Walmart has always had ethical issues. They have been accused of not paying their employees enough so that they can live comfortably, and also for providing unhealthy food options to the public. This is a blog post about wal mart’s unethical business practices and how it affects its customers on a daily basis.
Sam Walton opened the first Walmart store in Rogers, Arkansas, in 1962 as a grocery store. The corporation that runs over 8,000 stores in fifteen nations is predicted to have 2 million workers from varied backgrounds. Wal-Mart was established in 1969 and began trading on the New York Stock Exchange in 1972. With more than 176 million customer visits each year (Fraedrich, Ferrell & Ferrell 438), the firm has evolved from a local business to an international one (Fraedrich, Ferrell & Ferrell 438).
Problems Faced by Wal-Mart
Prices start at $12
Prices start at $11
Prices start at $14
Prices start at $12
Although the firm is able to provide discounts due to its low-cost policy, it has faced a number of harsh criticisms regarding its treatment of staff and other stakeholders. Wal-Mart touts itself as a money saver for its customers, saving them an average of $950 each year. This has been disputed on the grounds that it has a negative influence on society. Activists who work for feminism have focused their criticism on Walmart’s misdeeds in order to be able to offer low prices. (Fraedrich, Ferrell & Ferrell 440)
Walmart has faced a number of ethical issues and criticism from customers, workers, and rivals. The most serious complaint, however, comes from its rivals, who accuse the firm of unethical behavior. These reasons make it difficult for local stores to compete with it (Fraedrich et al., 441). It’s been said that it was responsible for the closing of certain businesses in regions where it does business.
Walmart has been criticized for low compensation, which it uses to pay its workers. Walmart has been sued in court on several occasions. However, the company defends itself by pointing out that through offering high quality low-cost items, it saves the customer money. Walmart strives to continuously improve services and products in order to reflect its ideals in an effort to keep costs down. To decrease packaging expenses by 5%, Walmart has worked with suppliers to achieve a packaging reduction of 5%.
Walmart is said to have enlisted the services of an outside firm, which has secured both on-time delivery and low prices. According to this arrangement, the manufacturer is obligated to follow all laws set by local governments. The manufacturers are also obligated to reduce the chances of providing defective items to Walmart stores. All of these objectives are meant to improve the suppliers’ sustainability. This plan has been criticized for shifting a large amount of costs onto the suppliers. (Fraedrich et al., 450) The Company has been accused of using its power as a bully to threaten firms that do not comply with its demands in order to intimidate them.
Because of the large number of purchases it makes, the organization has a significant power over its vendors. Some smaller businesses are reliant on Walmart’s mass purchasing because to the company’s enormous buying power. Because to Walmart’s constant price cuts, many firms have moved their operations to Asia in order to save money. The firm also gets a lot of flak for how it treats its workers or “associates,” as it likes to call them. Walmart is pleased with itself as America’s largest employer (Mooney 256).
Despite the fact that it has been charged with maintaining a low-wage policy and discrimination in the provision of employment perks, such as insurance, which is withheld from over 60% of its workers, Walmart has attempted to improve compensation for its personnel based on their store’s performance (Fraedrich et al., 460). The main focus is also on employing more long-term employees who would receive the necessary benefits, such as medical insurance coverage.
Sam Walton never allowed Walmart employees to join the labour unions because of his perception that they are divisive (Mooney 267). However, the lack of labor unions to represent workers’ demands and wishes has harmed their welfare. Walmart is also blamed for providing poor work environments and possibly contributing to prejudice. For example, Walmart was compelled to pay out more than $100 million in compensation to around 100,000 of its workers who were prevented from taking their lunch breaks on a regular basis.
In a separate article, Sanders described how he began to work on behalf of workers in the coalfields after witnessing something that made him want to quit his job. He also claimed that having been scammed by employers in the past, he was afraid of being accused again (Sanders 7). In addition, management has been accused of denying payment for overtime hours and rest breaks to its employees (Mooney 268). The firm has also been charged with systematic sex discrimination.
Walmart has been subjected to a number of ethical issues, including employing illegal immigrants as cleaning staff. The firm apologized for the allegation, claiming that it had collaborated with the federal government in addressing it. Walmart has also been called out for failing to meet environmental safety standards (Mooney 269). This includes concerns regarding how the company acquires, stores, recycles, treats, and disposes of certain goods considered hazardous. To improve its reputation, Walmart has made a number of improvements.
Description of the Case Study
Walmart has attempted to address ethical concerns in a variety of ways. On the subject of gender bias, Wal marts has put into place a policy that provides employment to everyone based on their performance. It has also decided to establish a policy that allows staff to work on a permanent basis so they can be included in the insurance coverage (Mooney 271).
With respect to predation, the firm has stated that its top goal is to offer products at a reasonable price. It has also pushed for the inclusion of all of its stores’ shelves with US-made goods. To address labor concerns, Wal mart has set up an open-door policy. As a result, labor unions are no longer necessary. The firm also uses a green business approach that promotes environmental preservation. This is accomplished by reducing greenhouse gases emissions.
Today, Wal-Mart is faced with a variety of public criticism, both good and bad, depending on the perspective or subject of discussion. One of the most prevalent subjects is that of favoritism, which causes perplexing ideas in the corporate hierarchy.
Henry Sidgwick demonstrates the presence of intuitionism, just egoism (“Egoistic Heronism”) that supports pursuit for personal happiness and utilitarianism (“Universalistic Hedonism”) supporting trail for universal well-being in his analysis of various normative theories known as Sidgwick’s Stratagem. Although Wal-Mart top executives have various viewpoints on these issues, indications that the problem of favoritism persists in the corporate culture are obvious.
This paper considers the ethical concerns raised against or for Wal-Mart, as well as some of the potential outcomes of those opposed or sympathetic viewpoints about the company.
Wal-Mart’s Ethical Issues. Ethical Issues
The most frequent problems pertain to daily activities, with major events occurring when it comes to their marketing methods. Female employees with appropriate credentials, training, expertise, and required achievements are not promoted to the top/executive level. Employees with high education credentials including degrees are unable to get these jobs due to the fact that they have not worked in the sector long enough. They promote individuals on the basis of their company’s career growths.
Even if a person does not work at the company for a long time, chances of moving up in their career are slim regardless of their academic credentials. However, despite these claims, most workers at Wal-Mart still voice their concerns through labor unions and protestations frequently differ from the company’s objective and violate company rules.
Kohlberg’s first stage of ‘Moral Development Theory,’ which is very similar to Piaget’s ‘Moral Thinking Theory,’ demonstrates that pre-conventional morality entails people being afraid to question economically powerful entities such as Wal-Mart owing to the fear of being labeled a disloyalty, with respect to policies like wage guidelines (Crain, 2009). Expressing concerns directly may imply being branded a traitor and severely damage prospects for advancement.
Favoritism in the workplace is a prevalent ethical problem that many organizations confront today. The issue at Wal-Mart is primarily among departmental or general managers during promotion periods. Personal connections, particularly those with the general managers or top executives, frequently lead to some sort of favoritism that harms others’ qualifications. In addition, having a family-friendship style of interaction with the manager may push him or her to value your application more highly than other potential rivals who might have higher grades and greater work experience.
Conflict of Ethical Values
In a nutshell, friends should not have priority for a job or promotion since they have an informal connection. Managers must be role models in promoting ethical concerns in the workplace instead of acting in an aggravating way. When business ethical standards are violated, it becomes clear that measuring performance levels has no meaning. Knowing the company’s top executives in private is the most important business preoccupation, which removes all moral considerations.
Outcomes and Consequences
Employees have filed numerous lawsuits against unethical practices such as discrimination at Wal-Mart. According to Hartley (2010), the company has among the highest number of pending cases regarding ethical concerns in the world, however promotions-related favoritism continues to surface particularly during promotion time.
Walmart faces around 4,000 lawsuits each year on average, according to company records, or about a new case every two hours, implying that it is a defendant in court six times every working day (Hartley, 2010). The courts frequently rule in favor of the large corporation due to the fact that attorneys specialize in suing big businesses because of the potential for substantial material rewards if the ruling goes against the firm. This unethical conduct during employment and promotion procedures does not affect corporate management levels but store employees.
The unethical behaviors that repeat year after year are difficult to change and ultimately overcome, since it is only possible to examine the ramifications over time. People are eager to preserve a morally good society through social and individual rights questioning, according to Kohlberg’s Moral Development Theory, but it fails to be perfect because different social groups have diverse beliefs.
The world’s largest retail store is Walmart. The firm is a private employer that garners a lot of respect and harsh criticism regarding its labor policies, among other things. Community responses to the company’s unethical activities, such as decisions to shop somewhere else in protest, may have significant financial ramifications. Is it ethical for customers to purchase from businesses with connections to unethical practices? Personal beliefs play a big role in this (Frost, 2009).
Most consumers are uncomfortable purchasing from a company that has been linked to a variety of unethical workplace practices, yet they continue to shop at the businesses since the firm provides the cheapest goods within their budget. They make their own values based on personal gains rather than corporate promises.
Personal relationships may lead to the purchase of mutual funds, which may be invested in Wal-Mart. Despite their unethical behavior, you don’t buy from their malls because you’re an indirect business shareholder. You protest their unfair actions by not shopping at their locations, but you are a company stockholder. It’s arguable that maintaining personal authentic beliefs would entail refusing to invest in corporate ventures by finding out where your money is invested.
Ethical Values of Wal-Mart
Standing by personal convictions necessitates careful analysis and consideration of a variety of variables, according to Burrow et al (2009). Despite allegations of unethical acts ranging from employing illegal migrants to low wages, unpaid overtime operations, and gender-based discrimination, most clients choose the firm because it is the cheapest or most cost-effective retail store globally.
Cineplexx also sponsors charitable projects, including financial support for various local non-governmental organizations working in areas such as resource or human conservation. These are clearly ethical deeds that promote local community causes and development concerns through the implementation of personal ethics. The economic success and moral choices that people make are thus strongly influenced by their own personal principles.
Critical analysis of Wal-Mart
On a critical evaluation of Walmart, the firm pays its workers low salaries in comparison to federal standards. The organization’s labor rules emphasize on keeping compensation as low as feasible. As a strategy to attract young people with active spirits who are willing to work for low pay without complaining, the company retrenched old employees.
Wal-Mart is accused of paying women less than men and failing to pay them the same amount for the same work. Gender-based discriminating activities are frequent allegations, thus Wal-Mart is not only a danger to employee livelihoods but also to the general standard of living and economy as a whole. Other competing businesses reduce salaries or benefits in order to gain market share or because they are unable to compete on an equal footing. Due to a lack of competition, other stores force wonderful paying shops to close due on their inability maintain competitive standards. As a result of this pressure, local providers have been forced to give lower quality products at cheaper prices, compromising their earnings.
However, a boycott is insufficient because it does not seek to level the playing fields by proposing legislation that would prohibit unethical behaviors like low pay and perks. Salaries should be controlled by comprehensive nationwide regulations. Treating people’s claims fairly and upholding their fundamental human rights are principles of justice that have been emphasized by thinkers such as Immanuel Kant and John Rowls. Leaders including Martin Luther King and Mahatma Gandhi strove for similar aims that are consistent with the normative approach, which emphasizes distinction between right and wrong, just and unjust actions (Frost, 2009).
The primary goal of this paper is to address ethical concerns regarding employee compensation at Wal-Mart. It also examines the ethical issues surrounding pay and the stakeholders affected by them, as well as the difficulties that arise from these ethical problems. Similarly, it demonstrates how the company should handle the aforementioned ethical concerns and makes recommendations.
The Wal-Mart Store is a large, multinational retail company in the United States with grocery stores, discount department stores, and hypermarkets. It is a family-owned business that was founded by Sam Walton in 1962 and incorporated in 1969. According to various sources, it is the largest firm in the United States and has a significant influence on the U.S economy.
It employs more than 2.2 million people and is the world’s biggest private employer, apart from being the largest corporation in the United States. It has over 11,545 stores and clubs in 28 countries and operates under a different name in various nations; however, it operates as Walmart (Tilly, 2006) in Canada and the United States.
Despite the fact that it is the world’s largest private employer and has a significant economic effect on the United States, it faces several ethical issues regarding wage compensation, gender discrimination, exploitation of employees, and worker health care. Another concern with this company is that management was opposed to establishing a union for the workers who could help them improve their working conditions and establish a complaint procedure against the firm.
In 2013, the business was accused by the National Labor Relations Board of paying employees low wages. According to the NLRB, because the firm paid employees less than the minimum wage and denied them overtime, it was violating their rights and exploiting foreign workers. The company had been fighting for workers’ rights on this case (Ferrell & Fraedrich, 2015).
Despite such difficulties, the firm compelled its employees not to participate in strikes and unlawfully penalized those who had. According to numerous critics, the company’s high turnover indicated that workers were dissatisfied, and the high turnover was attributed to a lack of fair compensation; nevertheless, they also claimed that other elements were involved. Despite being exploited, 70 percent of the business’s employees leave within the first years due to a failure in remuneration despite working hard (Eisenberg 2012).
It was critical to address the issue of compensation since Wal-Mart has a significant influence on the United States’ unemployment rate. According to a study conducted by Oklahoma University, Wal-Mart being the largest private employer has sustainably lowered the rate of unemployment in the United States and other countries; however, it had little impact on relative influence due to other sociocultural variables being regarded more essential than workers’ well-being. Some lawsuits over pay for employees followed, and in 2015, Wal-Mart announced that it would raise its minimum wage to $10 an hour by 2016.
It is critical for a company to recognize that employees are the backbone of the business’s success in an industry since they are its foundation when it comes to performance. To encourage and motivate workers, it is critical to compensate them adequately so that they may be motivated. Estreicher (2009) states that employee compensation has a significant impact on employee job satisfaction and motivation, but it isn’t the only thing to consider.
A fair and transparent compensation system, according to Dajani, has the most significant impact on employee performance. Employees are more confident and driven in assisting their businesses to succeed if the employer agrees to share company earnings in a just and equitable way.
There is a direct relationship between compensation and performance, which has a beneficial influence on performance; therefore, if Wal-Mart developed an effective compensation plan, it would improve its productivity while also avoiding some litigation against it, which is expensive for the business and time-consuming.
The business’s reputation is tarnished since exploitation of employees has a negative influence on the working environment; finally, exploiting a worker cannot keep them in a firm for long. Retaining efficient workers is critical to running a successful company since it saves time and money by eliminating the need to train new ones.
It lowers operating costs while also assuring that employees are well-equipped to do their jobs. In addition to saving money on training new workers, it aids in the retention of efficiency and a knowledgeable staff. Employees may be kept working for a long time by offering health insurance coverage and retirement benefits, allowing businesses to retain them.Aside from a fair compensation system, a firm must use performance management as a method to encourage its employees, such as Wal-Mart does not believe in employing performance appraisal as a means to motivate female employees who make up 65 percent of the company’s hourly paid workforce.
Establishing a properly managed Union for the workers would be appropriate so that it can be used as a platform for communicating their grievances instead of taking matters to court, which has a detrimental impact on the company reputation; furthermore, advocating for such a union will allow the firm to keep employees for longer because it aids in managing issues linked with employees.
I came to the conclusion that employee compensation is a critical topic that must be addressed by company management, since it has an effect on workers’ motivation, retention of staff, overall productivity, and the success of a firm in an industry. Apart from being obligated by law to make certain that employees are adequately compensated, there are regulations and constraints connected with employee pay; thus it is essential for businesses to assure that their compensation structure adheres to rules and regulation set forth by authorities. It’s against the law to refuse to compensate someone fairly, and a compensation plan isn’t sufficient. This may be followed by lawsuits, which are costly and time-consuming to resolve.