Walmart has worked on developing a brand that surpasses competitors in its respective market and the success of the organization tells how well the company is doing thus far. However, there are instances where such a multinational will employ uncouth mechanisms to ensure it stays ahead of competitors and maintains its profit margins. Such business practices find their route in the foundation the organization has laid especially the type of business philosophy the company operates on. Walmart’s business philosophy can be traced back to its initial years when Walton needed to reach areas in the United States that seemed small and useless for major retailing companies that were in place by then (Magretta, 2002). The founder supported the idea of discount-retailing as he believed it would do well for his business. However, the model was already in existences by the time he thought of Walmart and it had not done much for retailing giants like Kmart. Therefore he understood that only a unique business philosophy would set him apart from the rest and make his firm last longer in the market. The company therefore focused and still focuses on offering quality discounted products to a unique and carefully selected customer base.
Even with such a pleasant business philosophy the organization serves an extensive customer base which means that it has more than one hundred thousand suppliers and thousands of employees. So far, the public has been party to numerous accusations of unethical behavior by the organization towards its employees and suppliers. The organization’s business philosophy encourages unethical practices towards its employees and suppliers because the company needs to maintain its discount philosophy while maintaining quality and still make immense profits. Therefore the company overlooks the importance of fairness and ethical conduct towards its employees and suppliers as it works on keeping its profits high. The organization has been accused of underpaying its employees and forcing them to work overtime while subjecting the suppliers it has contracted to some form of slavery when they only act as a means for the organization and not an essential part of its growth (Mesa Community College, 2009).
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Many critics have come up against the strategy Walmart employs in conducting its business. One major unethical practice that has and continues to mar the organization’s image is how the company treats its employees on matters of wages and working overtime. By 2003 the company was recorded to have been paying its employees $8.23 an hour which amounted to $13, 861 every year which was close to one thousand dollars below the set federal poverty level for a family of three individuals. To this day, the company continues to face numerous lawsuits against its managers for forcing employees to work overtime, forcing them to skip lunch breaks and have short breaks, and tampering with the employee wage and time records. By 2008 the company was facing up to eighty different lawsuits that involved the issues identified above and one involved a fifty million dollar settlement for its sixty-nine thousand works in Colorado (Mesa Community College, 2009).
Even with the effects the philosophy has had on its employees and suppliers, it has also affected the organization’s human resource practices and policies. As identified, numerous lawsuits have come up against the organization for how it treats its employees and its remuneration mechanisms. Even as the company maintains what seems as an effective human resource strategy to help fulfill its need for significant numbers employees, the company has been accused of hiring underage workers who are forced to work for menial remunerations and in unfavorable conditions. In many instances these individuals are not granted effective working conditions despite being underage. They are often advised to hide their age and given fake company identification documents, forced to work seven days a week and even overtime without payment. As one can identify, the HR department engages in unethical hiring practices including hiring underage employees. Further, the company has previously faced and settled a lawsuit of eleven million dollars after the organization was accused of hiring undocumented workers in sixty-one of their stores and these workers were forced to work from nine in the night to seven thirty in the morning and locked in stores until managers let them out (Mesa Community College, 2009). Some of these practices are an indication of how the organization’s HR policies and practices have been influenced into unethical hiring behavior.
Further, the organization has been accused by both the government and its workers for violating various legal mandates. In 2014, the United States National Labor Relations Board (NLRB) accused the organization of violating labor laws in fourteen states by threatening, verbally warning and firing its workers who were on strike (Becker, 2015). The United States National Labor Relations Act provides for the right for employees to engage in concerted activities geared towards collective bargaining under which strikes are also included. It means that these workers had the legal right to engage in the activities which they did and the company violated this mandate by threatening, verbally warning and even firing its workers who took part in these activities.
Such accusations have not only been brought forth by the American government but also by the workers and workers’ advocacy groups. The company was in 2017 accused of penalizing workers for taking sick days away from work (Abrams, 2017). The advocacy group termed such absences from work as lawful and that the organization had no mandate to penalize its workers for being away from work due to sickness. The government does provide employees with unpaid leave in instances of serious illness as spelled out in the Family and Medical Leave Act (FMLA). It is an indication that the Walmart employees were lawfully entitled to the sick days they took and the organization had no mandate to penalize them.
According to Walmart’s global ethics statement, the organization has in place an ethical decision making process that the organization often uses in making decisions that touch of matter of ethical conduct or misconduct. The organization ensures to conduct investigations into any ethical allegations that come about and ensure to protect the integrity of investigators. Further, the organization ensures confidentiality throughout such investigation and decisions will be solely based on what is identified from the investigation. Even with such an ethical decision making strategy in place, the organization seems to be filing in making ethical decisions. It is evident through the many ethical misconduct allegations leveled against the company which it fails to address every time.
It is clear from the HR policies and practices that employees are often at a disadvantage right from the hiring process to when they are considered as Walmart employees. It is necessary that the company revise its HR policies to include fairness towards employees even if it means acting against the already established company philosophy. Further, HR needs to develop a safe environment where employees can voice out their complaints and any workplace hardships they are facing. These would work as effective initial steps towards the organization developing a more comfortable and ethically healthy working environment for its employees. It would be effective for Walmart’s employee satisfaction and help improve the company’s profits without taking advantage of its employees.
References
Abrams, R. (2017). Walmart Is Accused of Punishing Workers for Sick Days. Retrieved from https://www.nytimes.com/2017/06/01/business/walmart-workers-sick-days.html
Becker, A. (2015). U.S. labor board alleges Wal-Mart violated labor law in 14 states. Retrieved from https://www.reuters.com/article/us-walmart-labor/u-s-labor-board-alleges-wal-mart-violated-labor-law-in-14-states-idUSBREA0E1PY20140115
Magretta, J. (2002). Why business models matter.
Mesa Community College. (2009). Is Wal-Mart Ethical? Debate. Retrieved from http://www.mc.maricopa.edu/~davpy35701/text/walmart-long.pdf
