WalMart Inc. is one of the leading retailers in the world. It has more than 1,5 million employees all over the world, 86 % of them are working in the USA. This company generates more than 2 % of gross natural product of America.
However, there are some problems inside this corporation. From 2000, workers started to bring law suits concerning different ethical issues: compelled working during overtimes and during their scheduled break times without receiving any compensations; lock-in procedures, when workers were locked in by their managers after the store closed for stating in the store until their work have been completed; sexual discrimination of women that concerns amount of salaries and their career growth; health benefits that are considerably lower than in other alike companies; baring workers from entering into working unions; breaking of standards of child labor and employing illegal immigrants. All these cases show that the WalMart's strategy 'providing low prices for customers every day' is based on horrific numerous cases of discrimination and breach of all laws and standards of appropriate and humane attitude to its employees.
Ethical Issues and Employee Health Analysis
The first ethical issues that were addressed to WalMart Inc. concerned not receiving of compensation by employees for working in overtimes and during their scheduled breaks.
Additionally, lock-in procedures that were provided in the company received a large resonance. Managers locked the doors after the store had closed and forced workers to stay inside until they complete all their work. The company justified that all these procedures were aimed to reduce theft of goods and stated that all the employees have been paid their overtimes. However, the managers said that if the employee could not complete his or her work during his shift, he has to stay and complete his work during his own unpaid time. It was prohibited for the stores to go over its target payroll amount so, managers tried to reduce expenses by all possible ways.
Managers clocked out the workers one minute after the beginning of their launch breaks in order to oblige them to work during this time. The employees do not received any compensation for it.
After bringing official suits to the court, head management of WalMart Inc. promised to correct all the problems in the shortest time, and to disciple or dismiss managers who forced off-the-clock work.
WalMart Inc. expenses on settling these suits reached $78, 5 million in 2006. However, it should be mentioned, that the above strategy of breaking rights if employees allowed the WalMart Inc. to keep labor costs of 8 % of sales, which is lower than the industry average of 9-10 % for large retail chains. Additionally, the head managers required from the local managers to reduce labor costs on 0,2-0,3 % annually. In the international scale, these figures bring considerable money effect together with holding competing position on the retail market. Thus, it is hardly to believe that the company will go away from the existing management and lose millions of dollars.
Some of the suits against WalMart concern sexual discrimination of women on working places. The total amount of woman workers in the company comprises about 65 % of full time workers in 2001. However, only 33% of managers were women. Additionally, they received on 62 % less wages than men for the similar work. WalMart commented this situation: women did not have an interest in working in management-level jobs, so, there are a small amount of women-managers in the company. In 2004 the sex discrimination lawsuit against WalMart Inc. covered 1, 6 million of current and former workers and became the largest sex-discrimination suit in the USA.
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In the 1999, the executive manager of the company stated that WalMart 'was behind the rest of the world when it came to the treatment of women'. The sex discrimination strategy in the company is based not on the local inappropriate attitude. It comes from the head management. No sufficient steps to change the situation have been made from that time. Therefore, most probably, the inadequate attitude to women will remain unchangeable.
WalMart policy of lower costs in every part concerned even health benefits offered to the workers. New employers should work 6 months before receiving any health benefits. Sometimes, workers paid for health services went up to $1000. It equals to three the normal amounts of deductibles. The plan cost for health coverage was $ 3,500 in 2002. It is 40% lower than the average for all companies in the USA and 30 % lower than the average in the retail industry. The company made examination of all hospitals and health providers searching the cheapest variant till it signed a national contract with Blue Shield and Blue Cross that allowed further reducing its costs.
Additionally, according to the WalMart memo, the company has to hire more part time workers and by any means try to discourage unhealthy people from applying to work by including some kind of physical activity to all the positions for weeding out unhealthy applicants. The company responses that all the employers have an ability to choose any health program whatever they want and the company offers health benefits to part-time workers.
In response, the company increased the number of workers enrolled in health plan on 8% in 2007 due to introduction of cheaper insurance policies and the total amount of workers who have an ability to receive health insurance from the company reached only 47,4 %. Thus, WalMart Inc. try to spend reduce its expenses of health care insurance as much as possible. Even being pressed by governmental laws and obliged to increase number of workers included into the company's health plan, their amount and the cost offered health procedures are extremely law and there is no tendency of increasing them.
WalMart grimly battles the efforts of its workers to become unionized. Whole departments (meat department in 2000) have been disbanded and numerous stores have been closed for avoiding employees to enter working unions. The company emphatically tells its employees that they would receive no any benefits from working unions; special experts show anti-union videos and fire pro-union workers. The union in Canada stated that the average salary of the workers in the WalMart is on 10-20 Canadian dollars less than the union pay. Therefore, it is even hard to imagine how many millions of dollars the company saves on all its workers but not allowing them to enter into any unions.
The only exception is Chinese stores. The employers in all Chinese stores are allowed to enter the All-China Federation of Trade Unions, which is controlled by the government. It is connected with several factors. Firstly, Chinese laws strictly forbid any companies from blocking workers from entering unions. Secondly, the government wants unions in privately held foreign companies. And the last but not least, Chinese market is the only market where the company have the same prospects for future as in the USA and WalMart wants in any possible way to have good relations with Chinese government.
The use of illegal workers as the janitorial staff and non-payment of salaries and overtimes to them is among other ethical problems of WalMart. The aliens were haired by the third company to which WalMart outsourced its responsibilities. Of course, WalMart Inc. was aware about this situation. The company settled all concerned cases by paying a fine of $11 million to help the government monitor violations of immigrating laws. However, no any considerable steps for changing the situation have been made. Thus, it was some kind of agreement between the company and the government to settle the matter.
WalMart Inc. was fined $205,000 for violating children labor. Employees under 18 years old working past midnight and during school hours and more than 8 hours during the day not having their launch breaks is among the most common violations. However, the company did not take any particular steps to rectify these violations. According to the company's respond, these results were misleading because the schools may have been closed during that day. Also, the company was claimed, that on the supply factories in China, Nicaragua Bangladesh, Indonesia and Swaziland workers did not received their payments for overtime work and were forced to work 'off the clock'. WalMart created special supplier's monitoring system and banned some of the factories for the violations.
In order to improve abovementioned violations, the company made some insignificant steps, like presenting a special polo shirt for the workers who worked over 20 years in the company and additional 10 % employee discount on one of the items.
The company's violations against its employees are very significant and tremendous. A lot of suits were brought into courts and the company spent millions of dollars on penalties. However, almost no any significant steps were made for changing the situation, because the present management process brings the company more than $11 billion net income a year and one of the leading positions in the world.
- The ethical issues against WalMart Inc. are real, because millions of employees from different areas of the country and abroad cannot make the same wrong suits. Other large retailers also have some ethical issues, however not so considerable, as WalMart. For example, Michigan fined big-box retail chain Meijer Inc. more than $190,000 Tuesday for campaign law violations in its effort to build a superstore in a northern Michigan suburb (Flesher, 2008). Therefore, the violations in company do not concern labor and discrimination of its employees.
- In the modern world women often make the same efforts and work the same way as men do and place the same position as men. Percentage of female managers is 2 time less than percentage of female-common workers in WalMart. They work with the same schedule and receive less money. It is open discrimination supported by the head management of the company. I think that the women are interested in the management positions, but they have a lot of barriers.
- Any company should take care about the health of its workers, because ill workers cannot perform their work in the best possible way. Employees spend their life and health making their work (Definition of ethical issues). Thus, providing a health care facilities and plans is paramount task for any company. WalMart Inc. is breaking principles of ethics and morality by providing the cheapest and worst health protection to its employees. I think poor health care strategy, when the company saves millions of dollars on life and health of its employees is really an ethical issue.
- Unionization of stores in China has mostly political character aimed to make good relationships with Chinese government for conquering very profitable market. Only Chinese stores are unionized. No any stores or department in nor any area are allowed to enter any union in order not to increase salaries of workers and to providing better working conditions. WalMart Inc. strictly controls the situation and will make everything possible to avoid any changes in order not to lose its position on the international retail market.