Wal-Mart Business Ethics Case Study
Ethical Issues at Wal-Mart
Wal-Mart is one of the nation’s largest and most profitable retail business organizations, largely as a result of its ability to provide consumer goods at such a low price that they can not be matched by competitors. In some respects, this may seem to benefit society by virtue of increasing the standard of living through the increased availability and affordability of those goods. However, there is substantial evidence that the presumed benefits to society are illusory. That is because in order to offer consumer goods at such low prices, Wal-Mart has, according to many reports, exploited employees, violated the law, discriminated against women, knowingly hired illegal workers, heavily promoted the outsourcing of labor, and contributed to the exploitation of foreign workers while simultaneously undercutting domestic manufacturers by importing tremendous volumes of cheap products from overseas where employment standards and practices fall far short of ethical business practices required domestically (Cram, 2005; Pea, 2011). On balance, it is difficult to argue against that evidence, mainly because it is based on objectively valid facts.
Employee Exploitation, Illegal Practices, and Discrimination
On one hand, low-wage workers have the choice to work for Wal-Mart or not to. However, in a realistic sense, Wal-Mart is so dominant over the retail sales market that its mere presence in any American community necessarily means that far fewer jobs are available to the workers who have no choice but to work in retail sales (Cascio, 2006). That, in and of itself, would not be as much of an ethical issue except that Wal-Mart chooses to pay its employees low wages in comparison to other comparable companies (Cram, 2005; Pea, 2011), and there is substantial evidence that Wal-Mart deliberately limits the hours or manipulates the designation of employees as part-time workers for the express purpose of ensuring that they are ineligible for company health insurance (Cascio, 2006). In addition to purposely limiting employee hours, Wal-Mart does not provide health coverage for the families of employees who do qualify for health insurance and it charges considerably more for its health insurance than comparable organizations (Cram, 2005; Pea, 2011).
According to many sources and the allegations in the class action lawsuit decided in its favor in 2001, Wal-Mart systematically discriminates against women in its management training and promotional practices; it has illegally refused to hire disabled job applicants; it pressures employees not to unionize; and it has knowingly hired illegal aliens by the hundreds (Cram, 2005; Pea, 2011). That class action suit was decided in Wal-Mart’s favor strictly on procedural grounds having to do with the classification of plaintiffs; the merits of the claims were never adjudicated (Martin, 2011).
Detrimental Effects on American Society
The detrimental effects of Wal-Mart’s business practices actually extend far beyond those individuals who have (almost) no choice but to work for the company. Specifically, because Wal-Mart chooses to pay its workers such low wages, most of them are eligible for state and federal public assistance programs meant for individuals living at or near the poverty level (Cascio, 2006; Cram, 2005; Pea, 2011). Thousands of Wal-Mart employees receive public assistance benefits such as food stamps, housing subsidies, low-income tax credits, and health care services. In effect, Wal-Mart’s business practices and choices foist the responsibility of paying for many of their employees’ expenses onto the tax-paying general public. Wal-Mart reaps tremendous profits while state and federal financial resources must take up the slack to the tune of millions of dollars annually (Cascio, 2006; Cram, 2005; Pea, 2011).
Cascio, W.F. “Decency Means More than ‘Always Low Prices’: A Comparison of Costco to Wal-Mart’s Sam’s Club.” Academy of Management Perspectives
(August 2006). Retrieved from: http://www.ou.edu/russell/UGcomp/Cascio.pdf
Cram, J. “Ten Things Wal-Mart Doesn’t Want You to Know: Find out the True Costs
behind those “Everyday Low Prices.” Campus Progress (May 9, 2005). Retrieved
Martin, A. “Digesting the Supreme Court’s Wal-Mart Decision.” The Atlantic Wire (June
21, 2011). Retrieved from:
Pea, J. “Wal-Mart’s Business Practices Cause Systematic Economic Harm to Women in the U.S. And Worldwide: Latest PR Gambit Can’t Cover Up the Truth.”
Commercial Workers International Union (September 14, 2011). Retrieved from:
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