Week 3 - Case Study Analysis 2-One nation under Wal-Mart
Cherie A. Parker
University of the Potomac
BUS 570 – Business Ethics
April 16, 2015
Professor Larry Barnes
Sam Walton opened his first store in the 1960’s among a small town in Arkansas. As a known supporter of American manufacturers, Sam Walton promoted American business and economic growth. Throughout the years, the company expanded rapidly, and with the passing of Wal-Mart’s original founder the corporation’s ethics declined. The retail chain we all know of today is not the same as it once had been. Wal-Mart went from a local competitor to the monopolized money hungry corporation that is currently spread across the globe. According to research by the United Food and Commercial Workers International Union, there were over “4,300 world-wide Wal-Mart and Sam's Club stores” in the year 2003. A documentary titled “Wal-Mart Nation” also states that “Wal-Mart opens a new store every 1.5 days” (Munger). The corporation also shifted their use of American manufacturers to foreign producers along with company expansion.
“One Nation under Wal-Mart” is a case about how Wal-Mart has hostilely taken over the retail business. The case states that Wal-Mart is able to offer cheaper prices because they put so much pressure on their suppliers to lower their prices. The case also shows statistics of how much percentage Wal-Mart is of many suppliers’ sales. According to the case Wal-Mart has a 30% market share of all household items. 28% of Dial’s business and 24% of Del Monte’s business go through Wal-Mart stores. An amazing statistic of Wal-Mart is that they import 10% of all United States imports from China. “One Nation under Wal-Mart” explains the problems that some people have with the massive retailer. It explains how because Wal-Mart is able to purchase goods at such cheap prices and pass on the savings to its customers, it has forced numerous local businesses to close their doors. The case also states that Wal-Mart is very anti-union and that it pays its workers near minimum wage at an average of $8.23 an hour for sales clerks. Wal-Mart also is very stingy on health benefits for its 1.4 million employees. These statistics are said to be the main reason Wal-Mart has a 44% employee turnover rate per year.
Since Wal-Mart employs so many people and the pay rate is so low, the government has to “pick up the slack” for these people to work. A congressional report states that a two-hundred-employee store costs the government $42,000 a year in housing assistance, $108,000 in children’s health care, and $125,000 in tax credits and deductions for low-income families (Shaw, 2007). The case states that since Wal-Mart is such a huge retailer it can actually influence culture in some areas. Wal-Mart has refused to sell mature rated CD’s and computer games. The company also has removed some magazines from its shelves and put covers on others. Wal-Mart is the only top ten drug chain to refuse to sell Preven, a morning-after pill.
The case states that the biggest barrier to growth for Wal-Mart is not competition from a rival like Target; it is the “opposition at the local level.” The residents of the proposed cities are trying to preserve their local communities, businesses, and local shopping areas. Professor John E. Hoopes of Babson College says that we should take a long-term view at Wal-Mart. He says that there will be another business that has a different business model that will overtake Wal-Mart and end its long reign that Wal-Mart won’t see coming (Shaw, 2007). As Jeffery Useem writes in Fortune magazine, “If you’re a consumer, Wal-Mart is good for you. If you’re a wage-earner, there’s a good chance it’s bad for you. If you’re a Wal-Mart shareholder, you want the company to grow. If you’re a citizen, you probably don’t want it growing in your backyard.” (Shaw, 2007) I Love Wally World
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References: Miller, Matthew, and Duncan Greenberg. “The Richest People in America.” Forbes, retrieved on
March 29, 2015, The 400.
Munger, Andrew, Wal-Mart Nation, retrieved on March 29, 2015, DVD. Title House
Norman, Al. “The Case against Wal-Mart.” retrieved on March 29, 2015, Atlantic City, NY:
Raphel Marketing, 2004: 8.
Shaw, W.H. (2014). Business ethics: A Textbook with cases, (8th Ed.). Boston, MA: Cengage.
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