Walmart's Corporate Social Responsibility - Why Walmart Is Not Ethical nor Sustainable

Walmart and Corporate Social Responsibility

Why Walmart is not Ethical nor Sustainable

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Yousef Khaled

370

BBUS Business and Society

Table of contents

Walmart Company Culture:                                                                3

Cost Control Strategies Used by Walmart:                                                4

Non-ethical treatment of employees                                                        5

Unsustainable Walmart practices                                                        6

Methods of innovative advancement                                                        7

References                                                                                         9

The goal of this report is to provide an overview of the areas in which Walmart is not advancing in corporate social responsibility. I will also discuss ways in which Walmart can become more ethical and sustainable, while still maintaining profit and consumer demand.

Walmart Company Culture:

When asked to name successful companies, most Americans would mention Walmart. There is no doubt that Walmart is a well-known retail company that has successfully conveyed images of cost-friendliness and efficiency into the consumers’ mind. According to latest surveys, since its establishment in 1962, Walmart is one of the largest growing grocery chains in the United States. With almost over 15 percent of the entire grocery sales. Their sales are nearly twice as big as their competitors (for example, Kroger), with Walmart making an impressive 95 billion per year while Kroger makes 51 billion. However, at what costs? Does Walmart’s low prices entail a gap in their ethical and sustainable practices? Over the years, more people (employees, customers, and supplies) have spoken out against Walmart’s unethical treatment and lack of social responsibility.

There is no doubt that Walmart has questionable relationships with their employees, as the establishment has been profiting on the heads of cheap labor. Many cases have been reported by Ex-Walmart employees in which they were treated unfairly. That is also another reason why this establishment has been facing multiple lawsuits from massive amounts of people varying from employees who used to work at Walmart to regular customers with supporting ground to help them win the lawsuit. Another important part of Walmart’s company culture is its zero tolerance policy towards labor union activism. In one of the most relevant situations of that case is when walmart employees went through the closing of five recent stores due to union activity. When Walmart became aware of the formation of an employee union, they responded by punishing them rather than listening to their concerns. Walmart would rather close their stores, than simply open doors to better employee living standards. This case solidifies Walmart’s approach towards their employees, they would rather turn a blind eye to their needs, rather than offer them fair compensation for their labor.

To gain a better understanding of Walmart’s practices, their values must be examined. To illustrate the importance of company values, Google’s value of creativity has lead them to receive praise for having 40% more productive employees. Contrastingly, Walmart values nothing more than to generate the highest level of revenue using any means necessary, including mistreatment of employees, eventually resulting towards multiple cases of employee dissatisfaction, which then leads to lower productivity at work.

Cost Control Strategies Used By Walmart:

Walmart did not grow so rapidly and attain such low costs simply by coincidence. They applied various strategies to make this happen, and most of these strategies have detrimental effects on the stakeholders of the company. One strategy used is the aggregation effect strategy, which is a common method used by many large companies such as Toys R Us and Home Depot. Basically, it is a strategy used to benefit off economies of scale, where the company tries to sell as many various products and brands as possible. This helps Walmart’s revenue to exceed their costs. Put simply, Walmart is able to sell more, while costing less. That is how they are able to maintain low costs for their products, while still receiving billions annually.

Non-Ethical Treatment of Employees:

In addition to Walmart’s cost control monopoly of suppliers, they also take advantage of their employees in a similar way. Many believe that Walmart treats its employees like a cost to be cut, rather than an important asset to the company. The Food Chain Workers Alliance claims that Walmart is unlawfully involved with other establishments in the systematic humiliation of immigrant workers abroad and at home. Furthermore Walmart’s massive profitable market in trading farm raised shrimp directly relates to illegal use of labor abroad, who are treated like slaves and work for the minimalist of wages. This also affects the company culture, as employees do not feel comfortable or even safe while at or away from work. This not only harms Walmart employees productivity, but is also a determinantal form of psychological abuse that many have no choice but to endure for the sake of their families. Although Walmart has avoided many of these allegations, this is one that cannot be avoided. It is estimated that about 12% of Walmart employees are illegal immigrants that are being forced to work for little to nothing. This is harmful to society, as it increases the number of people who live under the poverty line, while decreasing the government’s awareness of these populations. Without understanding how large this problem is, the government cannot help. This becomes even more tricky when considering the situation of these illegal immigrant employees. They cannot step forward to notify the government because they fear deportation, and even if they were allowed to stay, they do not have the right to press charges against Walmart. This creates a cycle of abuse, where everyone is paying the price (employees, society, government.) except for Walmart, whom is making billions in profit instead.

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