Walmart Female Discrimination - Research Paper Example

Walmart Female Discrimination and What can be Done to Change It TABLE OF CONTENTS Abstract 1 Introduction 4 Ethical code of conduct 4 Business culture 5 SWOT Analysis 7 Strengths 7 Weaknesses 7 Opportunities 8 Threats 10 Recommendations 10 Conclusion 11 References 12 Abstract Many criticisms and complaints have been read against Wal-Mart. These come from employees, especially female who are disappointed about the disparity of their pay with those of their male counterparts. Claims have been filed by thousands of female employees but the court’s decision seems to be in favor of Wal-Mart. This paper provides an insight on these discrepancies, tries to analyze strategic issues in order to come up with recommendations that would be acceptable to Wal-mart and to the female employees. There are many issues against Wal-mart, particularly its poor business practices, but this research will be limited to female discrimination only. keyword: Wal-mart, discriminations. female employees Walmart Female Discrimination and What Can Be Done to Change it Introduction Wal-Mart is one of the largest retail corporations operating worldwide. Because it is a big enterprise, employees hope that it will provide them with a good future in employment. However, there are many reports and cases of discriminations filed against this company. Not only one, but a class suit that means, a lot of employees are complaining, particularly women who say they are disadvantaged in terms of pay and promotions. This report will take an insight of these discriminations and makes a Strategic Issue Analysis to show if they are valid points, then come up with recommendations to change it. First, let us examine its code of ethics to know any hint of discrimination. The ethical code of Wal-mart The statement of the code of ethics of Wal-mart is based on non-discrimination. As Sam Walton said: “Personal and moral integrity is one of our basic fundamentals and it has to start with each of us” and on “respect for individual”. Walton believes that each individual in the company is responsible for creating a culture of trust and respect that promotes a positive work environment. To Wal-mart, this means treating one another with courtesy and fairness in the workplace. A relevant portion of the ethics states: “We are committed to maintaining a diverse workforce and an inclusive work environment. Walmart will not tolerate discrimination in employment, employment- related decisions, or in business dealings on the basis of race, color, ancestry, age, sex, sexual orientation, religion, disability, ethnicity, national origin, veteran status, marital status, pregnancy, or any other legally protected status. We should provide an environment free of discrimination to our associates, customers, members, and suppliers.” (Wal-Mart Statement of Ethics) Business culture of Wal-mart Wal-Mart has established a culture of cost-cutting and budget consciousness in its stores from the very beginning. Its strategy is to pass on to customers any savings realized from the bargain realized from suppliers. Sam Walton, the owner, believed that the only way for his company to grow is to keep overhead expenses down, and this means, paying employees less than what is needed, and hiring fewer people. He did not like unions, and did everything to fight them. He was a shrewd businessman, but possessed a charisma that convinced his employees of staying in the company because of a profit sharing scheme to show he had a conscience. In 1971, he introduced a profit sharing scheme encouraging employees to put a certain percentage of their wages in purchasing subsidized Wal-Mart shares of stock. This is a promise of good money for employees who stay in the company for long. For example, as mentioned by T.A. Frank, a driver of the company who made investments in the company has already made $707,000 in profit sharing and sees no reason to leave the company. The growth of Wal-Mart made two impressions from the public; one of being technology advanced and for creating business innovations, and the other, for its hard business practices. Discrimination at Wal-Mart In order to keep the payroll costs down, company pays lower wages to women than their male counterparts in the same position. Women also complained that they are denied of promotions. According to T. A. Frank, citing the numbers in a class action in a law suit, a female store manager gets an average pay of $90,000 in annual income while her male counterpart, receives $100,000 annually. This case has been interesting because the courts and the lawyers could not agree if this is a class suit or not. A class action law suit is filed on behalf of a group of people who have in some way been injured by the actions of a company. Common cases of class suits are those filed by members of the company if hiring or salary practices are illegal (Wise Geek) This is sympathetic on the part of the employees because after months of trials, the Supreme Court ruled that it could not proceed as a class suit, and that the employees had nothing in common besides being women. The court stated: "[Members of the class] held a multitude of different jobs, at different levels of Wal- Mart's hierarchy, for variable lengths of time, in 3,400 stores, sprinkled across 50 states, with a kaleidoscope of supervisors (male and female), subject to a variety of regional policies that all differed. . . . Some thrived while others did poorly. They have little in common but their sex and this lawsuit."(Los Angeles Times June 21, 2011) SWOT ANALYSIS A Strategic Issue Analysis done in a SWOT format is a tool that can be used to identify strategic issues with a group of people. It is based on indentifying issues on strengths, weaknesses, opportunities, and threats. Focusing on the internal and external environments, using a SWOT analysis will provide information needed in the company’s survival. A SWOT analysis for Wal-Mart is done to manage tensions and determine its capacities in relation to it opportunities and threats. The SWOT Analysis done in this research will be a review of the issues and trends relevant to the problem of discrimination issues of the company. STRENGTHS Review of the internal resources or capabilities of the company Physical facilities Its stores are located in 8,970 locations worldwide. Wal-mart intends to serve more stores in the future. Adequate resources As of 2012, its reported revenues totaled $443.853 billion, which is more than adequate to give in to the demands. Number of employees: As of 2012, number of employees is 2.2 million Company values: To satisfy customers always by maintaining low prices History: 50 years of successful operations. Linkages and network. Wal-Mart has domestic distribution network consisting of more than 100,000 suppliers, 147 distribution centers, two data centers, US. transportation infrastructure, 7,200 tractors, 53,000 trailers, 7,950 drivers and more than 85,000 employees. Its operations are highly automated, with goods in constant motion, WEAKNESSES: A Review of the internal weaknesses and deficiencies in the organization. A weakness found in the review is the flawed organizational structure that is said to be due to a centralized corporate system. Flawed organizational structure. Wal-mart calls their employees associates. Number of employees as of 2011 is 2.2 million deployed in 8,970 locations worldwide. Monitoring performance of each employee for this large company needs a flexible structure. Management shows flaws in organizational structure. For example, in the complaints of women filed in courts, men are given more preferences than women regardless of training and experiences. As claimed by women in Class suits in court, opportunities for promotion for women are limited simply because they are women. This is gender discrimination. Dukes’ case cited the plea of Wal-Mart management that one of the reasons women are least promoted here is because “women are not aggressive enough” and that “sex discrimination is a by-product of a strong and centralized corporate system that comes from its head office.” In the Duke vs. Wal-mart case, plaintiff’s presented the following findings: Non competitive pay scale According to claims, women are given a lowered pay in the company, just for the sake of cost cutting. This is simply a violation of Civil Rights Act of 196. It has non competitive pay structure both external and internal. Wal-Mart-pays lower pay structure than competitors to keep operating expenses down, and opportunities for promotion for women are limited. Shown below is a table of comparative wages of men and women in Wal-Mart as cited in Dukes case in the Supreme court. As shown, disparity in wages could go as high as 78% for the Department heads, Chart below lifted from case of Duke v. Wal-Mart shows a comparison of wages of male and female employees in Wal-Mart. (Alliance for Justice). About 1.5 million female workers of Wal-mart are involved in this case. source: Associate for Criminal Justice (Duke v. Wal-Mart case) OPPORTUNITIES are external opportunities that can affect the organization in a favorable way. These opportunities are found in global economy which is the most profitable branch of Wal-mart. Global economy According to the Zach’s Industry Outlook at Yahoo Finance, Wal-Mart has an impressive second quarter earnings, driven by positive and store line sales. Zach’s analysis was driven by the scale, product and geographic diversity of Wal-mart. The company is expanding its presence on the on-line retailing. Wal-mart is currently tagged as the sixth largest internet retailer, and is reported to have a strong market in U.S, U.K, Canada and Brazil. Their stock in the market is ranked no. 2 by Zach’s rating. EXTERNAL OR FUTURE THREATS Problems found are demands for union management in many areas where Wal-Mart operates. Unions would press for equal pay, promotions and health benefits. Union management Employees request to be unionized, not only in US but also in other countries where Wal-mart operates. One of the suppliers of Wal-mart in Guangdong, China put on a work stoppage as a form of strike to vent their anger over their poor wages and many abusive working conditions. (French, Howard, Dec. 16, 2004) . In four Wal-mart stores in the Washington DC, union members demand for living wages and health benefits. If uncontrolled, strikes may hamper operations. Political issue Some communities are glad to have a Wal-mart store in their areas, others resist because of environmental concerns, traffic and congestion. Certain areas refused to have a Wal-mart presence, such as Vermont and Inglewood, and D.C. California because of incompatible with city ordinance. In Inglewood, resistance is due to resident’s sympathetic view and strong support to labor unions (Sam Ford.) Recommendations Change of actions Payment of Wage differentials is not feasible because Across the board increases, living benefits and health insurance are recommended instead of differentials A 5% across the board increase would mean: Total wages of male = $927,180 million Total wages of female= $698,987 million Total $1,626.167 billion 1. A 5% across the board wage increase means $81.308 million, to scale up yearly, depending on revenues. 2. To shrink the difference between the disparities of pay, the Board may consider granting the increase to women employees only. This would cost $349.493 million annually. 3. Since corporate structure is difficult to correct immediately, the company may look on other measures of compensating employees based on merits. To motivate employees, company may grant awards, incentives, and bonuses. Employees will be encouraged to perform because here, there will be no discrimination since it will be based on quota and target performances. Awards may take the form of vacation, cash awards and prizes. Female employees can also prove their worth if bonuses is based on target performances that will be designed by the company. Conclusion It is clearly stated by the ethical standards of the company that there should be no discrimination in the workplace. However even the owner admitted in its implied practices that women should be paid less. It is a company strategy to minimize on overhead expenses. Keeping it low is one of the reasons that brought the company to its present heights. It is the culture set that has been embedded in the corporate structure. Recommendations above will motivate employees because it is done on merit and will scale down discriminations since it is not based on gender. On Unions, forming of unions is slowly losing its appeal to workers because of added expense being deducted from their pay. Forming of Management union which is an alternative proposed by Wal-mart would be better because it has the same objectives, and will not meet the ire of management. References Alliance for Justice. Wal-Mart v. Duke. Report – final. pdf. Cavalier, Jesse (24, May 2010). All those numbers, logistics, territory, and Wal-mart. Retrieved 04 November 2010 from Frank, T. A. ( April, 2006) A brief history of Wal-Mart. April, 2006. Published in Washington Monthly. Reclaim Democracy. Retrieved 04 November 2012 French, Howard. December 16, 2004. Workers Demand Union Supplier in China. New York Times Retrieved 03 November 2012 Ford, Sam. Feb. 7, 2011. Group demands Wal-mart Pay living wages at D.C. stores.TBD. Retrieved 03 November 2013 Hoovers. Wal-Mart Company Profile. Retrieved 04 November 2012 Los Angeles Times. 21 June 2011. Supreme Court cuts Wal-Mart too much Slack. Editorial. Retrieved 04 November, 2012 Shapiro, Lila. Jan. 25, 2012. Walmart Faces Long Battle On Sex Discrimination, Despite Supreme Court Ruling. Huff Post. Business Retrieved 04 November, 2012 Wal-Mart Statement of Ethics. Non Discrimination. http://ethics.walmartstores.com/IntegrityIntheWorkplace/Nondiscrimination.aspx Wise Geek. What is a class action lawsuit? http://www.wisegeek.com/what-is-a-class-action- lawsuit.htm Yahoo Finance. Zachs Industry Highlights: Coca-Cola,Herhey, Wal-mart stores, and Molson Coors Brewing. Zach’s Equity Research. 30 October 2012. http://finance.yahoo.com/news/zacks- industry-outlook-highlights-coca-091818715.html Read More