Running head: THE UNETHICAL WORLD OF WAL-MART. 1
OL 500: Human Behavior in Organization
Final Draft
SNHU
Dr. Castellon
Roger McGinness Abstract
Ethical issues are problems faced by thousands of corporate workers on a daily basis. With technological advances these problems are more magnified than ever before and when you are the world’s largest employer and sit atop the Forbes Fortune Fifty list your ethical dilemmas become the focal point of millions. Building ethical principles and guidelines are vital to help Wal-Mart remain on top of the Fortune Fifty list and prevent unethical or immoral issues from rising. This paper will take an in depth look into policies, procedures and practices that are in place at Wal-Mart and have the nation if not the World debating their fairness. There are a number of people in which the blame can easily be placed to include corporate leaders and political figures however a vast majority of Wal-Marts unscrupulous business practices could be elevated by simple satisfaction of a smaller profit margin.

Bigger Not Always Better
In the internet, 24 hour news world we live in today business practices are more visible and evident than ever before. There is a saying that when you do something nice for a person they may tell one or two people, however do wrong by them and they will notify everyone they know. This saying holds very true with employees and corporations today. A quick internet search on unscrupulous business practices and you will see the same name over and over. What began as a small business in a small Arkansas town has grown to be the largest private employer in the United States. (Jacques,2002) Wal-Mart Stores (WMT) is the world's largest publicly traded employer, with approximately 2.2 million employees across the globe, a number greater than the population of cities such as Houston, Philadelphia, and Phoenix. In all, nearly 100 publicly-traded companies worldwide employ at least 175,000 workers each. (usatoday.2014) Wal-Mart is bigger than Home Depot, Kroger, Target, Sears, Costco, and K-Mart combined. (Spector.2012) The claims against Wal-Mart go way beyond employee treatment and working conditions. Many of the unethical claims against Wal-Mart deal with the corporations strong arming of small business owners and the hostile takeover of the market share in certain areas. As the world’s largest employer Walmart often claims that the corporation creates jobs and strengthens the economy of its operating areas. There are numerous reports that not only contradict this claim but show hard facts of the very opposite. In an article written in 2013 Public Advocate Bill de Blasio notes “Wal-Mart store openings kill three local jobs for every two they create by reducing retail employment by an average of 2.7 percent in every county they enter.” (de Blasio. 2013) By reducing the number of retail jobs available Wal-Mart can phase out other employers and eventually dictate the incomes and hours worked of local communities. Wages are the number one controllable measure in retail and often times the main factor in whether or not a unit turns a profit. These profits when made by a local “mom and pop” style business would most likely stay in the community however large corporations such as Wal-Mart often shift these profits to areas outside of the community to areas such as their Corporate headquarters or distribution areas.
Magnified Issues
Wages and Healthcare are the two biggest complaints workers have against Wal-Mart. Walmart’s average sale Associate makes $8.81 per hour, according to IBISWorld, an independent market research group. (Spector,2015) This translates to annual pay of $15,576, based upon Walmart’s full-time status of 34 hours per week1. This is significantly below the 2010 Federal Poverty Level of $22,050 for a family of four. The Wall Street Journal reported that the average Walmart cashier makes just $8.48 an hour, far below the $11.22 national average for all cashiers. (Makingchange. 2013) There are numerous studies, facts and figures on the average cost increase of goods at Wal-Mart if the company offered a pay raise and paid employees a starting salary of $12/hour. In retail profit margins are often very slim and heavy competition can cause companies to often lower prices on certain items well below cost just to drive customers in the door. This is especially true in grocery retail, a market in which Wal-Mart has just recently began to operate in. Many of these studies claim the rise in prices of goods would be so minimal that the customer would not notice nor would they mind paying a slightly higher rate to help ensure a decent wage is being paid to employees. Wal-Mart executives have gathered their own data and refute this claim. Andy Murray, Walmart senior vice president, states that “Ten years ago, roughly 50% of Walmart shoppers cited low prices as the most important reason to shop at Walmart; today that number is 75%”. Another very interesting stat in the same article states that in the past five years the world’s largest retailer added 455 U.S. Walmart stores, a 13 percent increase, according to company filings in late January. In the same period its total U.S. workforce, which includes employees at its Sam’s Club warehouse stores, dropped by about 20,000, or 1.4 percent.” (Forbes.2014)
Accountability