Ethical Issues Walmart Paper
There are several factors that account for the changes in the way business is conducted today.Factors such as increased global competition, economic conditions, technology, electronic commerce, workforce diversity, and ethics have all play a significant role in how business is conducted.How a company conducts itself as a business and a corporate citizen is critical to its success.
Wal-Mart is the largest retailer in the world; however they are not exempt to acting ethically. In December 2008, Wal-Mart settled 63 laws suits that spans over several years across 42 states accuses Wal-Mart of cheating workers on pay.
The settlement cost Wal-Mart $352 million. Based on comments made by Wal-Mart attorneys and spokespeople, it was clear that the company realized that they acted unethically. This paper will provide a brief overview of the ethical issues violated; outline the impact the issues has had on the parties involved and society as a whole; identify the cause or contributing factors to the issue; and finally propose a plan that outlines revised ethical standards and communication methods to prevent the issues from reoccurring.
Overview of Ethical Issue. Wal-Mart as a company acted very unethically in this situation. They hired managers to supervise the other employees and not to take advantage of them. The managers were also the one’s acting irresponsible and unethically. Changing the time cards, making the employees work off the clock, is not something that should be done at all. When the managers altered the time cards, they were thinking about now and not the consequences they were going to have to pay. The managers were only thinking about the now and maybe not what the company wanted them to do but they did a selfish act and it hurt the company.
The managers possibly could have done this to get more work out of the employees for less money. The article says the employees were forced to work off the clock this is just not ethical in any sense. Maybe the managers had a quota they had to meet and if they met it they would get a bonus. The company has put so much stress on the managers to do the right thing that now it has become an unethical practice. The theory that comes in to play is the goal based theory the managers and the company were only orried about the outcome. Now the company has to worry about all the people coming together and suing the company for lost wages. The impact that this could have on society is that fact that the company may lose the integrity and trust from the public. The company stock may drop so therefore the people that own stock will lose some money. What has happened in the company not only will affect the employees but will affect the business because when society gets word of the things that were done, the shopping will stop.
Prices might even go up so the consumer will have to purchase less and that will always hurt any business when you stifle how much the customer can buy. The theory that comes to mind would be the goal ethical theory because it seems like the managers or the company was only looking out for the outcomes of the business. This type of concern is so unethical because it affects so many other people. This time the employees were affected and the company acted improperly.
Ethical Change, Deficiency, and Conflict. Wal-Mart was accused of forcing some hundreds to thousands of current and former workers to work off the clock and exhibiting poor wage practices which resulted in multiple lawsuits in both the federal and state courts. Wal-Mart was accused numerous and various illegal acts of wage practices. The allegations included forcing employees to work unpaid off the clock, erasing hours from time cards, and preventing workers from taking lunch and other breaks that were promised by the company or guaranteed by state laws (Greenhouse & Rosenbloom, 2008).
Wal-Mart leadership definitely dropped the ball when attempting to manage within the wage compliance and standardized state laws. Management had the obligation to maintain compliance with all employment and fairness laws and they failed tremendously. If Wal-Mart’s management had responded to these allegations prior to the lawsuits, they could have definitely saved the company millions and their reputation as cheaters. It was their duty to know how the daily operations of each store were being performed and managed.
All companies have defined standard operating procedures and a code of ethics and in these cases it was evident that neither was enforced. Their failure of standardized consistency in policies and procedures and lack of management skills were the two major obstacles that caused the company to be plagued with a bad reputation among employees and the public. Management recognized and accepted the responsibility for their mistakes in judgment, and unethical behavior but, as a result of lawsuits. Lessons learned, not so sure, regardless their unethical acts drew major consequences.
With the continued embarrassment over these allegations and lawsuits Wal-Mart made the most ethical decision to settle the claims of proposed allegations. Wal-Mart officials have made continuous statements pleading that these illegal and unethical acts took place many years ago and they have made strong strides in reducing wage violations and following the state wage compliance laws and agree to more future improvements. These improvements include such actions as implementing standard of ensuring an employee takes the designated breaks and programming the cash registers to identify when an employee is off the clock.
They are making a conscious effort to clean up the wrongs of the past. However, any way you look at it, they were cheating the employees in order to gain company profits. Lawsuits and illegal allegations continue to be a nuisance for the Wal-Mart Corporation, with pending cases alleging sex harassment and forcing employees to miss meals. Again, these are acts from the past but it still outlines the existence of the major inconsistencies with Wal-Mart’s management and their responsibility and ability to maintain a fair and healthy working environment.
Future Resolution Wal-Mart has not completely settled the dispute over employee hours worked without compensation. Wal-Mart has tried to make things right with the workers, as well as trying to clean up its image with the public by setting the 63 lawsuits. It will take more than $352 million dollars to make sure this problem does not resurface (Greenhouse & Rosenbloom, 2008). Another incident such as this one could be detrimental to the very existence of Wal-Mart. One solution to the problem would be to unionize Wal-Mart. There are pros and cons to being unionized.
Under the protection of a union, Wal-Mart workers will be protected from unethical practices such as uncompensated working hours, sexual harassment, as well as the right to fair pay. Being part of a union would also mean that workers would have the right to health care. In January of 2006 Wal-Mart reported that their health care only incorporated 43% of their employees (Wake-up Wal-Mart, 2005). Wal-Mart does not want to become unionized because it would make the company slightly inflexible. The company would have to adhere to the rules and regulations of the union.
One major problem discovered by other companies that became unionized was that workers were less motivated to work for the company and put forth 100% of their efforts. The treat of being fired also went away because under the union rules, in order to terminate an employee for a decline in performance is now regulated under union contract (Free Republic, 2003). Regardless of Wal-Mart’s opposition to become part of a union or not, the company will have to step up efforts to ensure ethical practices are being followed.
A set of consequences should be put into action for those managers who violate and infringe upon those rules. Conclusion It is not clear from the article what policies Wal-Mart had in place at the time of the unethical behavior, however the company claims that “the allegations are not representative of the company we are today” (Greenhouse-Rosenbloom, 2008). The unethical behavior may have been a factor in the company’s highly regarded financial performance. The accusations and these settled cases will serve as precedence for future cases that involve Human Resource and the use of Corporate Resource issues.