Wal – Mart, the name can evoke different emotions in people, you love it or not. Reality is, the company has and continues to have a huge impact on the global retail market. The current business model dictates that every store and every employee reduce costs to maintain huge financial benefits. In spite of the alleged and proven ethical violations Wal-Mart continues to be driving force on the retail market. Ethical violations include “off the clock work”, asking or directing employees to continue working after they have punched off shift on their time card.
Wages for employees are low and often they do not get paid for overtime. Wal – Mart’s policy states that employees are to be paid for every minute they work. Managers under pressure to keep costs down have been accused of forcing employees to work unpaid overtime, an obvious ethical violation. Wal – Mart may be taking advantage of their locations in rural areas where employment is difficult to obtain by asking them to work long after they have clocked out. These employees may choose to continue working off the clock rather than risk losing their job.
Employee choice or not, it is still unethical. In June of 2001 six former and current female Wal – Mart employees filed a sexual discrimination suit against the company. The lawsuit alleged that Wal – Mart failed to provide equal employment for women. Seventy percent of the workforce was comprised of females but only a very small percentage of the females were in management positions. “Wal – Mart is the nation’s largest employer of women but, unfortunately they are being treated without dignity and respect. ” (Barbaro & Joyce, 2005).
The “good old boy” culture that was established by Sam Walton did not condemn managers who perceived that female employees could have a career in management, this still quietly exists. The health care plan offered to Wal – Mart employees is so expensive they cannot afford the health plan. These employees will either have no insurance, placed on the spouse’s insurance or state run medical assistance. The third option puts the burden onto the taxpayers. The health plan has obstacles for eligibility and high deductibles which eliminates many employees from participation.
Those employees who do elect to enroll in the health plan, average selecting the most basic coverage, which normally includes the employee only, no family members. Another tactic for Wal – Mart to minimize their business model cost structure. Back to the “good old boy” culture Wal – Mart has never wanted relationships with any type of unions. Wal – Mart’s philosophy is we know what’s best for our employees. They are constantly active in stopping unions from being formed in the United States locations.
However, to gain a foothold into the Chinese market, Wal – Mart conceded to the Chinese government when they made it a requirement that for Wal – Mart to have locations in China they must be unionized. How ironic, considering that the majority of goods on the Wal – Mart store shelves are made in China. Wal – Mart was the target of a class action lawsuit based on the use of undocumented workers. “in October 2003 federal agents uncovered hundreds of illegal immigrants employed by outside contractors cleaning its stores. ” (Hoover’s Handbook, pg907).
The allegations included breaking immigration laws, cheating immigrant janitors out of wages, and the government out of workers compensation, social security payments and federal payroll taxes. Wal- Mart claimed it was the outside contractors at fault for the use of undocumented workers. Given that some of the responsibility fell on to the contractor, Wal – Mart also was at fault for not ensuring the contractor was following the law without questioning or researching the outside contractor. Again, suspected unethical practices. Unit III Question for Thought . Are the ethical issues Wal – Mart faces really any different from other large retailers? Wal – Mart’s ethical issues are no different than those faced by any other company regardless of size or industry. However, those that succeed are the ones that monitor ethical issues and attempt to correct the issues before they grow into problems. Wal -Mart has failed to acknowledge any potential ethical problem. In fact, based on the allegations they are a contributing factor to the problem. The unethical business practices have impacted the company’s reputation.
Wal – Mart needs to improve their image and show that they care about their employees. 2. Wal – Mart officials have stated that they don’t feel women are interested in management positions at the company. Do you agree or disagree? During the early years of Wal – Mart I would have to agree that women were not interested. During that era, the majority of women did not work, they were stay at home moms. Those that did seek employment were only interested in part time work, to have a little spending money or to just get out of the house.
However, our society has changed since the birth of the company and the more women are now interested and pursuing higher education and management positions. I believe that once again that is just an excuse given by Wal – Mart executives so that they may stick by their “good old boy” system. 3. Wal – Mart is continually criticized for its health – care policy. Is this really an ethical issue? Why or why not? Employers are not required to offer health care insurance to employees. Generally employers do offer a plan, part of the attractive incentive hiring package.
Wal-Mart is not guilty for not offering a health care plan. What constitutes the unethical behavior from Wal- Mart are elements of the health care plan they do offer. The premiums and deductibles are so high in price that most employees cannot afford to take advantage of the benefit. The company has been accused of deliberately doing this to keep their business costs low. 4. Should Wal-Mart be concerned about unionization of stores since allowing unionization of workers in China? No!
Wal-Mart has done their homework, cost benefit analysis, whatever you want to call it and the powers that be have decided it is to the company advantage to remain in China. First, the majority of goods on the shelves are manufactured in China, cheap labor, overhead costs are down. Second, the Chinese government required Wal-Mart to have unions in the locations. Third, the unions in China may not be as structured and rigid as unions in the U. S. The majority of unions in this country require high wage hourly positions; China’s may be low wage positions.
You and I may never know all of the elements that went into this decision making process but, I can state with confidence that Wal-Mart is the winner on this issue. Should Wal-Mart be concerned, absolutely not!
Barbaro, M. , & Joyce, A. , (2005). Union files wal-mart complaint. Retrieved from – http://www. washingtonpost. com/wp-dyn/articles/A48056-2005Apr12. html Hoover’s Handbook of American Business 2005, Austin, Texas copyright 2004 Stanwick, P. A. , & Stanwick, S. D. , (2009) Understanding business ethics. Upper Saddle River, NJ: Prentice Hall.