from the California Air Quality Management District (SCAQMD). The notification alleged that the OSH hardware’s are situated in the SCAQMD jurisdiction. The two are still negotiating over this matter.

Both the supreme courts of the United States and Canada changed long-standing laws on the corporate political spending activities. The US Supreme Court struck down the Tillman Act that earlier limited political spending of the corporates. Under the new laws, the corporation will only be allowed to spend an unlimited amount of its funds on independent expenditures to oppose or support a candidate provided that they do not coordinate the candidate’s efforts with their efforts. However, they are still prohibited from making direct contributions to federal candidates. Trades associations and other third-party groups are allowed to use unlimited general purpose funds for independent expenditures.

The spending policy of the Kmart Corporation allows the company to engage in campaigns and other political processes to help in the election of candidates for the political parties who believe in the free enterprise system and support the retail industry. The Kmart Corporation contributes to the state level candidates and the state retail association political action committees with corporate funds. Statistics show that the corporation has contributed over $900,000 to the state level recipients and an additional $ 23,000 to 527 groups since the election cycle of the year 2002.

The corporation has always been and will continue being affected by the economic conditions of the surrounding environment. If the economy fails to sustain its recovery, experiences a decline in the level of consumer- spending and other conditions that include inflation, the level of gross margins are expected to decline (Markham, 2006). This will negatively affect the liquidity ratios. Most of the economic factors are beyond the control of the corporation. Some the factors that the corporation cannot control include inflation, spending levels and the consumer confidence, employment levels, fuel costs and consumer debt levels among many others. These factors require the involvement of both the local and federal government. These factors have an adverse effect on the disposable consumer’s disposable income.

In conclusion, for the corporation to keep on thriving in the two economies, it needs to ensure that it adheres to the legal and political regulations put place by the authorities. The good thing with the Canadian and United States regulations is that they are not biased to specific corporations but instead affect all the corporation in the industry. This gives the corporations in the industries equal opportunities for the corporations to compete favourably. With the strong corporate governance and leadership the corporation has been able to overcome completion in the market and thus maintain and further expanding its share in the market.


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