How many people walk into Wal-Mart and just look up and around amazed at how vast the entire store is? How many people have gotten lost in a Wal-Mart store or at least separated for a period of time from those they came in with? How many people have gone to a Wal-Mart and actually gotten their workout in for the day because of how much they aimlessly walked around? How many people have come out of Wal-Mart and couldn’t find anything they wanted and came home with everything they didn’t need?
Basically, everyone has heard of Wal-Mart. Some may have heard of its impressive supply chain management, while to most others, Wal-Mart is simply known for its everyday low prices and huge assortment of inventory, providing its customers with practically everything they could possibly need. The main problem to consider here is how many Wal-Mart employees leave the store after their shift satisfied with their job?
Wal-Mart’s corporate culture is built around the idea of cutting costs to provide its customers with the low prices that they expect. The employees, however, are becoming victims to this low-cost strategy. Minimum wage is hardly enough to support one person, let alone a family. It seems as if the corporate structure of Wal-Mart is doing everything it can to keep its employees below the poverty line. Wal-Mart labor protests have arisen in the last year and were aimed at pressing Wal-Mart to increase wages, stop cutting workers’ hours, and to treat employees with respect (Greenhouse). The disgruntled Wal-Mart employees just wanted better working conditions and better wages. And these protesters did not all come from the same Wal-Mart store or even the same state, they came from over 28 stores and 12 different states (Greenhouse). Wal-Mart’s business strategy is designed to keep its employees helpless; a practice that hardly seems to be the least bit ethical. The employees of Wal-Mart deserve to have decent pay and the company’s hindering of this basic right is unethical.
Besides offering low wages to Wal-Mart employees, gender bias is present in the company’s corporate culture. Women earn even less and are often treated with less respect than their male coworkers. Barbara Ehrenreich states in her book, Nickel and Dimed, “I feel oppressed, too, by the mandatory gentility of Wal-Mart culture. This is ladies’ and are all ‘ladies’ here, forbidden, by storewide rule, to raise our voices or cuss. Give me a few weeks of this and I’ll femme out entirely, my stride will be reduced to a mince, I’ll start tucking my head down to one side” (Ehrenreich 156). In her book, Ehrenreich described the oppression that she felt during her time at Wal-Mart. She ended up actually having to quit because she could not afford to work there anymore, her pay not being enough to sustain her living in even a very cheap motel. Her conclusions are consistent with other evidence that comment upon the low wages and long hours that encompass the Wal-Mart working environment.
In the Dukes v. Wal-Mart Stores Inc. case, many Wal-Mart employees banded together to voice their grievances to the Supreme Court. These women were seeking compensation and recognition of the gender discrimination that occurs within their working environment. Unfortunately, the case was thrown out due to a technicality. The plaintiff’s lawyers had improperly sued under a part of the class-action rules that was not primarily concerned with monetary claims (Liptak). In the end, the court did not actually make a decision for whether or not Wal-Mart had in fact discriminated against the women. One of the dissenting justices even stated that there definitely was evidence that gender bias was an element of Wal-Mart’s corporate culture (Liptak). Women filled 70% of the hourly jobs and only 33% held managerial positions. The company uses a centralized personnel policy that allows for subjective decisions by local managers. These practices often give way to the problem of stereotypes swaying personnel choices and this makes decisions about compensation and promotion vulnerable to gender bias (Liptak).
Dr. Richard Drogin, a statistician and professor, has compiled a statistical analysis in regards to the Dukes v. Wal-Mart Stores, Inc. litigation. His analysis of Wal-Mart employees shows that the women employees are concentrated in the lower paying jobs, are paid less than men in the same job, and are less likely than men to advance to management positions (Drogin 46). Despite the fact that women have more seniority, have lower turnover rates, and have higher performance rating in most jobs, these gender disparities still persist (Drogin 46). Drogin shows that these disparities in the difference in earnings, pay rates, and promotion rates are statistically significant. For example, look at this graph of the average earnings of men in comparison to the earnings of women (Drogin 12).
The evidence from the above graph should speak for itself in regards to the gender bias that is clearly a part of the Wal-Mart working environment. Overall, in 2001, women earned about $5,200 less than men, on average (Drogin 12). Within the hourly workforce, women earned about $1,100 less than men and the disparity is even greater among management positions, as clearly displayed in the graph. That year, women earned about $14,500 less among management employees at Wal-Mart (Drogin 12). Not only are women disproportionately working in the lower paid jobs within the stores, but they are also earning less than the men who are holding the same job (Drogin 12). This alarming information brings to light a significant ethics debate.
If Wal-Mart had an official policy of practicing deontological ethics as a part of its corporate structure then there is no way that it would be able to treat its employees the way the company currently does. Deontologists base their decisions about what is right on broad, abstract ethical principles or values such as honesty, fairness, rights, and respect for human beings (Trevino & Nelson 42). Gender bias within Wal-Mart stores would be against the core values of the company. If there was a disparity, then that would simply be ethically wrong and would need to be immediately remedied. Wal-Mart managers taking a deontological approach would insist on having a fair and honest practice when considering which employees to promote and wouldn’t let stereotypes or personal bias affect their decisions. These managers would have a duty to uphold fairness and honesty throughout their work. For those deontologists that focus on rights more than duties, values, or principles, they would make sure that all Wal-Mart employees had access to the basic rights of healthcare and that these employees would have the chance to live above the poverty line. Ehrenreich states in Nickel and Dimed that, “there’s something wrong when you’re not paid enough to buy a Wal-Mart shirt, a clearanced Wal-Mart shirt with a stain on it. ‘I hear you,’ she says, and admits Wal-Mart isn’t working for her either, if the goal is to make a living” (Ehrenreich 181). Wal-Mart should employ a system of deontological ethics to govern its behavior in order to eliminate these types of problems where Wal-Mart employees themselves can’t afford the items in the stores. Performing good ethics and treating employees with respect is absolutely essential for effective business practice (Trevino & Nelson 3).
Wayne F. Cascio describes in his journal article, “Decency Means More than ‘Always Low Prices’: A Comparison of Costco to Wal-Mart’s Sam’s Club,” that practicing bad ethics correlates to bad business. He critiques the way Wal-Mart conducts business especially regarding the company’s employment practices, relationships with suppliers, and the company’s impacts on local economies. Wal-Mart’s obsessive focus on the single core value of always having low prices is not a particularly sound business decision. Costco, in comparison, is able to hold down costs but also pay higher wages. Costco stresses the importance of being good to your employees and uses the high wage strategy to ensure long-term success. Paying workers higher wages reduces turnover, increases productivity, and is just overall good business (Cascio). The key stakeholders of consumers, workers, and shareholders all benefit from a cost-leadership strategy. In comparison to this approach, Ehrenriech describes one of her Wal-Mart coworkers and says that, “In her view, Wal-Mart would rather just keep hiring new people than treating the ones it has decently (Ehrenreich 184). Wal-Mart’s decision to pay low wages to its employees is simply bad business. The turnover rate, loss of production, and overall feeling of employee dissatisfaction with their job is something that Wal-Mart really needs to improve upon if the company wishes to remain competitive and stay out of negative media attention in the future.
In conclusion, I believe Wal-Mart needs to reassess the strategy the company is using to govern its people management procedures. Deontological ethics should be at the root of this new business strategy that will determine what decisions are to be made in the future. Ehrenreich states, “In orientation, we learned that the store’s success depends entirely on us, the associates, in fact, our bright blue vests bear the statement ‘At Wal-Mart, our people make the difference.’ Underneath those vests though, there are real-life charity cases, maybe even shelter-dwellers” (Ehrenreich 175). Currently, I do not believe that Wal-Mart truly stands by its claim that “our people make the difference.” If Wal-Mart employees really were that treasured by the company, then they would be compensated better and wouldn’t be treated as poorly. Higher wages (equally distributed between male and female employees) would lead to an increase in productivity, a lower turnover rate, and positive growth for the company. The satisfaction of Wal-Mart’s employees should become top priority and is an overall good business strategy.
Cascio, W. (2006, August). Decency Means More than “Always Low Prices”: A Comparison of Costco to
Wal-Mart’s Sam’s Club. Academy of Management Perspectives, 20(3), p26. Retrieved from Ebsco Host.
Drogin, R. (2003, February). Statistical Analysis of Gender Patterns in Wal-Mart Workforce. Drogin, Kakigi & Associates.
Ehrenreich, B. (2001). Nickel and Dimed: On (Not) Getting By in America. New York, NY: Henry Holt and Company.
Greenhouse, Steven. “Wal-Mart Labor Protests Grow, Organizers Say.” New York Times. 18 March 2013. Web. 9 October 2012.
Liptak, Adam. “Justices Rule for Wal-Mart in Class-Action Bias Case.” New York Times. 20 June 2011. Web 5 March 2013.
Trevino & Nelson. (1999). Managing Business Ethics. John Wiley & Sons, Inc.