Unethical practices at Walmart

Ethics and Wal-Mart Wal-Mart's impact on the global social fabric is already significant and becoming more pervasive. With this impact comes the responsibility to manage their corporations' many strategies, initiatives and plans with foresight as to the ethical aspects of their many activities. Ethics and profits auto-correlate to one another, they are not mutually exclusive. For Wal-Mart, it is only a matter of time until their lack of ethics gets reflected both in their earnings and market valuation as measured by their stock price. Wal-Mart has at times pursued aggressive growth at the expense of the consumers they claim to be serving and even the nations they operate in. The bottom line is that the ethical paradoxes for Wal-Mart are many. Despite claiming they have a commitment to ethical corporate behavior, even going as far as to create a (Global Ethics Office 2007), the company is so large and the pressure so great at regional levels, their lapses from ethical judgment including the hiring of hundreds of known illegal immigrants to clean their Super Centers for a significantly lower wage through subcontractors, continue. In the context of their global supply chain, Wal-Marts' ethical challenges are many. Starting with pricing strategies that are forcing many manufacturers to offshore their own production centers to meet the pricing targets Wal-Mart demands, to the fact that literally tens of thousands of manufacturers from China and throughout 3rd world nations are clamoring to sell to them, Wal-Mart finds itself in the perfect position to drive pricing to new lows. It's unethical, even in a capitalist system, to drive down prices at the cost of social obligations to its workers by not offering healthcare insurance, and acquiring low-wage factories off-shore to further drive down prices. Despite the many public relations efforts to assuage and counter criticisms from American customers, Wal-Mart continues in many peoples' mind to contradict the social conscience the company projects from its many philanthropic activities in more developed nations, according to (Charles Fishman, 2003). Nations around the world are clamoring for their production dollars by offering tax-free programs to attract their manufacturing plants. That's the impetus behind Ireland offering tax-free status to any corporation choosing to keep production in that nation. The social consequences and costs are huge and despite any public relations efforts to the contrary, Wal-Mart is facing an American population that is much less trusting than ever before and is getting the impression Wal-Mart could care less about them and their livelihoods but wants their dollars for goods mostly manufactured overseas. It is now common knowledge that 70% of all products sold by Wal-Mart are manufactured in China. Ethics and Wal-Mart collide in the disconnect between their claims of being focused on serving local communities on the one hand, yet demanding local manufacturers meet pricing targets below the cost to manufacture products specifically built for Wal-Mart, much less profit from local production. Ethical violations for Wal-Mart include using factories in Bangladesh that can't be run without abusing child labor, strategizing how to discriminate against older workers who may cost more in healthcare costs if they are full-time, discriminating against women workers by paying them less, hiring illegal immigrants to clean their stores, and completing behind-the-scenes deals with the U.S. Department of Labor over using Medicaid as a replacement for providing their own healthcare, per the (Department of Labor, 2005). Wal-Mart has become a symbol of what happens when manufacturing costs in developing nations drop faster than manufacturing efficiency in developed nations can compensate for. Wal-Marts' ethical lapses stem from their willingness to take overt advantage of this market dynamic, at the expense of child-staffed 3rd world factories, illegal immigrants cleaning stores in the US and Canada where the common retort is "no one wanted the jobs who were citizens" is no excuse for the ethical lapses , driving smaller suppliers off-shore or out of business by unreasonable pricing demands, and most serious, attempting to bend the labor laws of the United States to their competitive advantage. Wal-Mart's initial insistence there was no variation in their pay levels for men versus women, both at the associate and managerial levels, has since also been proven statistically wrong (Richard Drogin, Ph. D. 2003). Dr. Drogin has shown that despite women being more loyal employees by both delivering exceptionally high levels of performance and more years of service than men, their pay scales at significantly lower. The most glaring is the difference in salaries for Regional Vice Presidents. Women occupy only 10.3% of these positions and earn $279,772 versus $419,435 a $139,663 difference, equating to only 66% of a man's salary in the same role. This is shocking, and really an indicator of the lack of consistency between what Wal-Mart says regarding diversity programs and what they actually do. When only one in ten Regional VPs is a woman, there are clear ethical lapses in the leadership in an organization. The discriminations against women appear very clear from the lack of promotions given to them as well; from the research completed (Richard Drogin, Ph. D. 2003) it appears that women are destined in the Wal-Mart culture to stay in Associate roles, despite their higher levels of loyalty and performance.