Question One
Wal-Mart is one of the top retailers in America and operates other stores across Europe and Asia. Previous research indicates that the firm’s “everyday low prices” philosophy makes the corporation to provide low wages and benefits to its employees (Work Place Fairness, 2006). For example, Wal-Mart remuneration rates fall below the federal government’s minimum wage thus complicating life for the workers who sometimes have to toil overtime to earn more money. Some of the corporation’s employees in California filed a case against the organization for failing to provide them with a free 30 minutes lunch break (Work Place Fairness, 2006). Besides, the company does not offer health insurance coverage to around 60% of its staff as provided in the labor laws and the federal Constitution (Briones, 2009). Instead, the management tries to hire part-time employees who may not demand health insurance and other essential benefits required by full-time workers.
Wal-Mart’s “everyday low prices” slogan adversely affects the firm’s suppliers. The case study suggests that the corporation wields more authority over its suppliers by controlling every aspect of their production and distribution of their products (Johansson, 2005). The low-cost strategy means that the organization has to employ various methods and technologies by minimizing business complexity to realize low prices to the final consumers. Notably, some of the policies introduced by the company such as "Global Responsible Sourcing Initiative," increase the suppliers' operation cost. Nonetheless, the company always drops suppliers who fail to conform to its established standards and recruit new ones who can work at their desired low prices. The business philosophy has pushed some of the suppliers such as Master Lock and Levis out of the U.S. market to other regions like Asia.
Question Two
Wal-Mart's low-cost strategy traces its origin from the organization's founder Sam Walton who insisted on customer satisfaction through his “Ten-Foot Rule.” The policy emphasizes the need for customer satisfaction through lively Facial expressions and exchanges with the consumers (Ferrell & Fraedrich, 2015). To this end, the firm employs a servant leadership model, which stresses on the managers and supervisors cooperation with their followers in delivering services to the customers. In this regard, the majority of the managers and supervisors always work with the junior staff on the stores' floors thus motivating the followers who in turn increase the customers' shopping experience (Ferrell &Fraedrich, 2015). Such a servant leadership approach requires free information flow and exchange between the administration and the subordinate; hence Wal-Mart uses both top-down, and bottom-up models in communicating with the associates (employees).
The two-way communication channel has promoted participative leadership in which the management incorporates the workers' views in its managerial decisions. As a result, the employees feel motivated as they consider themselves part of the organization. The company also uses open door policy that allows the associates to walk into any of the managers' offices and share their views or concerns regarding the operations in the store. Wal-Mart expects its leaders to keep all conversations with the employees confidential without any discrimination and work together with the specific staff in finding plausible solutions to the issues raised. The policy has eased conflict resolution thus giving the employees more time to attend to their clients’ needs.
Question Three
The government has always accused Wal-Mart of violating sections of the safe environmental laws and regulations. For instance, the U.S. Attorney’s Office in Los Angeles, California issued a subpoena to the firm requesting explanations on various procedures employed by the organization in managing merchandise containing hazardous waste (Ferrell & Fraedrich, 2015). The company later pleaded guilty to court charges that determined the retailer did not follow the law in managing and dumping it hazardous waste. Consequently, the corporation had to spend up to $ 81 million to settle the matter. The organization later explained that it failed to offer adequate training to the workers on the management and disposal of such waste as prescribed in the law.
Wal-Mart exposes its employees operating in the warehouses to cruel working environments coupled with frequent violations of labor laws. Such safety violations occur because Wal-Mart depends on third-party contractors in recruiting these employees; as such, it rarely assesses the safety standards (Ferrell &Fraedrich, 2015). The company also fails to meet the safety standards because it does not want to operate according to labor laws in various countries where it has stores. For instance, the firm refused to abide by the Bangladesh labor union laws on workers safety following the Bangladeshi fire and worker complaints (Ferrell & Fraedrich, 2015). As a result, many workers have accused the organization of denying them the right to join labor unions thus they lack avenues to raise their complaints.
Question Four
After several years of criticism on its environmental policies and harsh working conditions on the workers, Wal-Mart relies on corporate social responsibility as the primary tool for making ethical decisions. In this context, the organization has introduced various measures to improve employees’ satisfaction by responding to some of their complaints (Ferrell, Rogers, Ferrell, & Sawayda, 2013);(Ferrell & Fraedrich, 2015). Approximately 92% of the organization's associates currently have health insurance coverage. Besides, the organization has realized that they need to build a positive image to appeal to more consumers and grow their market share. Therefore, they have to appeal to the public and support greater course and concerns in the community by meeting the needs of all stakeholders such as employees, suppliers, investors, and consumers.
Despite some of the criticisms described above, Wal-Mart has currently developed a new ethical decision strategy based on sustainability (Ferrell & Fraedrich, 2015). The company has improved on its approach workplace diversity, compensation practices, participation in charity, and using renewable energy. To achieve its objectives, Wal-Mart has created The Global Ethics Office, which guides all its stores worldwide on best practices to sound decision-making approaches in a workplace (Ferrell & Fraedrich, 2015). Other than that, the firm has an Ethical Standards Team made up of 200 employees who oversee the organizations relationship with the suppliers to ensure that they comply with the corporation’s standards and local laws and regulations.
Question Five
The human resource department at Wal-Mart should devise effective compensation strategies and comply with federal and labor union laws in their areas of operation (Johansson, 2005). Arguably, people do not stay in organizations because of higher salaries alone, but fair and competitive remuneration make workers stay longer in their companies than those who receive unfair compensations. Therefore, Wal-Mart should improve the workers’ salaries to match the federal government’s minimum wage labor per hour. Arguably, this would increase the firm’s employee retention and reduce annual labor turnover (Gibbs, 2012). On the other hand, Wal-Mart should comply with labor union and national laws of each country in which they operate. The organization should allow its employees to join labor unions that can help them in fighting for their rights and overcome workplace mistreatments such as the ones described above. Properly implemented, these factors will assist Wal-Mart in improving its employees' perception of the corporation thus improving organizational attachment and work satisfaction.
References
Briones, R. (2009). Did Wal-Mart Wake Up? How strategic management handled Wal-Mart’s reputation. Case study submitted to the Arthur W. Page Society Case Study Competition.
Ferrell, O. C., & Fraedrich, J. (2015). Business ethics: Ethical decision making & cases. Nelson Education.
Ferrell, O. C., Rogers, M. M., Ferrell, L., & Sawayda, J. (2013). A framework for understanding ethical supply chain decision making. Journal of Marketing Channels, 20(3-4), 260-287.
Gibbs, M. (2012). Design and implementation of pay for performance.Oxford Handbook of Managerial Economics.University of Chicago Booth School of Business & IZA.
Johansson, E. (2005). Wal-Mart: Rolling back workers' wages, rights, and the American Dream. American Rights at Work.
Work Place Fairness. (2006). The good, the bad, and Wal-Mart. (2018). Workplacefairness.org. Retrieved 20 January 2018, from https://www.workplacefairness.org/reports/good-bad-wal-mart/wal-mart.php
