Diversity Management at Walmart Stores - Case Study Example

Case study Report: Diversity Management at Walmart Stores Diversity Management at Walmart Stores Introduction Cultural diversity is when the difference in race, ethnicity, language, religion, and sexual orientation are represented within a community (Amedo, 2013) with the increase of globalization, there has been an increase in free movement of labor and hence more mix in the workplaces with either gender mix, racial mix or ethnic and different age mixes. However, different people have different ways of thinking and thus can analyze a matter at hand from different angles (Martin, 2014). This variation in experiences is beneficial to the organization as it provide a diverse base of knowledge to the organization. Secondly, as the business expands the temptation to explore foreign markets become inevitable. At this point, diversity will help to overcome the language barrier if some of the employees of that organization happen to be native of the foreign country. This gives the company an upper hand in capturing the available market (Martin, 2014). Thirdly, a diverse workforce either by gender, race, ethnicity and or age makes it easy for a company to be accepted by any community and to be associated with easily by stakeholders, this factor may be used by a company to expand the base of its customers or suppliers and to increase the chances of being accepted universally. It is for these reasons that this case study singled out Wal-Mart for investigation with regards to how it manages diversity in its stores. This was motivated by the many law suits that the company had attracted allegedly for discrimination or related issues. The research was also to investigate how its stated policies, mission and value statements as well as the company tag line reflects what the known principles and practices on diversity is. Methods and the target population The study heavily relied on primary sources as well as written materials on the same subject and also those previous reports on specifically, Walmart. The company website also provided the needed insight on writing the profile of the company and some relevant reports. However, the identities of employees who participated in the interview will be kept unknown for fear of reprisal. The study looked into the management composition, employees, and also interviewed stakeholders in general to ascertain their perspectives on the aforesaid company. The study also covered the public image of the company, the company culture, how the company manages diversity and the overall effect of corporate culture, programs and policies on the company, employees and overall stakeholders. Overview of Walmart Walmart is an American store that was founded way back in 1962 by Sam Walton with its headquarter in Bentonville Arkansas. The company operates a chain of discount department store and warehouse store. It operates under the name of Walmart in US and Puerto Rico and as Asda in UK, Seiyu in Japan Walmart de Mexico in Mexico and as Best price in India (Walmart, 2010). Currently it serves in 11,462 locations worldwide. It was incorporated in October 1969 (Fran, 2010). According to fortune global 500 list, it was the world’s largest company by revenue in 2014 and the biggest private employer having employee of around 2 million worldwide. The company is currently trading with the slogan of “Save money, live better’’ which replaced the former “Always Low Prices, Always’’ in September 2007. Walmart’s operations is organized into three divisions; Sam’s club, Walmart international and Walmart US, and offers nine retail formats: Supercenters, food and drugs, general merchandise stores, bodegas(small market), cash and carry stores, membership warehouse clubs, apparel stores, soft discount stores and restaurants (Walmart, 2010). Its mission is to save people money so they can live better. Among its core values are; i. Respect for individuals whether employee, customer, supplier or member of the community at large regardless of ethnicity, gender or sexual preference. ii. Secondly, Service to customers surpasses their expectations, and iii. Finally, striving for excellence, always innovating in the selection and promotion of products and services. The company boasts of huge revenues per year. Findings After the above indicated groups were interviewed and several reports considered for reading, it was evident that many employees were talking about the serious labor related issues and the tendency of the company to deny them the right to unionize. It was also realized that the company has a diverse customer base with its suppliers and customers coming from different groups. Suppliers though complained from the rigid requirements the company dictated on them like having to be within low price range lest your products are pulled from the shelves. Another case was on how the company refused to stock any DVDs that were marked “parental guidance” on their shelves except in the stores in Canada. Competitors were also not left behind in complains. They complained that the company was basically operating as a monopoly by selling at unfeasibly low prices. Other issues which came up included the following; Corruption It emerged that the organization has been riddled with so many court cases alleging discrimination or other factors that may be going against what the company states in its core values. In April, 2012, the company was faced with a corruption case that was reported by New York Times and that involved a former executive of Walmart de Mexico. The corruption allegation was that the company in 2005 September, the company paid bribes via local fixers to locals throughout Mexico in exchange for construction permits, information, and other favors which gave Walmart a substantial advantage over competitors (Barstow, 2012). This, without exaggerating, goes against the policy of the company considering that it was found that the company executives in US “hushed up” the allegation. After the initial report was released, Walmart released a statement a statement denying the allegation and describing its anticorruption policy (McKinley & James, 2004). Labor related cases With workforce totaling to over 2 million worldwide, the company has experienced so many court cases with work related issues especially with regards to its employees. The cases revolved around low wages, poor working conditions, inadequate health care, discrimination, as well as issues involving the companys strong anti-union policies. In November 2013, the National Labor Relations Board (NLRB) alleged that Walmart had pressured employees not to engage in strikes on Black Friday, and illegally punished workers who contravened their direction (Alana, 2013). This revelation was coming after 2005 criticism from religious groups, community groups, grass root organizations, environmental groups and even the companies’ customers. Major concerns included the company policies, business practices including charges of racial discrimination and gender (Marcus, 2006; Sellers, 2005). High turnover rate Even though so many factors can contribute to turnover rate of a company being high, Critics point to Walmarts high turnover rate as evidence of an unhappy workforce. According to an article written in PBS website, on store wars, it is quite clear that a proximately 70% of its employees leave within the first year (Norman, 2005). The associates who were interviewed expressed their desire to quit should they find the next available job opening. They expressed short focus, due to poor culture, their declining morale and better offers from the competing companies in terms of health insurance and pay. Gender discrimination cases One such case was the December 23rd 2007 controversial gender discrimination lawsuit, Dukes versus Walmart stores Inc. which was filed against Walmart. The case alleged that female employees were discriminated against in matters regarding pay and promotions. According to the consultants hired by the plaintiff, in 2001, Walmart’s EEOC filings showed that female employees made up 65% of the stores’ hourly paid workforce, however, only a paltry 33% were in the management while 57%were at comparable retailers (Zellner, 2003).A class action suit was obtained and covered 1.5 million former and current employees of the store. The case went through 3 courts with plaintiffs winning until Walmart took it to the supreme court of US. It is at this point that the supreme court ruled in favor of Walmart saying the plaintiff did not have enough in common to constitute a class (Fisher, 2011). Both employees and the management during the interview acknowledged that the top management of the company was still dominated by males. Wage and welfare related issues Walmart has also faced accusations involving poor working conditions for its employees. Typical example is the 2005 class action lawsuit case in Missouri which asserted that about 160,000-200,000 people who were forced to work off the clock, were denied overtime pay or were not allowed to take lunch or rest breaks (Writer, Walmart to face employee suit in Missouri, 2005). Walmart has since paid to settle the class action suits in Colorado, Pennsylvania, Oregon and Minesota (Writer, Walmart hit with $78 million fine, 2006) . Apart from these mentioned cases, Walmart also faced a walk out protest by employees at a Walmart super center in Hialeah Gardens in Florida who were protesting the new store policy to cut full time hours, a new attendance policy, pay caps that the company imposed in August compelling workers to be available to work any shift and that shifts be assigned by computers and not the line mangers. Many other cases had been raised against Walmart ranging from discrimination, corruption, health insurance policies, wrongful termination of employment, monopoly practices with outsourcing of materials and supplies from China, environmental problems with every new construction of branches (Paul, Yue, & Hayagreeva, 2010) as well as his hiring policies. This begs the question of whether the store acts in line with its stated core values or even mission statement. Management Response When the response of the store was sought, the management responded to clarify every issue and take away the blame from them citing their written culture on diversity and the court cases that ruled in favor of them. In contrast, the company in addressing the question of the discrimination lawsuit, cited the 2007 National Association of women report which named them one of the top 35 companies for executive women (National Association of Females,, 2007), this came after also quoting the Supreme Court judgment that favored them. Discussion Even though the company has received controversial media coverage, it may be right to also consider the cases under question with impartiality. Looking at the company’s rating on the Human rights Campaign’s corporate equality index, a measure of how companies treat LGBT employees and customers, it is cited to have improved from a low of 14% in 2002 to a high of 65% in 2006. The company was praised for expanding its antidiscrimination policy protecting gay and lesbian employees (Sarah, 2003). This is in line with its core value. In fact, in January 2006, the company announced that “diversity efforts include new groups of minority, females and gay employees that meet at Walmart headquarters Bentonville to advise the company on marketing and internal promotions. There are seven business resource groups: women, African American, Hispanics, and Asians, gays, lesbians and disabled groups” (Carlisle, 2006). The company is even stated to be the biggest private employer of in US and employs more African Americans than any other employer (Hiroko & Barbaro, 2015). Basically the company seem to have answers to every allegation that is put against them. According to 2012, Walmart workforce diversity report “accelerating Walmart’s commitment to diversity and inclusion’’, Sharon Orlopp the global chief diversity officer states that “Walmart believes in open communication about their diversity aspirations and understands diversity represents more than numbers and data”. “For us, diversity and inclusion is about engaging the unique strengths of each and every associate of the Walmart community. Walmart first publicly released our comprehensive EEO-1 data in 2005 as a way to measure the progress we are making in transparent way’’ (Sharon Orlopp, 2012). The research also found that “about 57% percent of the US workforce are women compared to 48.3% in retail industry, 26% of US officers are women. People of color associates increased by 25,660(5% increase)” (Sharon Orlopp, 2012)The paper further reports that 38% of the company’s executive promotions were women, 34%of officer promotions women, 22% were people of color. For corporate officers, 27% were women and 20%were people of color. 77% of the store’s and club operations management started as hourly associates (Sharon Orlopp, 2012). It is therefore not fair to give a blanket condemnation of the chain store without regard to what the company does to the community up to including US economy as a whole. Besides some of the issues coming up had been settled in court while others are just mere allegations that lack any research base or legal basis. The company has announced a 6% increase in wages for the new recruits in the year 2015 and continues to challenge themselves to be better mangers of diversity. Conclusion Every company has a potential for the best. Walmart is a multinational company that employs unrivaled big number of employees worldwide. Such huge number of employees is a big challenge to wholesomely satisfy their needs. It is for this reason that it becomes the opinion of this report to suggest the following recommendations for the case: improve the diversity of the top most board members, senior managers to also reflect fair representation. Secondly, the company should promote on merit and observe that an employee has a right to be promoted and trained after serving the company for more than three years. Walmart should also recognize that there presence in an area has so much impact economically and therefore if they care for the welfare of stakeholders, should consider their interest even before they initiate any project amidst them. Finally, the company should allow their employees the right to join a union and if possible, set up an employee welfare department to handle the needs of the employees. Works Cited Alana, S. (2013, November 19th). Fully staffed NLRB investigates complaints against Walmart. Retrieved April 7th, 2015, from http://latimes.com Amedo, K. (2013, July 23). Cultural diversity. Retrieved April 5th, 2015, from US Economy: http://useconomy.about.com/od/supp11/g/cultural-Diversity.htm. Barstow, D. (2012, April 21st). Vast Mexican briberycase hushed up by Walmart after high level struggle. Retrieved April 6th, 2014, from The NewYork Times. Carlisle, J. (2006, December). Walmart embraces controversial causes. Washington, DC: National Legal And Policy Centre. Retrieved April 5th, 2015, from National legal and policy centre: http://www.nlpc.org. DeAmicis, C., & Carson, B. (2014, August 21st). Eight charts that put tech companiess diversity statistics into perspective. Retrieved April 6th, 2015, from GIGAOM: https://gigaom.com/2014/08/21/eight-charts-that-put-tech-companies-diversity-stats-into-perspective/ Fan, D. (2010). Proof that diversity drives innovations. Retrieved April 6th, 2015, from DiversityInc: http://www.diversityinc.com/diversity-drives-innovation/ Fisher, D. (2011, June 20th). Supreme court dumps Walmart Sex discrimination class action. Retrieved April 4th, 2015, from Blogs.forbes.com: http://www.Blogs.forbes.com Fran, D. (2010). Head of Walmart tells WFU audience of plans for growth over next 20 years. Winston-Salem. Hiroko, T., & Barbaro, M. (2015, April 1). Walmart emerges as unlikely social force. Retrieved April 6th, 2015, from The New York Times. Marcus, K. (2006, July 18th). Walmart critics slam each other on the web. Retrieved April 4th, 2015, from The Washington Post. Martin, C. G. (2014). The effects of cultural diversity in the workplace. Journal of diversity Management, 89-100. McKinley, J., & James, c. (2004, September 28th). No,the conquistadors are not back, its just Walmart. Retrieved April 66th, 2015, from New York Times: http:www.nytimes.com/2004/09/28/international/americas/28mexico.html National Association of Females,. (2007). Walmart stores, Inc recorgnised as top company for executive women. Walmart Stores, Inc. Norman, A. S.-B. (2005, April 21). Store wars: when Walmart comes to town. Retrieved April 6th, 2015, from PBS. Paul, I., Yue, L. Q., & Hayagreeva, R. (2010). The impacts of Walmart: the rise and consequences of the worlds dorminant retailer. Annual review of Sociology, 53-92. Sarah, K. (2003, July 2). Walmart sets a new policy that protects gay workers. Retrieved April 6th, 2015, from New York Times. Sellers, J. M. (2005, April 22nd). Deliver us from Walmart. Retrieved January 2005, from Christianity today. Sharon Orlopp. (2012). Accelerating Walmarts commitment to diversity and inclussion. Workforce diversity, 2-14. Walmart. (2010, July 13). Walmart Annual Report. Retrieved April 7th, 2015, from Walmart: http://www.walmart.com/msharbor/?&veh=mweb Writer, S. (2005, November 2nd). Walmart to face employee suit in Missouri. Retrieved April 4th, 2015, from USA Today. Writer, S. (2006, October 13th). Walmart hit with $78 million fine. Retrieved April 5th, 2015, from CBS News. Zellner, W. (2003, March 3rd). No way to treat a lady? Retrieved April 4th, 2005, from Businessweek. Videos Walmart diversity video-YouTube. On smart mobile phones https://m.youtube.com/watch?v=ykyZROwpmxA?vndapp=youtube-mobile&vndclient=mv-google&vndel=watch Read More