Unethical Business Practices Of Walmart Essay

5494 words - 22 pages

UNETHICAL BUSINESS PRACTICES OF WALLMART AND NIKE

INTRODUCTION

Wal-Mart Stores, Inc., branded as  Walmart is an American multinational retail corporation that runs chains of large discount department stores and warehouse stores. The company is the world's second largest public corporation, according to the Fortune Global 500 list in 2013, the biggest private employer in the world with over two million employees, and is the largest retailer in the world. Walmart remains a family-owned business, as the company is controlled by the Walton family, who own a 48 percent stake in Walmart. It is also one of the world’s most valuable companies.
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It operates in Mexico as Walmex, in the United Kingdom as Asda, in Japan as Seiyu, and in India as Best Price. It has wholly owned operations in Argentina, Brazil, and Canada. Walmart's investments outside North America have had mixed results: its operations in the United Kingdom, South America, and China are highly successful, whereas ventures in Germany and South Korea were unsuccessful.

Wal-Mart under fire for 'unethical business practices'
Unfair Treatment of Women Employees:

 WAL-MART has been accused of discriminating against women. They are underpaid, that is men are more paid than women. There are over 70 percent of women working at Wal-Mart, but only a small amount of those women are managers. So, men are holding more management positions than women. A group of 6 women (current and former) employees in California prosecute Wal-Mart for discrimination. According to Hoover’s handbook of American Business: “In June 2001 a group of six current and former female Wal-Mart employees filed a sex discrimination lawsuit (seeking to represent up to 1.6 million current and former Wal-Mart workers) against the company.”An U.S judge certified that these 6 women represent all female employees of Wal-Mart.
Wages:
The activist group Los Angeles Alliance for a New Economy (LAANE) said "in 2006 Walmart reports that full-time hourly associates received, on average, $10.11 an hour." It further calculated that working 34 hours per week an employee earns $17,874 per year and claimed that is about twenty percent less than the average retail worker. (The number of hours the "average retail worker" worked was not specified.) The report from LAANE further opines that this pay is "over $10,000 less than what the average two-person family needs. Walmart managers are judged, in part, based on their ability to control payroll costs. Some say this puts extra pressure on higher-paid workers to be more productive. Walmart insists its wages are generally in line with the current local market in retail labour.
Other critics have noted that in 2001, the average wage for a Walmart Sales Clerk was $8.23 per hour, or $13,861 a year, while the federal poverty line for a family of three was $14,630. Walmart founder Sam Walton once said, "I pay low wages. I can take advantage of that. We're going to be successful, but the basis is a very low-wage, low-benefit model of employment."
In August 2006, Walmart announced that it would roll out an average pay increase of 6% for all new hires at 1,200 U.S. Walmart and Sam's Club locations, but at the same time would institute pay caps on veteran workers. While Walmart maintains that the measures are necessary to stay competitive, critics believe that the salary caps are primarily an effort to push higher-paid veteran workers out of the company.
In 2008, Walmart agreed to pay at least $352 million to settle lawsuits claiming that it forced employees to work off the clock. "Several lawyers...

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