Beruflich Dokumente
Kultur Dokumente
Case Study
“Norway Sells Wal-Mart”
SUBMITTED TO:
Mr. Imtiaz Ahmed
(COURSE INSTRUCTOR)
SUBMITTED BY:
Zill-E-Arsh (08-0054)
Supplier Agreement:
Wal-Mart is known for its innovative and tough management with its suppliers. In 1992
Wal-Mart formulated a supplier agreement which refers to the company’s standard for
suppliers. The standard included compliance with all national and standard laws in which
the supplier operated and covering compensation practices, hours of labour, child
labour, discrimination, workplace environment, social procedure, confidentiality, force
labour and immigration compliance. Wal-Mart’s first priority is to make the supplier’s
factories work with the compliance standard. In 2005 141 factories were banned to work
with because of child labour violations. Another 23 factories were also disapproved for
no compliance with the supplier standard. Supplier has to publically display Wal-Mart
standards in their factories.
Gender Discrimination:
The other allegation on Wal-Mart was of gender discrimination. The company faces the
largest gender discrimination case in the history of this country. Discriminatory policies
are as follows:
1. Denied Training: Women had been denied training and promotion opportunities
that are offered to men.
In June 2001 a group of six current and former female Wal-Mart employees filed a
sex discrimination lawsuit (seeking to represent up to 500,000 current and former Wal-
Mart workers) against the company. The suit was filed because Wal-Mart failed to
provide equal employment for women. It was an ambitious discrimination lawsuit against
Wal-Mart, accuses it of favouring men over women in promotions and pay.
The lawsuit includes all 700,000 women who worked at Wal-Mart from 1996 to 2001,
which would make it by far the largest employment discrimination class action in
American history.
The lawsuit, filed in 2001 in federal court in San Francisco, focuses largely on one statistic
compiled by plaintiffs' experts: in 2001, the suit claims, women made up 65 percent of
Wal-Mart's hourly employees but only 33 percent of its managers.
The suit also claims wide disparities in pay. In a study released early this month, Richard
Drogin, an emeritus statistics professor at California State University at Hayward hired by
the plaintiffs' lawyers, found that full-time women hourly employees working at least 45
weeks at Wal-Mart made about $1,150 less per year than men in similar jobs, a 6.2 percent
gap. Women store managers, he found, made an average of $89,280 a year, $16,400 less
than men. The following table clearly exhibits wage and authority discrimination against
woman.
Diversity Programs:
Although in 1990 Wal-Mart started a number of programs to achieve diversity, this
includes establishing a separate office to achieve diversity goals and paying officers 15%
bonuses for achieving diversity. Verdict of this discrimination case was not announced
when Wal-Mart’s stocks was divested from the pension fund. This was a strict act against
Wal-Mart because allegation was not imposed on them but still this was formed a basis in
convicting them of discrimination against woman and excluding them from the fund.
Prohibition on Unionization:
Wal-Mart was also convicted of not allowing forming unions of workers which is the
violation of worker’s right. Wal-Mart is a non union organization that feels it does not
need third party intervention. So, Instead of unions, Wal-Mart has an open door policy
that encourages employees to take their complaints beyond management. According to
this policy the door of the management is always open for the associates to share
suggestions, ideas, and voice concerns whether it’s help with a problem, guidance or
direction, or simply getting an answer to a question. Managers also treat all discussions
fairly, with an open mind, and without bias. They maintain complete confidentially,
whenever it’s possible. They work with the associates to mutually resolve any issues or
problems. This open door policy is violating workers right and strengthens management
to undergo unethical practices without any fear. This policy does little to help its
employees but gives the business the leverage it needs to terminate unwanted non
compliant help. Also employees start out at lower wages than unionized corporations
and end up quitting by the end of the first year. Wal-Mart’s global supplier network has
unions. In this allegation instead of relying on the published material the Ethical council
should themselves meet the workers of Wal-Mart and investigate from them that how
much they are satisfied with the open door policy.
Repudiation of investor’s request to change Wal-Mart’s Business Practices:
Furthermore the ethics council also cited unsuccessful efforts by several investor groups
to change Wal-Mart business practices. These efforts include
Third party inspection of Wal-Mart’s Latin location which was turned downed by
the management.
Shareholder’s proposal of independent monitoring of Wal-Mart suppliers for their
compliance with the International Labour Organization’s human rights standards.
It was rejected as only 4.4% of shareholders favoured it.
A group of investors proposed to prepare a report on Wal-Marts efforts to human
rights protection, worker rights, land and the environment right. This also was not
well supported by the share holders but Wal-Mart was publishing this report in
2007.
Wal-Mart was not bound to follow the shareholders resolution as they are advisory in
nature. But Wal-Mart should make efforts in publishing such material that clarifies its
efforts for being ethically responsible. This sets back Wal-Mart even if was taking
responsible actions. If such a material is published or a third independent party is
monitoring Wal-Mart operations then Wal-Mart’s ethical practices would be known and it
will also shut the mouth of those who are highly declaring it as an unethical organization
undergoing intensive human rights violations.
Health Care:
Nationally, 64% of workers in companies of 5,000 employees or more receive their health
benefits from their employer. However, Wal-Mart typically covers only around 50% of its
employees. In addition, the average wait for full-time Wal-Mart workers to qualify for
benefits is six months, compared to the retail average of 2.6 months. Wal-Mart avoids
providing benefits by relying more heavily on part-time workers, who must wait a year
before receiving any benefits. In addition, with Wal-Mart's high employee turnover rate,
many workers never get health care. The affordability of Wal-Mart's health plan options
is another problem. Getting Wal-Mart's choice network family plan with a $322.60 bi-
weekly premium, $700 annual deductible, $500 health care credit, and $4000 out-of-
pocket medical expenses could potentially cost over $12,000 a year. However, the
average Wal-Mart employee makes approximately $20,000 a year.
Environmental Issues:
In 2001, the Environmental Protection Agency and Justice Department fined Wal-Mart for
violating newly adopted standards for storm water runoff. In 2004, Wal-Mart faced fines
for violations of environmental laws in nine states and paid the government $400,000 to
settle claims that it had violated air pollution regulations in eleven states. Wal-Mart was
also fined in Georgia for allowing polluted storm water to run into state waters and in
Florida for failing to adhere to safety restrictions on petroleum storage at its auto service
centres. Currently, Wal-Mart is under investigation for ignoring hazardous waste laws in
several states.