Principles of Management
Individual Research Project Part VI
Wal-Mart, is one of the biggest well know companies in the United States and in the world since 1962 when founder Sam Walton created Wal-Mart. It has been the place where a lot of people usually do their shopping for the low prices and variety of products. This is why it is so controversial Wal-Mart continues to grow even with the accusations of unethical business practices. Wal-Mart has been accused of sexual discrimination and unfair pay for employees, and destruction of small towns, excessive amounts of corporate power through the government and how Wal-Mart is turning into a monopoly. With all of these allegations, Wal-Mart is still one of the leading discount retailers in the country, and as a corporate office, they still stand tall and state that they follow fair ethical values. Walton was an entrepreneur with a vision that started his own company and made into the leader of discount retailing like it is today. Walton borrowed some money from his father-in-law and opened a variety store after serving as an Army captain in World War II. A chain of drugstores followed, Walton went into business with his brother and by 1960 the Walton’s' had 15 stores that were taking in $1.4 million a year. However, Walton soon saw a new competitor arise, which was the discount store. The Walton brothers opened their first Wal-Mart in 1962 in Rogers, Arkansas. Specializing in name brands at low prices, the chain of Wal-Mart stores sprang across rural America. Walton's management style was popular with employees and helped to spur growth. As the years past, the chain of stores grew sporadically. The sales grew to $26 billion by 1989. (Store Wars, www.pbs.org) However, as sales grew ethical standards lowered throughout the company. Wal-Mart’s poor labor practice consists of avoiding non-unionizing of all employees, low wages, expensive benefit packages, and sexual discrimination. They insist on keeping full time employees to minimum to avoid handing out benefit packages and yet they are making employees work full time hours. There is dozens of wage and hour suits against Wal-Mart accusing the company and its managers of various illegal practices. Those included forcing employees to work unpaid off the clock, erasing hours from time cards, and preventing workers from taking lunch and other breaks that were promised by the company or guaranteed by the state laws. In 2008 Wal-Mart announced that they have agreed to pay between $352 million and $640 million to settle 63 wage and hour lawsuits filed against the retailer in 42 different states. The lawsuits accused the company of cheating hourly workers by forcing them to work through breaks and not paying them for overtime. (Wal-Mart to Settle Suits over Pay, NYTimes.com.) Full-time employees are eligible for benefits, but the health insurance package is so expensive employees pay 35 percent which is almost double the national average. (Store Wars, pbs.org) Wal-Mart is also the leading employer of diversity and different cultures in the United States and the majority of this is men. More than 125,000 African Americans and more than 74,000 Latinos work at Wal-Mart nationwide. Two Latinos sit on the board of directors along with two women out of 15 board members. Only one woman serves as an executive officer of the company. Almost 2,000 women in 48 states claim that Wal-Mart discriminated against them for pay and promotions. The filings state women who say Wal-Mart systematically favors men for raises and promotions. (Wal-Mart Sex Discrimination Claims Filed by 2,000 Women, huffingtonpost.com) Wal-Mart’s London Kentucky Distribution Center denied jobs to female applicants from 1998 through February 2005. During that time, Wal-Mart regularly hired male entry level applicants for the warehouse positions, but excluded female applicants who were equally or better qualified. Wal-Mart regularly used gender...