Introduction
Walmart Stores, Inc., better known as Walmart to the public, is one of the nation’s biggest and most profitable retail corporations. The success of the store is attributed largely to the commitment of Walmart and its employees to provide services at the lowest prices. Since 1969, the slogan of the company has been “Live better. Pay less.,” which describes Walmart’s values and organizational objectives. However, being the biggest retailer and the largest private employer in the world requires the store’s management to be able to combine Walmart’s business goals with ethical principles. Any company’s compliance to ethical norms is especially evident in the way it vows to treat its employees and key stakeholders. Throughout the years, Walmart has had a number of scandals and legal battles, which highlighted the store’s flawed ethical decision-making framework. The purpose of this essay is to examine the effects of Walmart’s business philosophy on its HR practices and treatment of suppliers. Walmart is one of the world’s most influential corporations, which is why it needs to set an example to others and make transformations within its operations, which would benefit its supply and employee stakeholders greatly.
Walmart’s Business Philosophy and Ethical Perception
Walmart has a gigantic economic force, which makes it one of the key players in the modern business environment. Although the store has gone through multiple rounds of transformations (and continues to re-invent itself every day), it is evident that Walmart’s core business strategy remains the same. Ever since Sam Walton decided to make low prices the retailer’s main advantage, Walmart has focused on the economies of scale (Hyde 2019). The store’s domination of the retail market allows it to have a high level of bargaining power, which leads to Walmart reshaping the supply sector and the retail landscape to fit its own needs. As a result, being the largest retailer in the world enables Walmart to dictate the rules, which sometimes results in the store abusing its power.
Walmart introduced multiple initiatives that were arguably unethical to suppliers. Firstly, the store has established the Global Responsible Sourcing Initiative, which was a great burden to Walmart’s supply stakeholders due to them being forced to comply with a new set of operational and cost standards (Layne 2015). Thus, many suppliers were pressured to relocate resulting in thousands of jobs being lost in the United States. Lately, the competition from Amazon Inc. pushed Walmart to new extremes as the store “demanded millions of dollars in discounts on future purchases” (Layne 2015). It is disturbing that brands have no option but to give in because of Walmart’s market dominance.
Human Resource Practices
Human Resources department is an integral part of every organization in terms of corporate culture, job satisfaction, and performance rates. Walmart employs more than 2 million people globally, which leads to the store’s HR team having to face various challenges in ensuring workers deliver the best results, while being happy and safe (Cain 2018). In order to align the business strategies of the company with its HR practices, Walmart has created a variety of initiatives. For example, the store has a cultural orientation program for all the newly hired managers, as well as a week-long cultural training at the Walmart Institute.
Despite the aforementioned positive aspects of Walmart’s HR trajectory, the store is known for treating employees unethically. Walmart hires a lot of people as part-time workers as a part of its scheme to avoid paying them medical benefits. The store’s employees become eligible for insurance only if they work 30 or more hours a week, as per the company’s policies (Cain 2018). Even though Walmart is one of the largest employers in America, it is still not unionized (Cain 2018). The store’s reluctance to be unionized has reached its peak when it threatened termination to anyone supporting the creation of the union.
Legal Violations
The frequency with which Walmart workers file class action lawsuits against their employer is a tell-tale sign of the flaws in the company’s HR practices. In 2009, Walmart had to deal with a massive class-action lawsuit, where “a judge certified that Walmart broke the law by refusing to provide suitable seating for its cashiers who requested it” (Farfan 2019). Publicly, the store agrees that it has chosen to deny cashiers seating. However, Walmart’s public relations department sees no wrongdoing in this since cashiers need to move around re-stocking shelves and greeting customers (Farfan 2019). American with Disabilities Act mandates employers to provide disabled workers with the appropriate accommodation, which Walmart decides to ignore. The store argues that if it allows cashiers to sit, they are less likely to stand up regularly and attain to their additional tasks such as looking into carts or re-arranging products.
Another legal battle that put a stain on Walmart’s reputation as an employer is the case filed by warehouse workers claiming poor occupational conditions and safety violations. In this case, a judge ruled that even though the warehouse workers are not Walmart’s employees per se, “the company could still be named as part of the lawsuit because it owns and/or leases the warehouse facilities where the bad working conditions allegedly exist” (Farfan 2019). The two cases described earlier as well as many more indicate that Walmart has a flawed ethical compass as an organization. By trying to establish the lowest prices in order to deal with the rising competition, the store manages to abuse its market power and mistreat its employees and key stakeholders.
Ethical Decision-Making Framework
Decisions made thus far by Walmart have less to do with what is right, and reflect the store’s desire to generate profits at the expense of the people working with or directly at the company. Although there are certain initiatives Walmart has established in order to improve employee experience and integration into the company, they seem like a bait in order to lure in new workers. Assessing the ethical decisions made by Walmart is hard since they tend to lack any complexity in their effort to sacrifice people to gain more profit. Walmart has a very weak ethical resolution framework, which is why the corporation’s management has to make changes.
Recommendations
In order to transform employees’ attitude towards of Walmart’s human resource policies, the retailer has to shift towards management by objectives. It would greatly benefit organizational performance and employee satisfaction if the company encouraged its workers to participate in the process of setting goals. This way, employees would have an opportunity to raise their concerns as well if they felt like their rights were violated. In addition, although Walmart has a code of conduct and compliance, the store needs to create outside monitoring committees, which would oversee the work of the HR department and take appropriate action in case of violations.
Conclusion
To sum it all up, Walmart’s human resource policies perfectly reflect its size and influence on the market. The store monopolized a large sum of the retail industry, which allowed it to bend the will of employees and suppliers in order to make its operating conditions the most favorable. However, in an effort to cut costs, the company neglects the ethical side of doing business. In order to have a chance of successfully competing against emerging competition, Walmart has to transform its ethical decision-making framework and make changes in its operations.
References
Cain, Aine. 2018. “Walmart Employees Dish on What It’s Actually Like to Work at the Retail Giant.” Business Insider.
Farfan, Barbara. 2019. “Walmart Class Action Employee Lawsuits.” The Balance Small Business.
Hyde, Rachael R. 2019. “How Walmart Model Wins With “Everyday Low Prices.”” Investopedia, Web.
Layne, Nathan. 2015. “Wal-Mart Puts the Squeeze on Suppliers to Share Its Pain as Earnings Sag.” Reuters.