Wal-Mart And Social Responsibility Analysis

Wal-Mart and Social Responsibility
Everyone can recognize the yellow smiley face, paired with a promise of “everyday low prices”. One of the most recognized symbols along with Starbuck’s Siren logo and The McDonald’s Arches, Wal-Mart’s smiley face and promise has been directed towards American families who are on a budget. With 3,700 stores in The United States, and employing over two million people, Wal-Mart is the largest private employer in the world (1). Because of all the influence Wal-Mart has, it is in the position to make a difference in many communities within The United States. One major influence it has is the standard of working conditions around the world. Unfortunately, Wal-Mart’s working standards are very low, so low that
many of their workers, even full time workers, are living below the poverty line. These standards set by Wal-Mart force other businesses to also lower their standards. This includes benefits for employees, working conditions, and employee salary. Since Wal-Mart has such a strong influence over other businesses, Wal-Mart has a social responsibility to raise the working standards in the United States and around the world, especially when it comes to their employees.
The ethical issue at hand is that Wal-Mart is setting the working standard too low for other businesses. This issue is interesting because Wal-Mart is still the most popular store around the world. One would think that this would cause Wal-Mart to get a bad representation and lose business but instead Wal-Mart continues to grow. It is so powerful that even when it does more evil than good to communities it still cannot be stopped. If Wal-Mart raised their working standards other businesses would also be forced to raise their working standards. Challengers to the arguments brought up opposing Wal-Mart would point out that it is making more money each year; therefore, they are a success regardless of their questionable practices. Milton Friedman, an economist in the 1950s’ stated in his article titled “The Social Responsibility of Business is to Increase Its Profits” that businesses are not persons, only persons have responsibilities, therefore businesses do not have any responsibilities(7). For example let’s say that the CEO of Wal-Mart decides that he or she would like to discontinue outsourcing as much work as possible to other countries. This would mean that Wal-Mart would be spending much more money on product production. Friedman would argue that the money is not the CEO’s money to decide how to be spent, it is the businesses money. Therefore, by doing this, he is spending investors’ money.
In contrast, if business itself does not have a social responsibility to others, whose responsibility is it to handle basic ethical standards that is supposed to be met by everyone in a society? John Mackey businessman and owner of Whole Foods, states in his article titled “Conscious Capitalism: Creating a New Paradigm for Business” that “Business is fundamentally a community of people working together to create value for other people, their customers, employees, investors, and the greater society”(1 pg.19). Mackey rejects arguments such as the ones made by Friedman that the primary goal of businesses is to increase profits. Instead, he believes that long-term profits are not maximized by making them the primary goal but instead can be achieved by focusing on aspects that value the entire system. In “Conscious Capitalism: Creating a New Paradigm for Business” Mackey lays out the framework of the four great purposes that businesses should aim to meet. Mackey also points out businesses should seek to express four great purposes, “The Good”, “The True”, “Beautiful” and “The Heroic”. Wal-Mart is failing to meet these great purposes by focusing strictly on profit.
“The Good” is expressed through service to others. Within the company Wal-Mart, a stakeholder could be an employee, customers, or suppliers who rely on the company to provide profit for them. A shareholder owns part of a company through stock ownership (1 pg. 5). By focusing more on stakeholders as opposed to shareholders Wal-Mart will achieve more in the sense of long-term profits. Friedman sees it as almost an impossible task to make everyone happy. While balancing employees, customers, suppliers, and themselves it can be difficult for a company to distinguish who is the most important and whom is the most important to answer to. While the fact that businesses cannot make everyone happy is true, I see it as businesses choosing the happiness of themselves and their shareholders over their stakeholders. By focusing more on stakeholders as opposed to shareholders, businesses will achieve more in the sense of long-term profits. Wal-Mart does not meet “The Good” service by not encouraging compassion towards their stakeholders. Within a company such as Wal-Mart, stakeholders could be employees, customers, or suppliers who depend on the company to provide income for themselves. A shareholder owns part of a company through stock ownership. Since its beginning Wal-Mart has been making it cheaper for customers to buy food, but by doing this Wal-Mart is hurting two of their other stakeholders.
One stakeholder is the employee. Employees rely on a paycheck from Wal-Mart may have a more difficult time paying bills and providing for his or her family. The employee might also be exposed to unsafe working conditions resulting in the employee being put into dangerous situations. One recent example of unsafe working conditions in a Wal-Mart factory was a fire that broke out in a Bangladesh factory on November 25, 2012. The fire took 112 workers lives and could have been prevented. The Huffington Post reported that a year ago Wal-Mart rejected spending money to upgrade the same factory in Bangladesh to make them safer. Wal-Mart has sacrificed the working conditions of their employees for the ability to sell cheap products and bring in a profit. When an employee enjoys where they work and believes their employer cares about them, productivity goes up. Also to increase productivity, if employees see his or her employer in a positive light they will express the positives of Wal-Mart to others. An example can be seen through students in a classroom. Students who excel and are interested in math and sciences focus more attention on improving that skill and enjoying more than those students who don’t. For the students that do not enjoy science and math these subjects are a struggle. When asked by a parent what the second child thinks of math and science they will most likely describe the subjects in mundane and uninspiring words. For the first children they will try to sell their parents on the idea of math and science by explaining the benefits and how it can improve someone’s life. The same goes for employees within a business. Cashiers and people who stock the selves are who the customers interact with the most. It is much more beneficial to have an employee on the floor who I going to give the business good publicity and hides the negatives.
The second stakeholder Wal-Mart is hurting by having such cheap costs for products are the suppliers. Suppliers who sell their products to Wal-Mart often sell it for an even cheaper price. Many jobs are outsourced meaning that items such as clothes, blankets, and more were made in countries where the people were paid less than a dollar to make the items. Countries such as China and Bangladesh work for extremely low wages, often below $80 a month (5). By doing this, Wal-Mart puts relentless pressure on suppliers to cut down their costs. Even in the United States Wal-Mart’s warehouse workers are often given unfair working hours. There are records of warehouse workers being paid under minimum wage in Illinois, Southern California, and other parts of the country. It is easy for many companies to turn a blind eye to what is going on around the world within their own company’s factories. It is becoming more and more common for customers to not be in favor of outsourcing. By doing this Wal-Mart may face some serious critics in the near future. With the recent problematic economy Americans are not willing to give up any more jobs.
Wal-Mart has been in the spotlight for years about the way it treats it employees.
The underpaid and poor working conditions have all made headlines. Wal-Mart argues that every new Wal-Mart offers 300 new jobs according to the United Food and Commercial Workers International Union (5). The United Food and Commercial Workers International Union also states Wal-Mart offers its employees a comprehensive benefits package that provides cash up-front to pay for adequate medical expenses and incentives to help them plan for retirement. By doing this Wal-Mart appears to look good and pretends like they are helping out communities. In reality they are not helping as much as they could or as much as they should. Wal-Mart is able to have such low prices because of the wage they pay their employees. Helping people save money and support their families is an altercation for their own workers living below the poverty line. Wal-Mart considers full-time to be only 34 hours, paying an hourly wage of $8.81 an hour. In the United States the official poverty line for a family of four, two adults and two children, is $22,118 according to The U.S. Census Bureau (3). For a household made up of only two adults the poverty line is $15,063. With this being said, if a Wal-Mart employee were to work 34 hours a week every week of the year for $8.81 an hour, it would still leave the employee only making $15,576 a year before taxes reducing the true amount of money earned. This leaves hundreds of
thousands of Wal-Mart employee’s still living below the poverty line. Wal-Mart as a result of this is also the employer with the most workers on government assistance. Ironically Wal-Mart with their “Everyday low prices” is the population they are trying to help. If the company were to only add on 46 cents to every shopping trip a customer made the minimum wage of a Wal-Mart employee could be raised to $12 an hour. By doing this Wal-Mart would meet the great purpose of “The True”. “The True” can be conveyed by the discovery and the pursuit of the truth (1 pg. 5). By discovering the truth Wal-Mart can work to better society. If Wal-Mart were to raise the minimum wage to $12 an hour the 34 hour work week would allow employees to make $21,216 instead of the $15,576 they are making now. By doing this it would put a larger majority of their workers off government assistance and shed a more positive light on Wal-Mart. While the cashiers at Wal-Mart are living paycheck to paycheck the CEO is making more money in an hour than his employee makes in a year.
In 2010 Mike Duke the CEO of Wal-Mart made 35 million dollars (2). One way Wal-Mart keeps their workers from asking for raises and arguing for fair wages are by disallowing employees to unionize. Because Wal-Mart does not have as many working standards to follow it leads to more unfair hours, poor working conditions, and poorer health benefits. This helps them have more control. Wal-Mart has been known to keep heavy surveillance on managers and has threatened to close stores costing hundreds of people jobs if word of unionizing is spread (6). One example of this was in February of 2000 in Jacksonville Texas. After workers in the meat department voted to join a union Wal-Mart shut down the department and moved to pre-packaged meat. During job orientation some Wal-Mart stores have their new employees watch a video about why unionizing is not good and unneeded. Disallowing unions is interfering with “The Beautiful”. Unions are good because they hold employers to ethics such as minimum wage and working conditions which have both been discussed. It does not meet “The Beautiful” is expressed through the search for excellence and the quest for perfection (1 pg. 6). An anti-union stance does not express that a company is aiming for perfection. It does not express the excellence of the company but rather a company controlling workers through
limited freedoms.
John Mackey points out the purposes of lawyers, doctors, and teachers. While all these professions help in different ways their main focus is what is in the defendants, students, or patient’s best interest. So why should a business’s purpose be any different? Mackey states that “Today, corporations are widely perceived as greedy, selfish, exploitative, uncaring-and interested only in maximizing profits”. Many businesses have accepted that this is how industries should operate. Many small local businesses actually have better benefits and better pay than Wal-Mart does. The problem is when Wal-Mart moves into a town, smaller businesses are forced to lower their expenses to be able to compete with Wal-Mart. A small family run business cannot offer the same low prices as Wal-Mart and afford to maintain their business properly. A Wal-Mart being built in a community means more jobs becoming available but unfortunately Wal-Mart supercenters are not the average size grocery store. When these stores are built in a community they take up more space than the average grocery store. This causes problems if the Wal-Mart fails in that community. Not only then has Wal-Mart run out many small “ma and pa” stores, but it has also left the community with a building that cannot be managed by any other business. If Wal-Mart could come up with a more reasonable outcome for their unused buildings they would be closer to meeting Mackey’s final purpose being “The Heroic”. “The Heroic” is made possible by improving the world through heroic efforts. Wal-Mart could take its old building and turn it into a playground for children before they abandon it or use it as a youth center. Today, for-profit organizations are looked at as solely greedy businessmen. If a company such as Wal-Mart with all its influence could work to turn that stereotype around non-profit and for-profit organizations would not be looked as “good and evil”. To do this Wal-Mart must work to meet the four great purposes of business and apply them to every aspect of the company not just the goal to increase profit.

Works Cited
1.)“Conscious Capitalism: Creating a New Paradigm for Business.“ John Mackey Philosophy
230 Moral and Theory and Practice Packet. 2006. 03 Dec. 2012.
2.) Gomstyn, Alice. "Walmart CEO Michael Duke 's Pay: More in an Hour Than Workers Get
All Year? - ABC News." ABCNews.com - Breaking News, Latest News & Top Video News - ABC News. N.p., 2 July 2010. Web. 5 Dec. 2012. http://abcnews.go.com/Business/walmart-ceo-pay-hour-workers-year/story?id=11067470#.UMAywYOClic
3.)"How the Census Bureau Measures Poverty - U.S Census Bureau." Census Bureau
Homepage. N.p., 26 Oct. 2012. Web. 5 Dec. 2012. http://www.census.gov/hhes/www/poverty/about/overview/measure.html>.
4.)Kavoussi, Bonnie. "Walmart Rejected Proposal To Protect Bangladesh Factories Against
Fire: Report." The Huffington Post. N.p., 05 Dec. 2012. Web. 05 Dec. 2012. .
5.)"Making Change at Walmart." Web. United Food and Commercial Workers Union, 2011.
Web. 03 Dec. 2012. .

6.)Norman, Al. "Wal-Mart 's "Meat Wars" With Union Sizzles On." The Huffington Post 16
Mar. 2008: n.pag. Web. 5 Dec. 2012. .
7.)“The Social Responsibility is to Increase Profits.” Milton Friedman. Article. The New
York Times Magazine. Philosophy 230 Moral and Theory and Practice Packet. 1970. 03 Dec. 2012