Unethical Actions by Walmart - Essay Example

and Number ical Argument Essay: Wal-Mart--Are they doing anything unethical It has been argued that every business's practice to maximize profits. Profit maximization is "the ability to deliver highly available and desirable offerings at minimal cost" as defined by Dortch (2005). This is common sense. Maximizing profits will help to increase sales, retain customers, draw in new customers, keep inventory fresh, and so much more. Some believe that not all business practice maximizing profits and that they are there to assist their customers and offer a service or product. However, this study aims to stress that every business's practice is to maximize profits. Having stated this, the goal of profit maximization does not mean that it is wise for businesses to act and conduct business in an unethical manner in order to gain profit maximization. Business ethics should be followed or consequences will result which can be detrimental to all. Machan (2003) lists the meaning of business ethics as "a discipline specializing in the examination of answers to the questions 'How should I act' or 'What standards ought I use to guide my conduct'...Business ethics assumes commerce and business are, as a rule, morally proper." In the quest to maximize profits, some businesses do not act in an ethical manner. It is an ever-increasing problem as business acquire more profits, they tend to behave in an unethical manner. However, a business can still maximize profits, Last Name 2 gain profits, and act in an ethical manner by focusing on its goals and benefits and the goals and benefits of its customers. This essay shall focus on small businesses in regards to ethics. Small businesses are more flexible and if they adopt innovative methods and technology, they can increase growth can increase growth capacity (which leads to more jobs), better profitability, and more purchasing power. However, businesses tend to act in ways that are not moral and are unethical in their pursuit to maximize profits. In the beginning, Sam Walton's first Wal-Mart was funded 95% by his own money. Many believe that small businesses that have grown tremendously such as Wal-Mart behaved unethically in order to get where they are. Today the company has grown to 1.3 million worldwide associates and fifteen countries are home to the wholesale clubs. (The Wal-Mart Story, n.d.). They tell of how Wal-Mart has created millions of jobs. A post by Average Joe (2006) states that "Wal-Mart pays billions and billions of dollars in Federal Taxes every year and is one of the only companies in the US to pay the 35% corporate tax rate. They are one of the only companies left in America that doesn't cheat the U.S. government!" Regardless of the job increases and tax payments, many support John's (2004) opinion, "Wal-Mart has destroyed communities in thousands of small towns across America. Check out any small town main street and all you see is boarded up shops and dead, lifeless, streetsnow its coming to Europe and doing the same thing because for every mom and pop store that's thrown on the scrap heap other local jobs are lost as well." Last Name 3 And although Wal-Mart may be creating jobs while it is destroying jobs, the more Wal-mart lowers its prices, more customer loyalty is created. This leads to lower rates of pay in other countries such as China in order to justify for the lower prices. A corporation such as Wal-Mart can pressure to shut down cheap warehouses in third world countries such as Mexico because their workers were making too much. As corporations get bigger especially as huge as Wal-Mart has become, they "are in positions of power that allow them to do greater damage to others when they act immorally or unethically or socially irresponsibly" as Why Bother With Ethics (n.d.), reports. One blogger Eli (2005) posts, "Do you know where all of those cheap products are being producedThose products were OUTSOURCED taking THOUSANDS of jobs from right here in the United States." Jen (2005) posts, "There is no moral conscience in Wal-Mart executives. If we don't bring this to light, one day soon there may be no manufacturing base in this country at all because of large discount retailers like Wal-Mart. Where will the middle class go then What about workers without college degrees Will we be a society of haves and have nots Will we all work for Wal-Mart Will crime increase Will our country self-destruct I believe YES. We are all devouring ourselves in the search for the cheapest price and Wal-Mart, the roach of society, will be all that is left alive." Companies behave unethically when they forget that their customers are a huge asset and focus mainly on the bottom line. The False Profit Manifesto (2004) states, "We believe companies fall into bad practices when they separate Business Relationships from Personal Relationships. Last Name 4 This allows them to act unethically and then dismiss these actions as 'nothing personal' and 'just business'. We believe it is never 'just business'. People come first.'" A controversial debate of companies behaving unethically in order to maximize profits is the practice of credit card companies issuing cards to college students even though they do not have the ability to pay. College students are a huge target for credit card companies. Greene (2004) reports: Like alcoholism and drug addiction, uncontrolled spending and debt has become a social disease. The bait is tossed with lures like, "You can pay for your Spring Break trip with your new Credit Card!" A college ritual so sacred that students tend to focus on the immediate gratification of the desire without regard to the inevitable consequences. It is as if they believe that for the moment someone else is paying for the trip. Airfare, hotel, car rental, food and partying, could end up costing $1500 or more for that memorable Spring Break. But once they get back to school, the bill comes and reality hits. These credit card companies are involved in loading college students up with credit cards they cannot repaystudents eagerly sign up for high rate credit cards because of perks like free t-shirts, coffee mugs, and other incentives. While the debts add up, the bills do not get paid because the Last Name 5 students often lack income. Some students graduate in so much debt that they start out their careers by filing for bankruptcy. Even companies with the best codes of conduct and record of behaving in an ethical manner can sometimes mess up. For example, Johnson & Johnson acted in a swift, ethical, and in a moral manner when in the 1980's Tylenol painkillers poisoned eight people. Then the same company turned around in 1995 revealed that one of its companies shredded evidence in a federal investigation. They were forced to pay $7.5 million. (Schaefer and Zaller, n.d.) Cline (n.d.) reports, "Pharmaceutical companies that cover up negative trials are acting in a grossly unethical manner - so unethical, in fact, that serious consideration should be given to finding some means of punishing them. They are putting profits and market-share ahead of the lives and well-being of the most vulnerable in society: the sick, the dying, and the mentally ill. There's simply no excuse for that and we should not be complicit in this by letting them get away with it." Companies seem to lose their moral standards and behave unethically in the quest to gain profits. Companies comprise of humans and humans tend to seek their own self interest. It seems to be a human drive to seek profit, whether it be monetary or in other forms. Many believe that you cannot maximize profits by thinking others first. "It's dog-eat-dog world" or "every man for himself" is the belief that many have regarding the business world. It is apparent that there needs to be a change in this way of thinking and doing business. Can businesses contribute to the good of the community and act ethically and still make profits Are there reasons that businesses should strive to do good Machan, T. (2003) states: Last Name 6 Yes, the virtue of prudence, which requires of us all to take reasonably good care of ourselves in life, is such a moral virtueThe effort to prosper, to seek to profit, is part of what the moral virtue of prudence requires from us. Commerce, for us all as amateurs, and business, the professional extension of commerce, specialize in the production of prosperity. They are what I call an institutionalization of certain dimensions of the virtue of prudence. The virtue of prudence is seriously demoted when converted to the profit motive, an innate drive to promote one's self-interest. In ancient Greek philosophical ethics, as well as in other traditions of virtue ethics, prudence was seen as living carefully, doing what one's good sense, practical reason, would judge right. But this tradition fell on hard times, with the embrace by modern philosophers such as Thomas Hobbes of a mechanistic explanation of human behavior that hardly left room for ethics. An employee of Wal-Mart for eleven years, Devin says that he makes good pay, gets insurance, sick leave, 401K, profit sharing, stock options, and a yearly bonus. (Devin, 2006). However, Pragmatist (2006) posts in his review, "'the typical Wal-Mart' associate..was paid $9.68/hour ($17,600/year) in 2005, vs. $12.28 for "average" retail employeesonly 44% enrolled in Wal-Mart's medical plan - presumably because they can't afford itSeniors are a major recruiting pool for Wal-Mart. On the other hand, the 6 month waiting period for full-time and 24-months for part-time employees IS a major impediment46% of Wal-Mart employees' children are either uninsured or on Medicaid, that it faced 40 class-action suits in Last Name 7 '05 for forcing employees to work extra hours without pay, and shut down the only store that voted to go union." Although a few associates are happy with their pay and benefits, many more are very dissatisfied as the previous statements have shown. In defense of Wal-Mart, some say that it did a good thing by suspending 1,200 contractors in other countries due to the abuse of workers and that about 100 workers lost their jobs due to the violation of child labor laws. However, many argue that Wal-Mart did not do this for ethical reasons but to avoid problems regarding public relations. It is true that Wal-Mart has created jobs and does provide items at cheaper prices. It is also true it provides staple items allowing those in lower and middle income levels to be able to spread their dollars more. However, in the larger scheme of things, as Wal-Mart maximizes profits, it is behaving in a manner that is not morally and ethically correct. Challies Dot Com (2006) quotes Bianco (2006): The average Wal-Mart employee working full-time earns just $9.69 per hour, which adds up to less than $18,000 per year. * Only 44 percent of Wal-Mart employees are enrolled in the company medical plan. Most who are not enrolled cite the high cost of insurance premiums as the reason they are unable to enjoy the medical benefits. * 46 percent of the children of Wal-Mart employees are either uninsured or are on Medicaid. * The company has faced multitudes of lawsuits alleging that it forces employees to work extra hours without pay. Wal-Mart's internal Last Name 8 studies have reached similar conclusions, but the company has taken little or no action to correct this. * Wal-Mart is a strongly anti-union company. When a store in Jonquiere, Quebec voted to join the United Food and Commercial Workers Union, the company simply shut down the store and fired all of the employees. * Annual employee turnover is nearly 50 percent, meaning that Wal-Mart must hire almost 600,000 new employees every year. * Wal-Mart alone accounted for over 13 percent of the U.S. trade deficit of $162 billion. Studies have concluded that over 80 percent of Wal-Mart's international suppliers are based in China where labor costs are very low. Wal-Mart is increasingly dealing with international suppliers for this very reason. This is done, of course, at the expense of domestic suppliers, and thus, domestic jobs. A solution for these problems was stated at the beginning of this essay. Business can and will maximize profit by acting in an ethical manner. In doing so, it creates a win-win situation for all. It is first in the hands of management. Thinking of others first, being loyal to your greatest assets-humans, and aiding the local and global community only advances a company's goals and objectives. This prevents or reduces Wal-Mart's lawsuits, allegations against them, empowers associates as they know the company cares about them, etc. By incorporating methods and policies to resist the temptation to act unethically, such as Last Name 9 developing a mentoring program for managers and associates; recognizes and dealing with unethical managers, processes, and requests; looking for win-win solutions, etc. Wal-Mart can continue maximizing profits (as it is already a gigantic world entity and influence) and contribute to the good of all by behaving morally and ethically. There are many clichs and mottos that pertain to this topic such as The Golden Rule that Mary Kay Ash of Mary Kay Cosmetics states, "Treat others as you would like to be treated" and "You reap what you sow", etc. simply are not just mottos and clichs. They are life laws. Whether we acknowledge them or not, these laws exist as the choices we make and the actions we take result in consequences-good or bad. In conclusion, by adopting an ethical policy and looking at the best interest of others (as "others" are their greatest assets), Wal-Mart can continue to maximize profits and invest in bettering the global industry that they have so successfully become an incredible part of on all levels. References Challies Dot Com (2006). Flawed but Still Worth Reading. Online Posting Review. 03 March 2006. 24 June 2006. . Bianco, A. (2006). The Bully of Bentonville. Cline, A. (n.d.). Clinical Drug Trials "Distorted". 23 June 2006. . Dortch, M. (2005). Robert Frances Group. 23 June 2006. . Devin, Eli, Jen, et al (2005). "Wal-Mart Watch on CNBC Today.' Online posting. 20 April 2005. WalmartWatch.com. 23 June 2006. . Greene, J. (2004). Should Government Put Limits on Credit Card Offers to College Students 23 June 2006. Machan, T. (2003). "A Brief on Business Ethics." Philosophy for Business Electronic Journal, Issue Number 1. 2 November 2003. 22 June 2006. . Pragmatist (2006). Simplistic and Biased but Somewhat Interesting. Online Review Posting. 24 June 2006. < http://www.amazon.com/gp/product/0385513569/102-1540613- 4633768v=glance&n=283155>. Schaefer, A. and Zaller, A. (n.d.). Strategic Modeling: The Ethics Audit for Non-Profit Organizations. 23 June 2006. . The False Profit Manifesto (2004). False Profit, LLC. 23 June 2006. . The Wal-Mart Story (n.d.). 23 June 2006. . Why Bother With Ethics (n.d.). 23 June 2006. . Read More