Contemporary Management Issue

The contemporary management issue which I have selected is about Wal-mart’s ethical and unethical issue. Wal-mart was initially established by Sam Walton in the year of 1962 where his primary branch was located in Rogers, Arkansas. Wal-Mart becomes as world’s largest distributor equipped with UDS 218 billion in sales in 2012. Wal-Mart has virtually consists more than 3,200 stores around US and 1,000 more stores located nationwide. Wal-mart’s first international branch was initiated in Mexico City in the year of 1991. This corporation consists of 2.1 millions of total employee’s which are linked one to another. Wal-mart made a history by generated USD 103,557,000 total net income in January 2010.

The primary fundamental belief of Wal-Mart is by providing a low cost value and discounted based commercialism product at low value to attract customers and provide Wall-Mart with a competitive advantage strategy. Based on this philosophy, Wal-Mart had implemented  methods where “ They will executed a discounted rate of 40 to 60% specially for their customers for branded products, sustain low value operation, import goods from cost effective sources such as India and China, reduce the travelling cost and etc. Below chart will represent the Wal-mart strategies for different level of management (Hayden, et al., 2002). 

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Figure 1.0: Wal-Mart Operation Strategies.

Wal-Mart set its vision where everyone is able to buy and use the branded goods without any fear which concerning to the value. By compete to its vision; Wal-Mart had introduced some business strategies to act with core competence within the industries. But, this tactic turns into dangerous weapon toward Wal-Mart Corporation where Wal-Mart involved with several ethical problems within the past decades. The main problems faced by Wal-mart are failure to accommodate the standards of construction, environmental safety and unfair treatment of workers. Besides that, Wal-Mart’s stakeholder effects describe the customs utilized by Wal-Mart and its results towards their stakeholders which carries along with numerous levels of people such as the workers, suppliers, NGO’s, communities and etc (Chen, 2015).

One of the main strategies which implemented by Wal-Mart Corporation is to maintain and provide low cost goods for their customers at all the time. Yet, this strategy has created ethics problems for workers by provide unfair treatment such as discrimination between males and females workers, low wages, and rejection to implement union labor, underprivileged health benefits and so on.

At the same time, in 2013, Wal-mart has fired employees without giving further notice with the reason of “unexcused based absence” which is not confined under labor law. Wal-Mart admitted that their action which they taken is legal and justifies.  As a result, Wal-mart employees went to the company’s main headquarters and launched a protest against Wal-mart during shareholder meeting takes place. Later, Wal-Mart has taken to the court and the judge order Wal-Mart to pay the compensation fees as a punishment upon discrimination against employees. Furthermore, Wal-Mart was assigned to notify their employees about their privileges when coming to strike and assure not to threaten their employees in any wrong doings (BBC, 2016).  

In addition, Wal-Mart was conjointly involved in court case at Missouri for suspect them from failing to pay overtime compensation for staff who works overtime, refused to pay for operating off the clock, provide insufficient lunch breaks and etc. Wal-Mart has settled a proceedings that suspect them from not failing to give the payment for 69,000 employees in Colorado with USD50 million for works after the working hours.

Moreover, Wal-Mart has put their employees under a pressure when garment sector workers in Bangladesh just paid 11 ½ cents per hour and forced them to produce multiple of jeans in an hours. As a result, Wal-Mart faced the proceedings to provide accurate hourly wages for employees from the National Labor Committee. Wal-Mart also discriminated the female workers and the management giving promotion solely for male employees and unfair wage allocation. This can be supported with case filled by Wal-Mart’s female employees in 2000, when they were paid less and not given any endorsement since they are so called as “Women”. A female employee of Wal-Mart, named as Kwapnowski clarified that, her male employees tends to get more wages and promotion easily and she fails to obtain even thought she is well qualify and experienced (Vaidyanathan, 2011) .

Those terrific turnovers or constant struggles with legal troubles from the courts show that Wal-Mart had a poor management and communication skill within their staff. Wal-Mart conjointly imports product from cheaper sources like China, Bangladesh and India to provide low cost value for their local customers. Though, this strategic has given an impact for American manufactures programs. More than 80% suppliers of Wal-Mart are from China and Wal-Mart conjointly had to scale back price altogether aspects particularly in constructions of stores. Wal-Mart does also pay a sum of 5 million dollar of fines for their poor construction in Texas, Massachusetts, Oklahoma and New Mexico.

Here I’m going to explain about how it could be happened or in what condition does they encourages those ethics to be happened by using a framework models. Based on “Utilitarianism Theory”, Wal-Mart’s mission and vision is taken into account in order to convey real profit to their customer than its staff. The basic philosophy of Wal-Mart is most are ought to be able to purchase branded goods without concerning about the value. The Wal-Mart important mission is “We save individuals money so that they will live better” (Farfan, 2016).

This concept shows that Wal-Mart had taken into issues of public interest and enforced those methods to collaborate with this mission. Wal-Mart does also minimize their operational cost to supply low cost value product for its customers by paying low compensation for Wal-Mart employees, restrict the cost of construction, management, and environment, as well as other contentious plans. These steps had reduce employee’s remuneration like low income, no health care plan , lack of union labor, and, legal proceedings and other issues that weaken Wal-Mart’s status. However, the management said that their key process carry a larger product to their targeted people, therefore other inconsequential disadvantages towards its staff is tolerable.