Ethics

The article gives a negative perspective of Wal-Marts management in relation to how the stakeholders are treated and their needs metnot met. In a nutshell, the article  reveals that the companys stakeholders,  identified as employees, the labor unions, the government, the consumer rights lobby groups, feminists, suppliers, the environment, and the overall economy, have not had a fair treatment from the company that is challenged by managing the stakeholder relationships effectively. The unethical actions by the Wal-Mart Company also had far reaching consequences and negative impacts on its environmental stakeholders. Some of such stakeholders are the Environmental Protection Agency (EPA), Tennessee and Utah States which accused the company of disregarding the regulations set up by EPA which regulate storm water and related constructions. This violation which led to a civil fine points out the fact that the company  has no plans to ensure sustainable development as its mission seem to be just growth and expansion.

Apart the violation of air safety laws in Massachusetts, the author is of the opinion that the company has stifled the unity of its employee. Accordingly, labor unions especially in China have been calling for unionization of Wal-Marts employees due to their poor working conditions. However, failure by the company to comply with this requirement by the stakeholders, more so in developing world, have negatively impacted on the unionization quest thus impeding the employees bargaining power and possibility of being pushed into a collective bargaining schemes. Also, the authors analyses depict the Company, as unethical, that is, one which has failed to comply with various legal provisions especially those which relate to employment and protection of consumers. One such non compliance situation as asserted by Ferrell is that the company had in the past either failed to insure the employees children or had them on Medicaid, about 46 of the employees. Significantly, the failure by the company to ensure compliance with  the requirements of employees insurance cover as well as non payment of health benefits to certain class of employees go against the federal employment laws. Unethically, to ensure that low prices are charged for the services and products, a negative impact of the low price strategy resulted, with the employees bearing the brunt as the total pay roll wages per employee fell by nearly 5 in 2005. In attempts to ensure that the consumers get low priced items, Ferrell claims that Wal-Mart uses a key strategy in which quality merchandise and services are assorted from a broad at every day low prices. However, the quality of the item may be compromised as the low price is the driving factor behind the success of the stores.

In my opinion Wal-Mart Stores management seriously failed the ethical tests in terms of how it is alleged to manage the relationship with the stakeholders.  The unethical practices and non compliances with the federal laws might have been caused by existence of weak systems of internal control and early warning systems to monitor with a view to correct any legal risks associated with the business. Secondly, the companys management might have been using several loopholes in the laws so as to avoid complying with the federal employment laws. For example, the company excludes part time employees from its health program, the corporate policy ensures that employees have extra long waiting period before becoming eligible for the health care program while some employee are underinsured. At the same time employment of illegal immigrants whose records do not exist in the federal files implies that they cannot qualify for the minimum wage, good working conditions and health care assistance. Other factors like complexity of management, high profit motives, high unemployment rate in some countries, weak or non existent laws as well as their enforcement in some countries, and urge to shelve competition can also be attributed to failure to comply with the employment and consumer protection laws.