Walmart Case Study

Wal-mart is currently the world’s largest company. It has seen continuous growth and financial success since it was founded in 1962. Today it is living off of a previous reputation of solid ethical business practices that are no longer being exercised. Sam Walton, the founder of Wal-mart, was considered to be “freakishly cheap… Cost-cutting was an obsession in the Wal-mart culture… on business trips, everyone, including the boss, flew coach, and hotel rooms were always shared.” (reclaimdemocracy.org. 2006). This was only part of the reason for Sam Walton’s success.

He was also considered charismatic. He communicated directly with his employees (associates) and he expected customers to be treated as guests when they entered his store. “Mr. Walton always worked hard at shaping his work force, using cheers, rap songs and payment policies to urge employees to be frugal in their jobs and friendly toward customers. Bonuses were paid to all employees in stores where stealing and other inventory losses were kept below 2 percent of sales. Scholarships were established at colleges in names of employees who crafted better ways to handle merchandise.” (nytimes.com, 1992). Today this is not the case. Since the death of Sam Walton in 1992, the company’s reputation has been on a continual downslide. Wal-mart is no longer an ethical company; it has negatively impacted the communities in which it exists. It mistreats its employees and is negatively impacting the nation’s over-all economy. Ethical business practices are not the way of life for today’s Wal-mart.

A prior market firm used by Wal-mart (GSD&M) warned Wal-mart of the public image issues they were facing and had not addressed, even though they had been advised of them for over two years. GSD&M wrote in one review to the company that “sadly, after two years of empty rhetoric and ineffective publicity stunts, we now know that Wal-Mart has not only needlessly hurt its Associates and their families, but has pointlessly hurt the image and success that Sam Walton built.” (wakeupWalMart.com, 2007). Wal-mart has acted in a manner that blends with the theory of egoism. This theory “sets as its goal the benefit, pleasure, or greatest good of the oneself alone.” (wofford.edu, 1997). “Egoist use personal advantage…as the standard for measuring an action’s rightness.” (Shaw, 2008, p. 45). Clearly Wal-mart today is acting with interests geared toward their personal advantage and not considering the wreckage it is leaving all around them. Wal-mart pays its average employees below the poverty level. One-third of the employees are part-time and do not qualify for benefits. The full-time employees that do qualify for benefits often cannot afford them. The health package Wal-mart provides costs the employees thirty five percent of their salary and the option the employees are given to buy Wal-mart stock is out of their price range as well. If an employee is lucky enough to accumulate enough money to purchase Wal-Mart stock, they will have the stock’s value, but not the voting rights that should go with them; those are retained by the company. (pbs.org, 2008). It has all come down to the bottom line for the heads of the Wal-mart company. A true egoist set of values is displayed by Wal-marts actions. Wal-mart has not considered any consequences of its actions outside of a financial profit at the end of the year.

Wal-mart’s unethical business practices have drawn the attention of the public eye. “Wal-Mart’s single-minded focus on driving down costs applies to everything it does including, as we are now learning, how it treats employees.” (wistechnology.com, 2005). This is the reputation that has been spreading throughout the country for the past few years. “At the pinnacle of its success, the company is fending off critics who say Wal-Mart discriminates against women, underpays workers and uses illegal tactics to kill unionization efforts.” (usatoday.com, 2003). Employees have taken issue with Wal-mart’s “systemic racism and sexism, the hiring of illegal immigrants being paid below minimum wage, forced overtime and an active anti-unionization policy.” (ramcigar.com, 2005). This is hardly the image that an ethical company portrays.

Employees have not been the only recipients of Wal-mart’s lack of ethics. The surrounding communities have paid the price as well. “Wal-mart has moved into communities and destroyed them, wiping out stores, slashing the tax base, and turning downtown areas into ghost-towns.” (larouchepub.com, 2003). Wal-mart’s effect on the communities it moves into has been shown to be devastating. It has established business practices that pressures suppliers to offer goods at lower prices than any other competitor if they want to be welcome