Walmart. Household name. Retail giant. Sam Walton’s dream come true. Walton’s dream began with a Ben Franklin franchise store in 1945 in Newport, Arkansas. He applied his ideas and business strategies there nearly tripling sales in just three years while he was there. Within five years, Walton had opened the first few of Walton Five and Dime Stores. He would end up opening 14 total stores. He planted the seeds for the mega retailer Walmart in small towns, testing out ways to beat the big corporations. (Frank, 2006).
In 1962, Walton opened his first Walmart in Rogers, Arkansas. Within a few years, Walton and his wife Helen had opened 24 stores in small communities throughout the state of Arkansas. Walton’s vision for his stores started as fulfilling the needs for household goods, clothing, and everyday staples, but he eventually began to incorporate other departments. Auto, jewelry, and pharmacy departments were added to his vision of what became 276 stores across southern and western American states. Walmart Supercenter was eventually birthed and became what it is known as today. With over 2 million employees by the year 2000, Walmart had become the largest private company in the United States. (Frank, 2006). Although Walmart was successful in terms of finances and in the corporate world, there are many underlying issues.
The federal government created the EEOC, or U.S. Equal Employment Opportunity Commission to protect the American workforce by preventing discrimination and enforcing laws. The EEOC fights for a variety of discrimination and other issues including: age, disability, equal pay, race, sex, pregnancy, and promotion fairness. The EEOC has a responsibility to be an advocate for any plaintiff who files a complaint with them and investigate the issue. The company being investigated has the option to agree with the plaintiff and settle through variety of options or fight the accusations. (U.S. Equal Employment Opportunity Commission, n.d.).
Many companies end up face to face with EEOC, Walmart has been no exception over the years. One major example of the was the class action lawsuit Walmart v. Dukes. A class action suit combines the lawsuits of individuals who may be bringing forth the same kinds of charges against a defendant. This is particularly effective against larger companies that might not be affected by a suit with one plaintiff, but several with the same complaint is suddenly a press issue. (Reinsch & Goltz, 2014).
Walmart v. Dukes was a case filed against Walmart in 2010. The lawsuit was targeting alleged discrimination against approximately 1.5 million female employees that claimed they were paid significantly less than their male counterparts that held the same positions. (Reinsch & Goltz, 2014). This case was pivotal in defining what could be considered a class action suit. In March of 2011, Theodore J. Boutrous Jr., on behalf of Walmart, argued that for a group as large as 1.5 million to file a legitimate complaint against a company, there must be common circumstances. The fact that they were female was not a considerable circumstance. Additionally, he argued that this complaint didn’t prove that in every single case, there was no way to prove that the reasoning behind the unfair wages was due to gender and nothing else.
The Supreme Court ruled in favor of Walmart. It was determined that the case could not be considered a class action suit. This decision became a blueprint for future cases that there would be require several commonalities for plaintiffs in class action suits. Boutrous used three main examples to support his argument for Walmart against the women. One woman received a management promotion, one was demoted after receiving a promotion due to disciplinary infractions, and the last employee had been terminated due to other disciplinary issues. He used these to argue that these women were handled on an individual basis according to behaviors they showed, not gender. The plaintiffs would have to substantially prove that the same situations under the same management team with male employees was handled differently. (Wal-Mart Stores, n.d.). The final verdict stated that the plaintiffs failed to meet the criteria or commonalities for a class suit and discrimination claims had to be awarded on an individual basis (Wal-Mart Stores, 2011).
Walmart has faced many legal issues over the years including overtime wages, gender discrimination, as well violating child labor laws. Walmart combated some of these legal issues by supporting the end of Child labor in Uzbekistan. As the leading purchaser of cotton and additional cotton-based products, accounting for nearly ninety percent of all cotton that is purchased by United States citizens. Walmart was able to gain the support of such organizations as the National Retail Federation, American Association of Footwear and Apparel, the United States Association of Importers of Textiles and Apparels, and the Retail Industry Leaders Association. These organizations came together in 2008 demanding the end of child labor in harvesting cotton. After only a month the National Action Plan was issued that provided actions to be taken in order to comply with the demands that were made by the group. (Wal-Mart Stores, 2011).
Economist Milton Friedman is a pioneer for many entrepreneurs and organizations. His philosophy of free enterprise meaning that a company’s main responsibility is to increase the profits for the owner and shareholders. The Social Responsibility of Business is to Increase it Profits was a key article written by Friedman where he criticized the way that businessmen were thinking in the 1970s. He argued that in addition to profits, business is a matter of considering social implications, elimination of hostile working environments, and providing employment to communities. (Friedman, 1970). Friedman believed that certain executives were taken advantage of their position in communities solely based on profitability. He stressed that while financial decisions and advancements are important, so are ethics. A business must take care of the community around it for true success.
Increasing profits and maintaining the good ethical conduct practices may at times cause executives to feel like they are faced with a conflict of interest. Friedman overall believed the government should have minimal influence on businesses, but he understood the need for government concerning ethics. Friedman argued, Decisions regarding what might be best for society should be made in the political arena, and implementation of policies agreed upon there should be funded by tax dollars, (Halbert & Ingulli, 2008). The working employee needed protection from supervisors and management at the corporate level who do not always empathize with them. Americans pay tax dollars to the government for many reasons, and one of those is protection and labor laws. An executive should feel a sense of responsibility to everyone who is in a subordinate position in relation to them, however, it is important to highlight that they will be influenced by personal experiences and beliefs. These will not always line up with what may be in the best interest for all employees. Executives have a social responsibility to practice ethical behavior that caters to the best interest of everyone on the totem pole of that business.
With over 6,000 stores in operation, Walmart provides millions of jobs to the American workforce. With so many employees, with so many needs, Walmart has had to put many new policies and rules into place to bend ethical practices that will protect the majority. The Issue- Contingent Model of Ethical Decision Making was created by Thomas Jones in 1991. This model essentially considers several factors on a case by case basis and decides what is best for that situation and the parties that will be affected. In this model Jones presented that ethical decisions should have four steps: recognize issue, make judgment, establish moral intent, and engage in behavior. ( 3 Frameworks for Ethical Decision Making, 2017). With every ethical infraction that Walmart has been faced with over the years, they had to defend any previous situations and present solutions. Employees are the back bone of any business and if they don’t feel as though the company is ethically sound, they will leave or shed light on negatives. Walmart took each accusation seriously and went on to form policies and programs that would allow for employees to be satisfied and prevent any further issues. The Issue-Contingent Model is an ethical framework that supports the adjustments that Walmart continues to make on a case by case basis.
As with any corporation, big or small, policies and guidelines are a major part of how a business runs seamlessly. Policies and guidelines provide checklists and tools designed to help make the job of managing employees easier and more consistent. (Hasl-Kelchner, 2006). Walmart has so many stores with different levels of management to maintain such a large corporation and consistency is key to keeping things fair. An employee should be able to go from store to store and feel like the same policies are in place and being followed even in different climates. This sets a standard across the board of expectations and what may not be tolerated against employees or the company itself. The Walton family cannot personally manage each store and each employee, but they do have a duty of standardizing the operation of the stores.
Sam Walton and his wife envisioned being a household name. They wanted to provide stores in all areas providing every day items at prices that were affordable for the working family. The Waltons lived modestly regardless of the success of the business and were committed to being relatable to the consumers they sought to reach. Walton became the American Dream through perseverance, trial and error, and being committed to his vision. Walmart grew from a small hometown store in Arkansas to a billion-dollar corporation as we know it today. However, ethic, business law, and upstanding moral practices must be followed, even by such a retail giant.
3 Frameworks for Ethical Decision Making Florida Tech Online. (2017, July 12). Retrieved November 18, 2018, from https://www.floridatechonline.com/blog/business/3-frameworks-for-ethical-decision-making/
Frank, T. (2006, April 01). A Brief History of Wal-Mart. Retrieved November 12, 2018, from https://corpwatch.org/article/brief-history-wal-mart
Friedman, M. (1970, Sept. 13) The Social Responsibly of Business it to Increase its Profits. New York Times Magazine. Retrieved from https://www.colorado.edu/studentgroups/libertarians/issues/friedman-soc-resp-business.html
Halbert, T., & Ingulli, E. (2008). Law & ethics in the business environment. (6th ed ed.). Mason, OH: South-Western Pub. Chapter One.
Hasl-Kelchner, Hanna. (2006). The business guide to legal literacy: what every manager should know about the law. Appendix B- The ABCs of Legal Literacy. https://ezproxy.apus.edu/login?url=https://ebooks.apus.edu/BUSN311/AppendixB.pdf
Reinsch, R. W., & Goltz, S. (2014). YOU CAN’T GET THERE FROM HERE: IMPLICATIONS OF THE WALMART V. DUKES DECISION FOR ADDRESSING SECOND-GENERATION DISCRIMINATION. Northwestern Journal of Law and Social Policy, 9(2), 264-301. Retrieved from https://search-proquest-com.ezproxy1.apus.edu/docview/1635433893?accountid=8289
U.S. Equal Employment Opportunity Commission. (n.d.). Retrieved from https://www.eeoc.gov/index.cfm
Walmart Takes Action to End Forced Child Labor in Uzbekistan. Retrieved on November 18, 2018 from https://news.walmart.com/news-archive/2008/09/30/walmart-takes-action-to-end-forced-child-labor-in-uzbekistan
Wal-Mart Stores, Inc. v. Dukes, et al., 564 U.S. 338 (2011). (n.d.). Retrieved on November 11, 2018 from https://supreme.justia.com/cases/federal/us/564/338/