Wal-Mart is the Low-Price Leader - Research Paper Example

Wal-Mart is the Low-Price Leader, but at What Costs? Table of Contents Introduction 2 Assessment 3 Literature Review 5 References 7 Wal-Mart is the Low-Price Leader, but at What Costs? Introduction Wal-Mart has made a name for itself in the retail industry as having the lowest-priced inventory available to its customers; many locations are even open 24 hours per day (Wal-Mart Stores, Inc., 2011). For many low-income families in America, Wal-Mart affords them the opportunity to live a less restrictive lifestyle, allowing them to spread their hard-earned dollar a little further than they can with competing retailers (MSNBC, 2005). As for employees, the job market in the United States has been turned upside down in the last couple of years, as a major result of the economic turmoil facing the country (Bureau of Labor Statistics, 2011). According to the Bureau of Labor Statistics (2011), the average unemployment rate across the United States remained steady for February and March 2011 at an estimated 8.8%. Thus, while working for a company like Wal-Mart may not be ideal, it may be one of the few forms of employment that many Americans are able to secure under the current economic circumstances facing the country today (Glasmeier, 2006). Unfortunately, the retailer is taking obvious advantage of the desperation of customers and employees. In remaining a major force in the retail industry, gaining power through the economic crisis on multiple levels, the actual costs behind its low prices are definitely not a part of the organization’s publicized marketing strategy (MSNBC, 2005). However, there has been a great deal of research presenting information suggesting the low prices come at very high costs, not only to the employees, but by extension the customers, through poor customer service and an overall negative shopping experience (Glasmeier, 2006). Unless changes are made to the way employees are treated, and protections are allowed—even if they do not come in the form of unions—these employees will only continue to grow more and more disgruntled to the point where customers are turned off by the overall experience and even those who may not be able to afford it, will go elsewhere. These customers do not need to be made to feel badly about their shopping experience, Wal-Mart has an opportunity that they are failing to realize. At this point, they have a massive market share, which will most likely return to what it was prior to the 2008 economic collapse, in the next couple of years when the economy bounces back from its brief devastation; based on historical data (Microsoft, 2011). However, without implementing a training program that drives customer loyalty through employee satisfaction, Wal-Mart has the potential to lose their significant gain, to competitors like Target, when unemployment rates are down and the economy is booming once again (Microsoft, 2011). Thus, this paper will examine the many reports of federal law violations and unacceptable human rights standards to which the big-box retailer has become accustomed in its time of economic prosper and impermanent power. According to Cram (2005), “In 2002, 43 distinct charges were filed against Wal-Mart for violations of the National Labor Relations Act and since 1995, 60 complaints have been filed against Wal-Mart with the National Labor Relations Board.” In response to these charges, this paper will also recommend implementation of a training project that will ultimately help to improve the image of Wal-Mart in the eyes of its most important assets, its human resources. Assessment The number of employee complaints and lawsuits against Wal-Mart for its poor, and in some cases illegal, employment and employee relations practices that have been steadily rising throughout the past decade, makes this problem worthy of addressing; particularly at the local level where managers have direct contact with the first-level employees (Cram, 2005). After all, these are the employees who are dealing one-on-one with the customers on a daily basis. It is notable to mention that even customers, over the last couple of years, have started to complain about the appearance of the store and interaction with employees (MSNBC, 2005). For this reason, the training project is even more of a critical need for the organization. Furthermore, though the organization has reported recent efforts to change its practices, with a top-down approach, it has continued to not only receive a growing number of employee complaints, but also pay out millions of dollars to settle lawsuits. Such lawsuits have been filed as a result of its illegal and wrong employment practices. However, other major retailers, like Target have continued to show a steeper increase in sales and a greater number of positive reports of employee satisfaction, in recent years over Wal-Mart (MSNBC, 2005). In fact, in 2001, the average hourly Wal-Mart employee was scheduled no more than 32 hours, which in most states represents part-time status. Thus, they were not eligible for health care benefits, and the annual wages totaled approximately $1000 less than the poverty level of $14,630 for a family of three (Cram, 2005). Under these circumstances, the organization is breeding an environment of employees who are only working to collect a paycheck. The goal of the training program will be to change this management perspective. Empowering employees to lead and develop fosters growth and increased employee morale within any organization. Soliciting employee feedback and allowing autonomy within the company are two major aspects of the training program, which will drive employee commitment (National Federation of Independent Business, 2011). Moreover, these are things that have lacked within the Wal-Mart workforce for several years. In making this change, employees will no longer be at work for the money, but because they actually care about the success of the business; because ultimately, they recognize the business cares about their success (Cram, 2005). Literature Review In reviewing potential research for this paper, it was difficult to find materials defending Wal-Mart and its employment practices. However, there is some available, which will be used to help address both sides of the argument that Wal-Mart is not a compassionate employer, is unfair to its employees, and does not abide by various employment legislation that has been passed throughout history, particularly human and worker rights afforded to workers under the NLRA. According to the National Labor Relations Board (NLRB), Employees covered by the NLRA are guaranteed the right to form, join, decertify, or assist a labor organization, to work together to improve terms and conditions of employment, and to bargain collectively through representatives of their own choosing, or to refrain from such activities.” (2011) However, much of the research available in the form of secondary sources accurately and credibly documents Wal-Mart’s consistent obstruction to allowing employees to unionize or even improve their working conditions without a union. Such obstruction to be explored throughout this paper includes “a ‘toolbox for remaining union-free’ that includes lists of warning signs that employees may be organizing and a hotline number to summon a corporate anti-union SWAT team” (Cram, 2005). Furthermore, a majority of the literature reviewed for this paper is derived from secondary sources including, court cases, company policies, secondhand employee interviews, statistical data, scholarly journal articles, employee complaints on various online forums, and other credible Internet sources. Employees ultimately want to feel as though they are part of a “family” in the workplace. Often times, employees spend more time at work than they do in their own homes. It should not be too much to ask for an employer to show empathy to its employees, and show them, rather than tell them, that they are more than just a means to generating revenue and taking over the world one community at a time (National Federation of Independent Business, 2011; Cram, 2005). One court case of particular interest is a major class action lawsuit against Wal-Mart for failing to promote women within the hierarchical ranks of the organization. While more than two-thirds of the hourly employees are reported to be women, less than one-third of management consists of female employees. Thus, six women in California started the lawsuit that, as of April 1, 2011, included more than 8,000 signatures of women who have joined in the fight for equal rights and fair treatment within the company (Walmart Watch, 2011). Thus, this training project will focus on changing the behavior and action of members of management at the store level. Specific types of complaints to be addressed in the training will be explored more thoroughly throughout the paper; however, they range from wrongful terminations to consistently failing to meet safety regulations. A major focus of the project will be on reducing violations of employee rights afforded to them under the National Labor Relations Act (NLRA), such as the right to organize labor unions, as a means of protecting themselves from the company’s unfair employment practices (Cram, 2005). References Bureau of Labor Statistics. (2011). Economic News Release. Retrieved from http://www.bls.gov/news.release/empsit.nr0.htm Cram, J. (2005). Ten things Wal-Mart doesn't want you to know. Campus Progress. Retrieved from http://www.campusprogress.org/articles/ten_things_wal-mart_doesnt_want_you_to_know Glasmeier, A. K. (2006). Inequality continues to grow in America. Poverty in America. Retrieved from http://povertyinamerica.mit.edu/ Microsoft. (2011). U.S. News and World Report. Retrieved from http://articles.moneycentral.msn.com/News/5-reasons-the-economy-might-recover-faster-than-you-think.aspx MSNBC. (2005). Wal-Mart struggles with deeper problems. Retrieved from http://www.msnbc.msn.com/id/7901047/ns/business-us_business/  National Federation of Independent Business. (2011). Empowering employees. Retrieved from http://www.nfib.com/business-resources/business-resources-item?cmsid=35372 National Labor Relations Board. (2011). Employee rights. Retrieved from http://www.nlrb.gov/rights-we-protect/employee-rights Wal-Mart Stores, Inc.. (2011). Store finder. Retrieved from http://www.walmart.com/storeLocator Walmart Watch. (2011). The week in Walmart news--Walmart in court around the world. Retrieved from http://walmartwatch.org/blog/archives/04-01-11-walmart-news/ Read More