Wal-Mart's Inhumane Practices - Assignment Example

The High Costs behind Low Prices As a child coming from a working family, I have always been careful about planning and bargains. My parents have always driven me to countless of places to buy furniture and other day-to-day use items. Of all the shops that my parents went to, they preferred Wal-Mart most. In difficult economic times, Wal-Marts low-priced merchandise saved us lots of money. I can not count how many times we went to Wal-Mart, and in fact most of the time when we went there, we did not really need to buy anything. We went to Wal-Mart often simply because my parents visited Wal-Mart to find great deals and bargains as part of their leisure. Sometimes when I am with them, I find their car to unwittingly be in Wal-Mart’s parking lot, and my parents have always told me numerous times that "Wal-Mart is my favorite store!" With more than 8000 stores throughout the United States and 10 countries, Wal-Mart is not only my friends favorite store; it is also hundreds and thousands of Americans’ favorite place to shop (Fast Company line 15). Why? The reason is very simple: the price Wal-Mart offers is cheaper than other places, which is the main marketing slogan of “Everyday Low Prices”(Fast Company para. 4); and secondly, in any Wal-Mart store you can buy almost anything you can think of. In fact, nearly 20 million consumers shop at Wal-Mart daily (Facts in the Wal-Mart documentary para. 22). Because of the loyalty of consumers, Wal-Mart’s founding family, Walton have a total worth of $70.6 billion, and passed Bill Gates’ $40 billion on the World’s Richest People in 2009 (Forbes Worlds Richest People line. 3). It is difficult to imagine that one retail merchant was able to become the worlds richest family. However, even though the general public and media were amazed at Wal-Marts success, they cannot see the cold-blooded inhumanity in the backstage of their "successful" strategy. Wal-Marts merciless operation was well implemented, and it has led to Wal-Mart’s “success.” After I learned and acknowledged what kind of company Wal-Mart is, I have joined thousands of people avoiding Wal-Mart. People have turned against Wal-Mart and other US-based supply chains such as McDonalds when they gradually realize how globalization has impacted the local culture. Even though this huge corporation has enormous power in the United States, there are many communities that have risen up and prevented Wal-Mart from invading their homeland. Recently, a documentary was produced: Wal-Mart: The High Cost of Low Price. It reported in detail Wal-Mart’s inhumane and unfair business model (Wal-Mart: The High Cost of Low Price).Wal-Mart is harmful to our society. The reason behind it is Wal-Mart’s low product price for the customers comes at the expense of their employee’s salary and health benefits, importing goods form low labor cost manufactures that treated their workers inhumanely, and ultimately forced other local shops to get out of competition and shut down their businesses. As one of the worlds largest companies, Wal-Mart has up to 16 million employees in the United States and around the world (Walmartstores.com: About Us para. 3). When we look from the surface, we see that Wal-Mart has created many job opportunities. But the fact is that even in the United States, Wal-Mart employees who are sacrificing their labor, get meager salaries in return. Also, Wal-Mart’s health care plan only covers about 50.2% of their employees. This is because even the least expensive family coverage plan offered by Wal-Mart is over 20% of their income (EBRI Issue Brief October 2007, para 5). This is one of Wal-Mart’s strategies to lower personnel costs and depress commodity prices. First of all, basic workers had to buy the Wal-Marts health insurance from their own pocket and most of the base level employees are at the bottom of society and the low skilled worker lives paycheck by paycheck. Therefore, they cannot afford the burden of health insurance and have to apply for the government’s insurance for low-income households which are supported by taxpayers. This way, Wal-Mart smartly transferred the load of expenses of their employee health insurance to the government and to the taxpayers. Therefore, customers who were seeking bargains while shopping at Wal-Mart and the money that the customers saved went right back to Wal-Mart operators pocket. In addition to lowering labor costs, Wal-Mart tries to hire the smallest staff possible to do the most work. Employees are forced to work overtime without overtime pay, and if unwilling to cooperate, they are threatened with the risk of facing expulsion. Barbara Ehrenreich, the author of Nickel and Dimed, learned from first hand working experience at one of the Wal-Mart stores that workers do not get paid working overtime and those who refused to work for unpaid overtime will be threatened with write-ups and possible termination (Ehrenreich 183). Employees who are less skilled go without many choices on the job market and can only with such an unfair policy. At the same time, Wal-Mart also does not allow employees to form unions to back up their fight for their rights (Sekinger para 7). If one has the intention of the forming or joining a union, he/she will be treated like White Terror (Wake-Up Wal-Mart, Wal-Mart Anti-Union Policy para. 2). Therefore, there have been difficulties in having interviews with staff because no one wants to say "the wrong thing" and lose their job (Wal-Mart: The High Cost of Low Price). This has created a feeling that workers just come to work to get their paychecks, instead of enjoying their work and perhaps try to work hard to benefit the company and society. Another key reason Wal-Mart’s product prices are lower than other market players is because it takes every possible measure to reduce its labor costs. In this respect, Wal-Mart and the other Western companies use cheap labor in developing countries to improve the competitiveness of their products. In Bangladesh, Honduras, and many other third-world countries, Wal-Mart factory workers have being treated inhumanely. They have to work seven days, 14 hours everyday, in poor working conditions with hourly wages of a quarter of a dollar (Bernstein para. 6). Wal-Mart has created an exploitation model by using workers in developing countries. Therefore in order to compete with Wal-Mart, other Western manufacturers who opened factories in third world countries have been forced to drive down the wages of workers as well. The idea of keeping the costs down by hiring cheap labor and keeping a pocket full of cash of themselves is against business ethics. This will not only generate more hatred among the workers but will also make the multi-national corporations look bad themselves. It is sad that only a few people know how inhuman those multi-national corporations are. It is true that these worldwide corporations created employment opportunities in developing countries. However, they do not treat their workers the same as they would in developed countries like the Unites States. In the documentary, several Wal-Mart factory workers in China faced the camera with their humble hope: "When you shop the low cost products in Wal-Mart, please think about us on the other side of the world, we are working night in and out!" (Wal-Mart: The High Cost of Low Price).When people are satisfied with their bargains bought in Wal-Mart like 10 dollar polo shirts, that polo shirt was made by a minor girl in Bangladesh who was denied permission to visit the toilet and forced to work in an unventilated, crowded factory with a risk of losing her eyesight to sew the polo shirt thread by thread (Mattera, para. 16). Some people might argue that Wal-Mart brought them convenience because Wal-Mart has basically all of the items ranging from toilet papers to general groceries at a very competitive price. Especially with our busy lifestyles, people prefer the “One Stop Shopping” that Wal-Mart provides instead of comparing different advertisements from different grocery stores and driving around the town for their everyday items. However, people generally do not see the negative effects of Wal-Mart’s activities on some people’s lives. Whenever there is a local emergence of Wal-Mart, the towns grocery stores, hardware stores, tire shops, and garden shops are unable to compete and are forced to close down. In many of the small cities and towns in the United States where these small shops helped provide necessities and create employment, things are no longer the same. Wal-Mart’s presence has caused job losses and sometimes humiliation to the locals that have their roots deep in the city. When Wal-Mart opened their Supercenter in Chicago in 2002, it caused over 200 local shops to close down. People often see the sign hanging in front of shops that simply said “Closed, Go to Wal-Mart”. (Wake Up Wal-Mart, para 3). Other impacts that Wal-Mart has brought include damage to the environment. When a Wal-Mart superstore opens, it requires a big space: a single large-scale warehouse buildings construction, which is also called Big Box Development, as well as the large asphalt parking lot (Big Box Retail, line. 15). These factors have brought unquestioned negative impacts to our environment. More space is being taken by the businesses, and less space is available for parks and libraries for the citizens that live in that area. Spending less on everyday items is understandable. However, we should know that there are unimaginable high costs behind low prices of Wal-Mart which is merely based on profit maximization and disregard of business ethics. In addition to the price of the label, there are also countless employees being exploited, the destruction of numerous local business culture, as well as irreparable damage to the environment. These costs will be later billed to our next generation, while the pockets filled with cash and full of business success stories are still being regarded as the "Legends" and are seen as learning models. In the United States, in addition to more and more people are beginning to resist the unscrupulous companies, gradually people are willing to come forward to expose the ugly appearance of these enterprises. In addition to "Wal-Mart: The High Cost of Low Price", there are also the other reports and documentaries that uncover what the general public detect easily. For example, a while ago a popular documentary called "Supersize Me”, which recorded that behinds the McDonalds fast food are numerous health threats (Supersize Me). A similar documentary "The Corporation" also analyzed many large companies and their business ethics and stated the same fact. The Corporation notes that “I hope that one day, there are more people that are willing to stand out and speak the truth about what the business’s success have caused many sacrifices in our society”. Wal-Mart’s inhumane practices have generated lots of criticism from labor unions, grass root organizations, environmental organizations and community groups. The company policies and business practices have been to the detriment of the employees and to the benefit to the proprietor and Wal-Mart’s customers (pbs.org par. 3). The company has been criticized not only on the way it handles the employees but also on other areas including foreign product sourcing, environment practices, company’s security policies and treatment of product suppliers. Despite this Wal-Mart’s management has consistently argued that their performance is dependent on efficiency in production. This efficiency leads the company to selling their products at low prices. In the year 2005, labor unions created more organizations and websites aimed at influencing public opinion against Wal-Mart, wake up Wal-Mart and Wal-Mart watch inclusive. However, to counter this, Wal-Mart management launched working families for Wal-Mart. Additional efforts such as public relations campaign though public relations website was launched aimed at countering the negative effects of anti- Wal-Mart campaign (walmartstores.com par 1). However the funds used in all these activities was as a result of exploitation of the workers and through use of unethical business practices. However, despite all this Wal-Mart has listened to the cry of the common man. For a long time, the common man has been exploited through exorbitant prices of goods and services (Coates & Morrison p. 307). The major supermarket and hypermarkets chains have always sold their goods at high prices far to the reach of the consumers. Most of the low and middle income earners have always found hardships in meeting their household needs. With realization of this Wal-Mart came in and promised to provide cheap services to the consumers. Also consumers faced challenges of shopping from one shop or business premise to the other. They needed a one stop shopping premise where all their needs would be met. Wal-Mart has since the beginning proved to be a one stop shopping premises with most varieties of goods and services (Birchard & Marquard p.255). The consumers have always left the premises happy and satisfied with the services provided. However, this doesn’t give Wal-Mart the warrant to exploit its workers and employees or use unethical practices to meet the consumers’ needs. The company enjoys a lot of profit that has propelled its proprietor to be the richest man in the world. This shows that the company is capable of meeting the much needed high wages by the employees. In conclusion, businesses should always aim at practicing good business ethics. Despite the strong urge that businessmen have in meeting the consumer needs, it is necessary to always take into consideration the employees’ welfare. Wal-Mart’s management closely monitors the store’s phone calls and emails. In the book The case against Wal-Mart authored by Al Norman, former Wal-Mart store manager clearly informs the public that Wal-Mart has a 60*60 room space packed with dozens of people with headsets conducting surveillance on all calls and emails from Wal-Mart stores to ensure that no one is talking about union organizing. This is not right and the management should desist from such behavior. Such practices are inhumane and contrary to human rights. For there to be productivity among the workers and increased productivity they have to be motivated. Companies should engage in performance management practices beneficial to both the employees and the company. The employees should not be held hostage at the work place as this will lead to high turn over especially from the formal workers who are highly learned. Works Cited Sekinger Aleksandra (2010) Walmart - The High Cost of Low Prices. Viewed 23rd July, 2010 http://socio-political-documentaries.suite101.com/article.cfm/walmart_the_high_cost_of_low_prices pbs.org (2004), one, two, three, four… we don’t want your superstore viewed on 22nd July 2010 from http://www.pbs.org/wgbh/pages/frontline/shows/walmart/transform/protest.html Walmartstores.com (2010), The Walmart Foundation viewed on 23rd July 2010 from http://walmartstores.com/communitygiving/203.aspx Birchard B., Marquard W. H. (2007), Wal-smart: What it really takes to profit in a Wal-mart world (illustrated), New York, McGraw-Hill Professional pg 255. Coates K., Morrison W. R. (2005), Land of the midnight sun: a history of the Yukon (2nd edition, illustrated), Kingston, McGill-Queens Press – MQUP, pg 307. Read More