Walmart - the Future Is Sustainability - Case Study Example

The Future Is Sustainability Name Institution Case study 15: Walmart; the future is sustainability Case Summary Walmart, started in 1962 by Sam Walton, is a representation of the American business. With more than 2 million employees, Walmart serves more than 2 million customers weekly. Sam Walton, a shrewd businessman, believes in customer satisfaction, hard work, and persistence. He has strict ethical rules that ensured the clients are satisfactorily served. Walmart offers the cheapest and high quality products to clients whenever it enters a residence. Being the world’s biggest public corporation has been attributed to it as it saves its customers more than $287 billion annually, about $970 per customer. It was named the most admirable company in 2003 and 2004 by the fortune. The first Walmart store was located in Rogers, Arkansas and within a span of 40 years Walmart roes a small discount store to being the world’s largest public corporation.  With this kind of service, Walmart has kicked its competitors off the market. With most companies suing Walmart for predatory pricing. However, Walmart in its defense insists that their purpose is to provide quality, low cost products to customers. Walmart works hand in hands with its suppliers to ensure that it achieves its everyday low prices. However, time and again Walmart has faced a large number of allegations of unethical behavior. It decided not to have an ethical program because it could follow Walton’s ethics. Many issues have come up due to this concept.  This has not stood in the way of being the largest corporation in the world. It has gone the extra mile to regain its reputation. Ethical allegations against Walmart This utilitarian theory states that overall happiness for all parties in an organization is the most important factor. Successful businesses rely on customer satisfaction, good relation with workers and other stakeholders. The situations at Walmart may turn out to be messy, according to this theory if not controlled. Virtues like Courage, Honesty, Temperance, and Justice must be practiced in a business to ensure complete ethical compliance. Wal-Mart has been unethical according to all the virtues. This has led to numerous criticisms all over the world on the way it treats its employees and general stakeholders. Similarly in business ethics, the normative theories also distinguish the right decisions from the wrong decisions in businesses. According to Kagan, (1998) normative theories stress on the moral beliefs of a society that reflect how people should behave. This means that according to the theory, Walmart has broken this theory. This can be proven by several instances of unethical allegations. These include: Low wages and health benefits Walmart offers low wages and benefits to its ‘associates', as it commonly referred to its workers. It fails to provide health benefits for more than 60% of its staff by claiming that many part time workers are not eligible for this. They insist on hiring more part time workers and workers who are healthy. Attitude towards workers unions Walmart has an attitude towards the union of workers and discourages this. It insists on ‘open door policy', further saying that workers union render a company not competitive. This has not been taken lightly in most countries like china. They have fought to form unions claiming that unions bring workers close together for individual investments. Poor workplace condition and worker discrimination Despite Walmart being the largest known employer after the government in USA, Canada, and Mexico, it has been accused of poor working conditions and discrimination of workers. It has been accused of denying mea land rest breaks to its workers, forcing the court to intervene in the matter. It has also been alleging that Walmart discriminates its employees, especially women. Similarly, a 16 year old boy used one of Walmart's courtesy phones to announce that all black men should leave the store. Employment of illegal immigrants On 2003 October, the immigration and customs office raided the Walmart stores and found out that illegal migrants were working in 61 Walmart stores in over 21 states. Most of them had been contracted as cleaning workers. These accusations have been attributed to Walmart's poor management of the organization. Some executives at Walmart, according to Wall Street Journal article, knew the company’s cleaning contractors had illegal immigrants. They, however, did not do anything to stop the practice. The immigrants worked as many as seven days a week for less than minimum wage. Sustainability concept at Walmart Walmart has approached several sustainability methods. This has been done to assist them repair their image around the world. They have worked with their suppliers to reduce packaging and shifting of goods. Their initial plans was to achieve a 5% reduced packaging cost by 2013. This shows their efforts in try to be sustainable. Ferrell, Fraedrich, & Ferrell, 2013, p. 329) Similarly, Manufactures working with Wal-Mart have to comply with the laws and regulations upon which they operate, in order to satisfy demanding social and environmental policies set by government agencies. China started the process of compliance in 2009 while Wal-Mart suppliers followed after this. By the year 2012, suppliers have had to work with Wal-Mart to make a 20% expansion in the efficiency of energy, and create a way to abolish faulty goods from getting to the Wal-Mart supply chain. (Ferrell et al., 2013, p. 329). Critics of Walmart, however, argues that Walmart has not be able to accomplish its goals because of the many suppliers required to keep Wal-Mart functioning. Walmart has also opened up two environmentally friendly stores in McKinney, Texas and Aurora, Colorado. The stores use electricity from solar panels and wind turbines. This ensures that Walmart can manage energy consumption by regulating heating and cooling of the Walmart stores. This has also attempted to reduce fossil fuel use and to sell more “green” products. Walmart also has started projects to decrease the amount of phosphates in the water. Phosphate is a water pollutant that encourages the growth of oxygen and also depletes algae that can kill fish and other wildlife in the water. Problems faced by Walmart and what they are doing to solve them Walmart has faced several challenges. First and foremost it has faced several operation challenges in different countries. This includes competition among local companies in their own country. With this, Walmart has been forced to enter into joint partnership with local companies of a particular country. Similarly, cost reduction has also challenged Walmart in some way. To overcome this, Walmart has found a way of reducing expenses by outsourcing production of goods especially from China as well as by finding ways of manufacturing green products. Others include unsatisfied employees and unions pressuring Walmart on wages, salaries, and other benefits. This has made Walmart to go an extra mile in providing health benefits and insurance to all employees. Similarly, as in many organizations, Walmart has faced the issue of Unethical executives. For instance Coughlin, a top executive in the organization, stole $500,000 from the company. This forced his resignation from the company. Wal-Mart’s tended to improve performance when other retail outlets have been suffering financially The spread of Walmart stores across the world has led to the financial suffering of other retail stores. However, Walmart still continues to employ successful strategies and acquire enough sources improve its performance. Use of this strategies has enabled Walmart to reduce costs in production, packaging and shipping expenses. It also tends to improve is performance by completely controlling its production by hiring workers at low wage rates and introducing different membership cards to its clients.it also offers discounts to its clients, generating a higher annual turnover rate as compared to other retail outlets. This makes every customer rush to Walmart especially during recessions because the goods are cheaply prices. Walmart offers deals that are friendly on all items that one may need. Even when a customer may prefer to spend their money in other stores, during tough economic times, Wal-Mart is able to assist its clients in a way that other stores cannot. However, ethical standards are gauged in accordance to Walmart. Due to the fact that it can dictate manufacturing and production processes, and also sell goods at a cheaper price than other stores, Wal-Mart can weaken other stores in terms of prices for it to build up shares in the market. It is mostly ready to forfeiture profits on certain goods to draw in customers, who then are purported to make up for the loss by buying products in other categories. It also orders suppliers to cut costs or lose Wal-Mart as a client, which is not a desirable scenario for most manufacturers. Lessons from the case The company has continued to improve its relationships and made efforts to exhibit itself as an ethically responsible company. Its goals to decrease its waste and carbon emissions extend to all the sides of its operations, including its manufacturers and suppliers. The creation of the Wal-Mart’s ethics and compliance proves that Walmart has tried its best to change the situation as opposed to when formal ethics programs were seen as a waste of time. It has proven to be a very aggressive company and will always price check similar products from rivals to make sure they are giving customers the lowest price. Recession shoppers appreciate the marketing ploy and will ignore other stores because of the low price guarantee. In turn, other stores suffer in sales and eventually either play second fiddle or close altogether. Wal-Mart has gained noteworthy platforms in recent times in regaining its lost reputation. The company has been a front-runner in the adoption of energy-efficient and renewable energy technology, and it bids a broad selection of organic items. It has also improved its employee rights record. It is still Wal-Mart, the largest corporation in the world. This means that the future might see it growing to become even better and bigger. Despite critics still questioning its ethical and its fundamental changes, Walmart is seen to have a promising future. References Ferrell, O., Fraedrich, J., & Ferrell, L. (2013). Business ethics: Ethical decision making and cases (9th ed.). Mason, OH: South-Western. Read More