Wal-Mart Unethical Business Practices - Case Study Example

Name: Course: Institution: Date: Wal-Mart Unethical Business Practices Business ethics is a branch of applied ethics that examine ethical and moral principles that concern the business environment. The role of business ethics is to regulate the actions of businesses and corporations in their day to day activities and operations to ensure that their operations are to the best interest of the society at large [Sha07]. Ethical behaviors often lead to significant growth in organizations due to the protection of the interests of stakeholders in the business. Business ethics and corporate social responsibility go hand in hand and for a business to have ethical practices in place, it must be involved in corporate social responsibility in the society. Unethical behavior or lack of corporate social responsibility hurts the society since their interests are not taken into consideration by businesses and this would in the long term have a detrimental effect on the company’s future and success. In this report, I discuss an unethical business action that I have witnessed, the stakeholders to the action taken, who made the decision about the action, what biases faced the maker of the decision making and what the organization could have done to prevent such an unethical practice from happening. The situation I experienced was that an immediate neighbor to my home. The man, a father of three is known as Phil Jones and had worked at Wal-Mart for the past eleven years and was the principal breadwinner for the family after her wife suffered from a stroke that left her body half paralyzed. Being the chief breadwinner, he had to work for extra hours and most of the days he would do double shifts to fend for his family. Despite Wal-Mart being the number one company in the world according to revenue standing at four hundred and twenty-one billion dollars and despite the business concept that bigger is better, this does not hold in business ethics as Wal-Mart has often been on the receiving end when it comes to its treatment of employees of the years. Its sheer size has raised numerous allegations of poor business ethics. It has been associated with poor treatment of employees, sexual harassments at workplaces, low wages and vehement opposition to the decision by employees to join workers’ unions. The action by Wal-Mart on Phil Jones was that of being denied sick leaves, low wages and delaying his wages by a time lag of two months. He was forced to work when his mental and health condition was not in the best shape. The low wages caused him to depend on food stamps and society welfare systems in order to get by and provide for his family. The delays associated with his wages was so bad to an extent that he had to seek soft loans from friends in order to provide for the family and pay them back when he would get paid. Employees tend to lose motivation when their wages are delayed by the employers [UPA09]. The stakeholders involved in the action were his family, the government, the organization and workers’ unions. It is the duty of Phil to provide for his family and so the family has an interest in him and the actions that Wal-Mart had done that were unethical towards him. It is the duty of every organization to ensure that its employees are compensated sufficiently for the services they provide to the firm, paid in due time and enhance their ability to execute their duties by offering medical plans and covers. Employees are an asset to the firm and so they are also stakeholders. The government is a stakeholder because employees contribute to the revenue of the government through taxes and it’s the responsibility of the government to ensure the well-being of employees through regulations on employers and setting up of unions for workers to guard and protect their interests and well-being. The unions are stakeholders because their formation is normally to the interest of employees and guard against exploitation of employees by their employers. The decisions that affected Phil Jones were made by the human resources manager at the store he had worked for over 10 years in Chicago. The decision to deny him a sick leave when he was suffering from cold condition was by the Human Resource Manager, Mr. Rakitic himself who was the head of the department at the store. The delays associated with the wages and the low rates of pay were because of the company’s poor compensation scheme that was accompanied with a lot of laxity to ensure that employees cannot leave the firm and cannot join trade associations. The decision by the Human Resource Manager Mr. Rakitic to deny Phil a leave when he was sick was because there were no sufficient employees at the store at the time Phil got ill. Wal-Mart has often been associated with treating its employees as products as we see in this case. It was an inhuman business ethic towards the employee. Denying wages or delaying the wages of employees for such a long period is unethical and wrong. The compensation schemes at the store were also responsible for the associated delays in the release of wages for the employees’ services rendered to the company. Wal-Mart could have prevented such a situation from happening long time ago by developing friendly employee compensation schemes and coming to the realization that the success of the firm greatly depends on the inputs of all employees. Such a realization would improve the treatment of employees and would lead to the achievement of great success and benefits to the firm. The contrary happened as in the case of Phil, and he sued the organization for the unethical practices towards its employees. If Phil wins the case, the firm will lose a substantial amount of funds through the lawsuit due to fines and court charges. Prevention of the actions taken on Phil Jones would have been prevented if the human resource managers at all stores were put under strict guidelines to ensure that the welfare of all employees is enhanced and guaranteed through all the employment contracts. It would ensure that employees are given leave from their duties and this would have easily had been avoided. The delay of wages could have been sorted out if the pay structure at Wal-Mart was efficient and wages were being paid as and when they were due. Paying wages when they are due motivates employees to work even harder and this is a benefit to the organization as productivity of employees is increased [Lau05]. Wal-Mart should also have reviewed their compensation packages for employees in order to ensure that employees are paid sufficiently for services rendered. If these actions could have been taken in advance, then Wal-Mart could not have been associated with such unethical practices. REFERENCES Sha07: , (Shaw), UPA09: , (Upadhyay), Lau05: , (Lauby), Read More