Wal-Mart and Corporate Social Responsibility
Walt-Mart, despite of its success for being the giant retailer in the market, has been unethical towards its workers in terms of not giving the intended wage rate and health benefits to its workers. From the small retail store in Arkansas to being a renowned giant retailer not only domestically but also internationally, certainly Wal-Mart has already reached its peak of success. Wal-Mart has been the choice of every consumer in the market for they are the only store to provide the cheapest products in town.
In fact, this is the secret ingredient of Wal-Mart’s success for the past decades – setting prices relatively lower as compared to its competitor to attract more price conscious consumers. Because of this unique strategy, Wal-Mart has been able to acquire impressive growth for the past decades and become one of the successful multinational companies here and abroad. Last 2002, Wal-Mart was able to top the Fortune 500 which ranks all multinational firms around the globe in terms of profitability and sales volume (Hayden et al 7).
To think that Wal-Mart was able to attain such recognition means great on the part of its management. Its relative large size and market share, Wal-Mart has been able to have more bargaining power to its suppliers to have more price discounts to give them enough room for further lowering down their prices by the time they display goods on the shelves of their stores. This serves to be one of the sources of Wal-Mart’s ability to offer cheaper prices.
The other way of Wal-Mart of achieving price competitiveness would be to offer lower wages to their employees to make operational costs relatively low as compared to its competitors. This strategy of Wal-Mart makes them to be the target of criticisms and primary concern of government authorities especially those coming from the Federal Labor Relations Authority an organization that protects the welfare of every workers of the country. This is the gloomy reality inside Wal-Mart.
Every worker must tolerate their minimum wages despite of the fact that they have to work round the clock and always on call even on weekends and this what makes Wal-Mart unethical to its workers. The fact that Wal-Mart’s management do not provide its workers the right wage rate and enough working benefits is already enough ground for the said company to be deemed unethical despite of the benefits that it provides consumers and in the economy as a whole.
Let us further examine the said operational strategy of Wal-Mart and see if this company indeed is being unethical to its workers. According to the book of Ciulla et al entitled Honest Work: A Business Ethics Reader, composed of various articles concerning ethical business performance, it says there that one of the social responsibility of a certain business firms is to increase its profit (Ciulla et al 300).
To some extent this defend the side of Wal-Mart since through paying their worker based on the minimum wage rate and not providing all the worker with necessary benefits increase the profitability of the company. But the main argument of the said article “Social Responsibility and Stake Holder Theory” is on how a business firm would achieve the said goal on ethical means. Given that it is the role of the businesses to increase their profit but that does not give them the right to deprive the rights of their employees.
Certainly there are still other ways on how to minimize their operational cost other than sacrificing the welfare of their employees. Morality is the main concern if ethics is the topic at hand and certainly the under provision of necessary benefits and paying on minimum its workers would be enough to say that Wal-Mart is immoral in that sense since it is their responsibility as employers to ensure the safety of their workers as well as it is the responsibility of Wal-Mart on the society as a whole to pay their workers at the right amount no more no less.
I am not suggesting that Wal-Mart would start to put premium on their worker, what I am trying to suggest here based on the book of Ciulla would be to at least provide that workers should really be getting from working into the company to think that these workers are always on call and would have to work round the clock. Moreover, it is also discussed in the book of Ciulla regarding the importance of integrity, friendship and Olaf principle between the relationship of the management and workers.
When we say integrity, especially for the case of businesses, it is simply following all the rules and policies being implemented by the government as well as keeping promises of the management towards the employees especially during the hiring period. One of the primary things that make Wal-Mart attractive to interested workers would be their great working benefit packages from health insurance down to good compensation and fast career development not to mention the housing benefits that the company provides to their associates.
Truly, Wal-Mart packages are tempting especially for those who are in need of job but once an applicant become part of the company, he/she will eventually discover that it would be really very hard on his/her part to receive those benefits since even those who are already working on Wal-Mart for many years have not yet receive the working benefits that they should receive by the time they set their foot on the production area of Wal-Mart. In short, the management did not keep their promises.
Moreover, Wal-Mart has also been the place for gender biases since there are a lot of women on the top positions of the company as compared men even if there is enough reason to promote a woman manager based on its performance. In this regard, Wal-Mart already breaks its promise regarding providing a better career for its employees and workers. It was identified that only 45 percent of Wal-Mart’s total employees and workers was able to receive their health insurance as compared to other retail companies that was able to give more than 90 percent of their employees and workers health insurance.
If other retail companies can afford to provide their employees and workers with enough compensation why is it that Wal-Mart seems to be having a hard time to comply on what they should be providing into their workers and employees. Dishonesty is among those immoral qualities that not only companies must not posses but also to other individuals that handles welfare of a group of people like politicians.
Once a promise is given, an individual must make it true and if there is any barrier for the said promise not to be given on time it is still the responsibility of those who gave the promise to explain what happened in to inform the other person that he/she did make effort to make the said promise true. It would be better on the part of Wal-Mart to if the management would explain to their employees and workers the reasons of delay of their working benefits and assure them that the management will still have the intention, if they really intend to, to provide those benefits if just so happen that something came up and postponed its provision.
By explaining things to its constituents would make the situation for Wal-Mart lighter. This is the limit of my argument, I assumed that Wal-Mart have really no intentions of giving their workers necessary working benefits. But certainly, my assumption is plausible in a sense that Wal-Mart has been carrying the reputation of not paying their employees right and under providing working benefits for the past decades and it would be very hard to expect Wal-Mart to change dramatically from being dishonest into being truthful on every promise that they will make.
Remember, there are a lot of worker is at stake here and even these workers can tell how Wal-Mart is sincere on its promises especially when it comes to paying their workers. In this regard, based on the concept of integrity, Wal-Mart is certainly unethical on performing its business operation. Please take note that even there are employees of Wal-Mart that receives higher wages and bonuses as well as profit sharing, still their number are not that significant enough to cover those employees and workers that did not paid by Wal-Mart generously.
In short, the number of those employees and workers that receives higher wages and working benefits are fewer as compared to those employees and workers that receive minimum wage rates and no working benefits such as health insurance. The last but not the least concept that would verify the unethical actions of Wal-Mart towards its workers would be based on the article on Ciulla’s book discussing fairness and justice as an important concept in making business transactions. In this concept, Wal-Mart’s ethical condition can be tested on choosing between economic justice and low prices.
Certainly, what Wal-Mart did choose was the latter making the management truly unethical towards the welfare on not only of the workers but also the suppliers of the giant retailer since this would mean demanding for higher discounts on various goods It is the suppliers that comes into Wal-Mart since it would be a jackpot on the side of the suppliers to supply the largest retail store in the market and this what gives Wal-Mart enough bargaining power to negotiate for higher discount rate to further lower down the prices of their goods relative to their competitors.
Economic justice is simply giving what other people should really receive. The only draw back in this argument would be if Wal-Mart would say that the lowering of prices would then eventually lead to the increase of wage rate of their workers since the lower their prices is the more customers would come into their stores making their sales volume and profit to raise dramatically.
However come to think of it, Wal-Mart has already been one of the top gainers of the retail industry and recognized as the number one multinational company in terms of profit volume but the wage rate of their workers still remain untouched for the past years and this problem still be the main concern of various labor unions and federal agencies that are concerned on the welfare of workers and employees under Wal-Mart.
Therefore, even if Wal-Mart has already become the most profitable company in the market, still, improving the wages of their workers comes last into the list of their priorities and this really would make Wal-Mart unethical on performing its operations in the market. After presenting three concepts that would test how ethical is Wal-Mart on performing its business transaction it is already clear that Wal-Mart has been unethical to its workers despite of the success that the company attained for the past years.
Ciulla, Joanne B. et al “Honest Work: A Business Ethics Reader. ” Oxford University Press, 2006. Hayden, Patrick et al “Wal-Mart: Staying on Top of the Fortune 500 – A Case Study on Wal-Mart Stores Inc. ” April 2002. Public Affairs and government Relations Strategy. ” 25 February 2008 <http://mike-pereira. com/subpage/docs/Wal-Mart-CaseStudy. pdf