Wal-Mart Inc is regarded as the universally leading retail outlet with over a million workers. Ever since its incorporation in fiscal 1945 under Walton Sam’s tenure, Wal-Mart has been the leading private corporation having 3,372 stores and generating revenues equivalent to $220 billion in sales. Despite its significant contributions to America’s household progress, the firm has been criticized on various employee issues. For instance, the firm is criticized for the understaffing issues, exclusive health-check cover policy, working overtime, gender favoritism, jeopardizing workers’ effort to form a union, and paying human resources low remuneration. Despite these negative claims, Wal-Mart has been reported to be good for the consumers. However, the controversies surrounding Wal-Mart operations and management practices still make many people doubt whether Wal-Mart Inc is good or bad for the consumers.
Up Against Wal-Mart: Wal-Mart Inc perceived to be bad for the consumers.
Although complaints about low wages and understaffing seem to be common amongst retail workers, the Wal-Mart case is seemingly alarming. As drawn from Olsson’s article, the firm appears to employ a façade strategy by setting work pay limits that are never adhered to (Olsson, 2003). Wal-Mart set wage rates that appear like a mere joke since even the low-class consumers in America cannot live on such paychecks. Wal-Mart financial reports indicate that those employees who deem themselves as better-paid managers earn annual payment equivalent to $18,000. This may seem a worthwhile pack for unemployed individuals. The fact is that, out of such meager pay, the firm deducts $85 from the biweekly paycheck, which amounts to $550. Besides, according to Olsson (2003), many employees who are also Wal-Mart products consumers still go without the health indemnity cover and hence rely on Medicaid.
Despite implementing measures on a global expansion strategy, Wal-Mart is evidently understaffed. This leaves the work burden to the already few-serving employees who are regularly forced to work for extra hours exclusive of overtime compensation. Such an approach is deemed unethical since such staffs operate at dismal remuneration at the expense of helping the firm to offer low-cost products to the consumers (Olsson, 2003). Given that, Wal-Mart employees also consume the company products; the underpayments make them appear vexed of their retirement and health benefits when office positions are considered.
As Olsson indicates in the article, masculinity favoritism issues mar Wal-Mart. Currently, Wal-Mart houses over 700,000 women who actually face erroneous promotion rebuff coupled with a pitiable working environment as well as little income (Olsson, 2003). The little income paid to the female employees is hard enough to earn a living. Wal-Mart Inc’s management insists that the company adequately upholds and educates female managers, yet it is evident that very few female managers form part of the administration. Moreover, the company relentlessly focuses on its bottom-line outlay cutting strategies. To achieve this, pay discrimination has to prevail. For instance, Wal-Mart pays female store managers much fewer wages than men on similar posts.
Assertions made on Wal-Mart’s business operations by its critics’ equally show that the firm’s management aggressively fights employees’ interest to join or form employment unions. In fact, the basis for fighting unions is based on the need to cut-down overheads on various fronts to offer cheap products to the consumers. By stopping employees from organizing unions, Wal-Mart deliberately violates the national labor bylaws, given that consumers’ (employees) purchasing power is reduced via the dismal wages paid. For instance, the company breaches the labor bylaws by confiscating union prose, sacking union cohorts, and interrogating human resources. In discouraging workforce bid to unionize, Wal-Mart dispatches various teams of union busters from the head offices and sometimes sets up CCTVs to supervise the workforce. Thus, it is apparent that Wal-Mart develops an anti-union policy to oblige the workforce to adopt non-acceptance customs to what the firm considers a vice to the daily operations. The initiative proves to be bad for the employees who consume the company’s products and services.
Ideally, if the firm supports the formation of unions, incidences such as unpleasant packages, pitiable operational setting, understaffing, pricey healthcare schemes, voluntary overtime jobs, as well as sex favoritism could be permanently resolved. In fact, this could make Wal-Mart good for the consumers. It is very frustrating when the employees’ efforts geared towards the formation of unions are just thwarted. Techniques such as the open-door plan, valuable opinion assessment, CSR, as well as transformational management can help Wal-Mart to resolve the identified consumer problems and become good for the employees who are part of the consumers. Additionally, the entire community may opt to stand-up against industrial violations by Wal-Mart (Mars, 2004). Such a bold united move could help restore the provision of affordable health indemnity, equal employment opportunities, enhanced pay, and less workload. The strategy could probably make Wal-Mart Inc good for the consumers.
Progressive Wal-Mart: Good for the consumers
Notwithstanding Wal-Mart’s criticisms, Mallaby affirms that this company plotted to contain the health costs. In order to realize this, it had to fight the unreceptive promotion that incorporated the media advertisements, decisive documentary shows, and public notice. It is actually true that if Wal-Mart faces numerous such criticisms, the company has no options but to curtail costs and lower product prices. The strategy will put market rivals at bay whilst enriching shareholders and consumers (Mallaby, 2005). For instance, food discounting by Wal-Mart is deemed a successful progressive story since it allows American shoppers to save when purchasing Wal-Mart’s products.
Besides, the low product prices may be good gains to the moderate and poor income households. However, they are adequately smaller as compared to Wal-Mart Inc employees’ take-home pay suppressions. It is apparent that this company has caused a major annual remuneration loss for all retail human resources. The figure of $4.7 billion retail earnings loss for the workforce should not be disputed for a company that sealed $6.6billion profits at the expense of the crying employees (Britt, 2010). It is upsetting to argue that Wal-Mart employees who have been deemed the victims of the antagonizing working conditions have higher purchasing powers due to the low-cost commodities.
In essence, the worrying trends in handling the employees only come out clear in the fact that Wal-Mart’s staff work additional hours voluntarily. Despite this, their fellows in other retail stores enjoy the accruing benefits from additional jobs done (Mallaby, 2005). Therefore, regardless of such productive moves by the company, Mallaby’s assertions that Wal-Mart’s progressive health system caters for the employees to receive enhanced healthcare is not feasible. In fact, the company has fostered an unhealthy business environment, which generally affects the purchasing power of all consumers.
On the other hand, it is evident that Wal-Mart produces additional goods in an hour that eventually leads to the elevation of the living standards of the consumers. Wal-Mart impinges positively on the customers through creating consumer surplus. This enables consumers to have choices from a variety of advanced and well-parked goods purchased at low costs. Furthermore, Wal-Mart provides paramount benefits relating to the welfare of the consumers, given that customers can possibly save money (Roberts & Berg, 2012). The low and middle waged or poor consumers expend just a fraction of their income when purchasing Wal-Mart commodities. Hence, Wal-Mart is both good and bad for the consumers.
Wal-Mart is indeed not a surprising case that has many business critics, as stipulated in the Progressive Wal-Mart article. The article highlighted and amicably defended the fact that the company has strived for a long time to keep its product prices very low and that such business moves are intended to entice consumers to buy the company’s products and keep the market rivals at bay. The company is understaffed, and as a result, the employees who are also Wal-Mart Inc products consumers are overworked without any extra pay and are equally barred from forming any unions according to the federal labor laws.
Conversely, the “Up Against Wal-Mart” clearly drew attention to the fact that Wal-Mart’s employees are suffering from voluntary extra working hours, which arise from the company’s understaffing. Moreover, using notable examples, the scholars showed that cost-cutting tactics such as barring union formation are intended to protect the company’s exclusive healthcare plan and cover issues relating to gender favoritism in Wal-Mart’s employment structure. Such strategies have helped this company to implement operation approaches that deprive employees of their supposed benefits. The scholars failed to give account on the accruing benefits to the employees that arise from accomplishing Wal-Mart’s daily jobs, such as low priced products and programs set to increase the needy purchasing power parity.
Britt, D. (2010). Impact of globalization in creating sustainable competitive advantage. Web.
Mallaby, S. (2005). Progressive Wal-Mart: Really. Web.
Mars, T. (2004). Wal-Mart legal department diversity. Web.
Olsson, K. (2003). Up against Wal-Mart. Web.
Roberts, B. & Berg, N. (2012). Walmart: Key insights and practical lessons from the world’s largest retailer. London, UK: Kogan Page Publishers.