Wal-Mart Controversy

Wal-Mart is the world’s largest retailer, but controversy surrounds their operating practices (Ferrell, Fraedrich, & Ferrell, 2013). The company known for significant sales profits, a large employee base, and the everyday low price provided to consumers is clouded by the pressure applied to suppliers requiring continuous reduction in pricing (Smith & Young, 2004). The small startup company that has grown to a multitude of stores across several countries does have some positive impact, but is it overshadowed by debatable ethical choices.
Sam Walton was the founder of what is now known as Wal-Mart. The small beginnings were in the mid 40’s when he purchased a local store in Newport, Arkansas; and later another with his brother in Missouri (Ferrell,
In order to maintain the motto, the suppliers are forced to provide a product at as low a price as possible for retail. As many have recognized, the continual push to lower cost of goods annually attributes to forcing labor in foreign countries that in turn negatively affects American jobs (Smith & Young, 2004). If a supplier is unwilling to meet the reduction, Wal-Mart will find a supplier that is and drop the existing product (Ferrell, Fraedrich, & Ferrell, 2013). Wal-Mart also emphasis the importance of utilizing technology in production to aid in reducing cost. The use of radio-frequency identification (RFID) affords the supplier a tracking mechanism from shipment through sale at a Wal-Mart location (Ferrell, Fraedrich, & Ferrell, 2004). This technology provides insight into sales and reduces shipping delay as both companies are aware of product movement and can accommodate future need. However, the majority of the cost lies on the supplier, but they are forced into use by Wal-Mart. There have been companies discontinue supplying Wal-Mart with products based on cost reduction tactics, some have continued success while others have folded. There are also ethical challenges faced by the retail