CRSE108: Analysis of Unethical Issues and Corporate Failure at Walmart

This report provides an in-depth analysis of the unethical issues faced by Walmart, examining various aspects such as gender discrimination, wage disputes, labor law violations, environmental concerns, and wrongful termination. It explores how these issues have impacted the company's reputation, financial performance, and stakeholder relationships. The report delves into specific incidents and lawsuits, offering a critical evaluation of Walmart's business practices and their ethical implications. The report also provides a discussion of the company's overview, issues regarding payment of wages, working environment, healthcare, labor laws, environment, and the problems faced by the company. The report concludes with recommendations for Walmart to improve its ethical conduct and corporate responsibility, emphasizing the importance of fair treatment of employees, environmental stewardship, and policy changes to regain public trust and ensure long-term success. This report is intended to support students of Corporate Responsibility and Ethics (CRSE108).

Running head: UNETHICAL ISSUES IN WALMART
UNETHICAL ISSUES IN WALMART
Name of Student
Name of University
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1UNETHICAL ISSUES IN WALMART
Executive Summary
This paper aims to explore as well as assess the unethical behaviours practiced within the
Walmart and its effects on the organizational reputation, economy and the overall
development. In conclusion, it can be mentioned that any organization both small and big in
size must act ethically to ensure the success. To remove the allegations and survive in the line
Wal-Mart is required to treat the people fairly, ensuring the welfare of environment as well as
the people and make effective changes in the policies and the management.

2UNETHICAL ISSUES IN WALMART
Table of Contents
Introduction................................................................................................................................3
Discussion..................................................................................................................................3
Company Overview...............................................................................................................3
Gender Discrimination:..........................................................................................................4
Issues Regarding Payment of Wages and With Union:.........................................................4
Uncongenial Working Environment:.....................................................................................5
Issues Regarding the Allocation of Healthcare and Other Benefits:......................................5
Issues with Labour Law:........................................................................................................5
Wrongful Termination:..........................................................................................................6
Issues with Environment:.......................................................................................................6
Problems faced by the Company:..........................................................................................6
Conclusion..................................................................................................................................7
Recommendations......................................................................................................................7
References..................................................................................................................................9

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Introduction
To follow or ensuring the ethical corporate behaviour is important not only for
establishing the reputation but also for retaining employees and conducting business
effectively (Chun et al. 2013). This paper has tried to explore the problems and
complications, which Walmart has faced recently due to its unethical behaviours in respect to
child labours, employee discrimination, compensation, long working hours and many other
issues. To analyse and evaluate the issues the secondary research is done, the information is
collected from different company reports and journals. This paper analyses different business
practices and conducts of Wal-Mart where it failed to obey the ethical norms and some
recommendations are made to suggest the way it can succeed to address these issues and
regain its image.
Discussion
Ethic is the parameter, which states or determines what is wrong and right or the
proper way of behaving and decision-making. To behave in an ethical manner or being
concerned about the welfare of the people within the organization in specific and within the
society in general is an important aspect for achieving the success. It helps to align the values
of workers with the organization and make them loyal to the organization and in turn leads
towards the increased performance, productivity and revenue generation.
Company Overview
Walmart Inc. is U.S based retail MNC operating with around 21.957 billion dollar
income and 514.405-billion dollar revenue owing approximate 11,389 stores throughout the
world. Sam Walton founded it in 1962. It is headquartered in Bentonville, U.S. The products
as well as services it is offering include electronic products like, MP3 players, digital
cameras, printers, laptops and computers. Walmart offers music, movies, books and

4UNETHICAL ISSUES IN WALMART
jewellery. Along with home furnishings, it also offers baby products, sporting goods and
grocery items. Among the financial services it is offering include both debit as well as credit
cards, transferring money and payment of bills (Money.cnn.com, 2019). Though it gained the
fame for its distinct corporate culture, revenue, operational length and the wide number of
people engaged with still it faced multiple complications due to the violation of certain laws
and regulations. These issues are discussed in details below.
Gender Discrimination:
Wal-Mart was accused of gender discrimination. Around 2000 women protested that
they got deprived of the equal opportunities regarding the training, promotion and payment in
comparison to men. It also received the lawsuit due to its failure in providing the due respect
as well as the equality in employment to the female employees. It is observed that men are
holding the respected position within the management in spite of their same quality or
knowledge. Thus, Wal-Mart is criticized as well as suffering for violating the ethics of
equality and justice. This has created the difficulty through degrading the fame. Recently
Wal-Mart has introduced incorporated the workplace diversity initiatives to stop the further
culturing the inequality on gender basis (Jones 2016).
Issues Regarding Payment of Wages and With Union:
Once Wal-Mart managers used to force the workers to work overtime and even they
were not paid for their extra effort instead of Wal-Mart’s policy of payment for every minute.
Because of this violation about compensation caused multiple lawsuits against the company.
In 2008, Wal-Mart proclaimed that they would pay these people as well as fired and
disciplined the managers who required overtime. Thus, Wal-Mart has tried to overcome this
complication. It faced the criticism for its policies against the labour unions. In 1970 Wal-
Mart’s founder resisted the unionization move of Retail Clerks International Union in

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Missouri through hiring a professional union buster to held an anti-union campaign (Sethi
2014), it also hired Alpha Associates, a consulting firm to ensure a union avoidance program
(Milkman 2013).
Uncongenial Working Environment:
Wal-Mart has confronted the criticism regarding the poor working conditions. In 2005
class action lawsuit in Missouri proclaimed around 2 lakh people were pressurised to work
for long time and denied the compensation for that extra effort even not allowed to take rest
or lunch break. Once it reduced the salary base due to the decline in sales. There are many
other issues like, employee discrimination, violation of labour laws regarding the child
employment and its security, which contributed to the allegation of inhuman working
condition within Wal-Mart (Copeland and Labuski 2013).
Issues Regarding the Allocation of Healthcare and Other Benefits:
The employees specially the new ones had to wait for minimum 65 months for being
eligible of health care benefits and the retirees were not allowed to retain their benefit. Wal-
Mart’s health insurance covered around 44%, which is lower than the average of all
companies in U.S are giving as well as 30% less than what other competitors are providing.
In order to minimize the cost respect to healthcare it suggested to the board of directors to
hire the people for part time and avoid the ones not physically sound. It proves that the
management of Wal-Mart is much concerned about profit than welfare of people.
Issues with Labour Law:
Wal-Mart had faced the complications regarding the obligation of child and labour
laws around 2001 to 2006. They incurred a huge amount of fines and suits because of
recruiting the people under the age 18. It is observed that teenagers were working for more
than eight hours a day even at midnight. It is seen that they were even operating machines,

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with chemicals, which is harmful in nature. Ethically everyone should be treated with care
and dignity irrespective of age or religion. It should consider the rule that minors are not
supposed to work in factories.
Wrongful Termination:
Wal-Mart terminated the an employee in Kempt Ville on ground of being rude to the
customer, who get engaged in conflict with a customer who left his cur in his truck locked
with the windows rolled up. When she called for police, that customer refused to rectify the
situation. A 17-year veteran of Wal-Mart’s paramount states that because of being involved
with OUR Walmart, which is its union, and raising sound for the labour condition got fired.
Thus, Wal-Mart unethically terminated the employees for their own concern with no certain
ground (Thomas 2013).
Issues with Environment:
Wal-Mart asserts that they are concerned about the environmental welfare but in real,
they are criticized for doing harm to it. It was exposed that they used to put the chemicals into
the environment which leads to the defects in birth as well as their practice of storing the
fertilizers in parking without any protection proves to be detrimental for environment. It had
to pay millions for violating the Clean Clear Act.
Problems faced by the Company:
Wal-Mart used to pay millions of amount to settle the suits or other issues cropped up
due to its failure in maintaining the ethical norms of behaving which leads to the decline in its
revenue. Wal-Mart’s brand has confronted the problems due to its unethical behaviours. The
dissatisfaction of the internal employees due to the discrimination, maltreatment, selfishness
affecting the loyalty towards the organization which affecting badly on the mind of the
customers also and contributes to the consumer distrust. Thus the failure of the organization

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in maintaining its ethical behaviours resulting in loss in terms of both economically as well as
the branding which at last affecting detrimentally to the long term business. Though multiple
people still shop from Wal-Mart and working with it but the issues raised against its business
conduct have affected immense on the perception of both the internal as well as external
employees, many women are unwilling to work with and shop from in protest of its
discrimination or gender biasness (Chekwa, Martin and Wells 2014). To address these issues
Wal-Mart introduced the program named Associates out Front according to which the
managers agreed to communicate with the workers of different level to get feedback and
formulate the policies according to their requirement. Now it investing the millions in
programs designed to develop the careers of workers in multiple domains, it is collaborating
with many NGOs, industries, suppliers to address the social issues. Thus, it is trying to retain
its position and reputation.
Conclusion
From the above analysis, it can be concluded that to act ethically is essential for any
organization as it contributes to the organization’s productivity, performance, and the success
at last. In case of Wal-Mart, also ethics plays a vital role. If Wal-Mart wants to regain its
position and excel in the business, it must address all the issues through treating the all
employees fairly with equal opportunity and take certain steps to ensure the well-being of
both the environment and its resources. It will make changes in its operational policies and
make flexible as well as suitable to attract and retain the talent, which in turn ensure its
progress.
Recommendations
 Wal-Mart should treat all equally with dignity irrespective of any gender, race,
background or other things.

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 Wal-Mart should improve their working environment and avoid as well as bring
remedy for all issues resulting from the unethical practices.
 The organization must be credible for all activities, practices or policies.
 It must incorporate the right people in right place with ensuring the right policy from
top to down throughout all the Wal-Mart stores across the world.
 Irrespective of its financial power or the achieved revenue, Wal-Mart should
incorporate policies ensuring the welfare of not only people but also environment at
large because sacrificing the environment and human rights is actually immoral as
well as against ethical conducts for one major just on the ground of making the profit
and provide the products in lowest price.

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References
Chekwa, E., Martin, J. and Wells, K., 2014. Riding on the waves of sustained competitive
advantage: consumers’ perspectives on Walmart Corporation. International Journal of the
Academic Business World, 8(2), pp.13-25.
Chun, J.S., Shin, Y., Choi, J.N. and Kim, M.S., 2013. How does corporate ethics contribute to
firm financial performance? The mediating role of collective organizational commitment and
organizational citizenship behavior. Journal of Management, 39(4), pp.853-877.
Copeland, N. and Labuski, C., 2013. The world of Wal-Mart: discounting the american
dream. Routledge.
Jones, A.L., 2016. Implicit Bias as Social Framework Evidence in Employment
Discrimination. U. Pa. L. Rev., 165, p.1221.
Milkman, R., 2013. Back to the future? US labour in the new gilded age. British Journal of
Industrial Relations, 51(4), pp.645-665.
Money.cnn.com. (2019). WMT - Walmart Inc Company Profile - CNNMoney.com. [online]
Available at: https://money.cnn.com/quote/profile/profile.html?symb=WMT [Accessed 14
Sep. 2019].
Sethi, P., 2014. The Wal-Mart affair–where implausible deniability is the coin of the
realm. Corporate Governance, 14(3), pp.424-451.
Thomas, S.J., 2013. Weeding that Garden: Finding a Solution to Garden Variety Emotional
Distress Claims and Discovery Issues. Drake L. Rev., 62, p.599.