One Nation Under Walmart Essay

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Walmart is one of the world's largest, most successful, and most vilified corporations. – Art Carden, 2010

Introduction



Today, Walmart is the largest company in the world with more than 11,500 retail units in 28 countries, annual sales exceeding $288 billion and 2.2 million employees called “associates” (Walmart corporate and financial facts, 2015). In addition, Walmart is one the largest private employers in both the United States and Canada (Walmart corporate and financial facts, 2015). What makes Walmart particularly noteworthy is that it achieved its current level of success in retailing, and no other retailers have come close to being as influential or large (Shaw). Notwithstanding its economic success, Walmart has also been the source of significant amounts of criticism because of the low wages it pays as well as its adverse impact on small businesses in the cities and towns in which it competes. To determine the facts about Walmart, this paper provides an analysis of the case study, “One Nation under Walmart,” from a utilitarianism perspective, followed by a summary of the research and important findings concerning Walmart in the conclusion.

Review and Analysis



Founded in 1962 by Sam Walton, Walmart’s first store was located in Rogers, Arkansas. In 1969, the company incorporated under the commercial name “Wal-Mart” and in 1972 it became publicly traded on the New York Stock Exchange (Walmart corporate and financial facts, 2015). Today, the company operates retail stores under the name “Walmart” as well as Sam’s Clubs, Neighborhood Markets and Supercenters as well as maintaining a prominent Web presence with its corporate Web site, Walmart.com (Walmart corporate and financial facts, 2015). At present , Walmart operates about 971 discount stores, 2,447 supercenters, 132 neighborhood markets, and 591 Sam's Clubs in the United States (Corona, 2014). In addition, Walmart has 21 retail stores in Argentina, 313 in Brazil, 305 in Canada, 149 in Costa Rica, 70 in El Salvador, 145 in Guatemala, 47 in Honduras, 394 in Japan, 1,023 in Mexico, 46 in Nicaragua, 54 in Puerto Rico, and 352 in the UK, together with more than 202 stores in China that are managed as joint ventures (Corona, 2014). Moreover, Walmart is the only company in the top four of the Fortune 500 that is not an energy company (Carden, 2010). 



To its credit, Walmart has been cited for a number of positive contributions to the communities in which it competes. For instance, Shaw notes that, “The good news for consumers is that Walmart has risen to retail supremacy through the bargain prices it offers” (p. 180). Likewise, the company was among the first to offer $4 generic prescriptions which has benefitted tens of millions of senior citizens and low-income consumers (Massengill, 2013). In addition, Walmart donates millions of pounds of food each year to the needy. For instance, Creel (2011) reports that, “Walmart donated more than 127 million pounds of food to Feeding America in 2009” (p. 23). Moreover, the company has achieved a 60% increase in fuel efficiency in its vehicle fleet since 2005 (Creel, 2011). The company has also taken aggressive steps to improve its overall environmental sustainability in recent years (Orlando, 2012). 



Besides the foregoing laudable efforts, the company has also partnered with First Lady Michelle Obama to provide healthier low-cost food alternatives in its retail stores (Shaw). In this regard, Hauter (2014) reports that, “Not only is Walmart promising to sell more organic products than ever before, but the company says it will sell them cheaply” (p. 19). Moreover, even the company’s critics praised Walmart’s efforts to provide humanitarian relief following Hurricane Katrina and environmental sustainability efforts.
In this regard, Shaw advises that:


Walmart has begun to respond to the criticism that it is a poor corporate citizen by improving employee health insurance coverage and adopting greener business practices. And even its usual critics applauded when the company responded rapidly to Hurricane Katrina, sending truckloads of water and food, much of it reaching residents before federal supplies did. (p. 180)



Taken together, it is clear that Walmart has become an enormously powerful entity that can produce significant social good by providing consumers with low-cost products and services, but this clout can also cause significant harm. According to Shaw, despite Walmart’s impressive economic success, the company has also been criticized for a number of reasons, including the following:

Walmart’s buying power and cost-saving efficiencies force local rivals out of businesses, thus costing jobs, disrupting local communities and injuring established business districts (typically two retail stores close after a Walmart opens after a 5-year period);
Walmart is staunchly anti-union, pays low wages and does not provide health insurance for its associates;
The company has sought to reduce spending on health care and other benefits by discouraging those with disabilities by required some level of physical activity for all positions and by hiring more part-time workers;
Walmart usually demands tax breaks when it opens a new retail facility, meaning that there is no corresponding increase in local tax revenues;
Because of its size, Walmart also exerts a downward pressure on retail wages and benefit throughout the country; and,
Because of the low wages it pays, government subsidies are required to help support many of its poverty-level employees and nearly half (46%) of children of Walmart employees lack insurance or are on Medicaid (Shaw, p. 179).



Indeed, even in those rare events where the company has been faced with pressures to allow unions for its employees, Walmart has actually closed its stores rather than allow unions to affect its human resource practices (Moberg, 2013). Beyond the foregoing, Walmart has been criticized for allowing some of its supply chain partners in developing countries to use child labor (Isern, 2009). In addition, the company was the target of a 2011 class action lawsuit by more than one million employees in 3,400 different stores alleging sexual harassment, discrimination and failure to promote among other causes (Reed & Harding, 2015). Although the plaintiffs provide overwhelming statistical evidence that confirmed that Walmart had corporate policies in place that disadvantage female employees, the Supreme Court unanimously held in Walmart v. Dukes (131 S. Ct. 2541 – 2011) that the plaintiffs had failed to present a complaint that was common to all members of the class and the case was dismissed (Reed & Harding, 2015).



While Walmart succeeded in dodging this bullet, it has not been so fortunate in other cases. For instance, in 2013, tens of thousands of supporters responded to calls from Organization United for Respect at Walmart (OUR Walmart) to support the 500 Walmart workers who staged a day-long walkout in about 1,000 Walmart stores (Moberg, 2013). According to Moberg, the Walmart employees were “fed up with what they saw as Walmart's inadequate pay, disrespectful working conditions and illegal punishment of workers who speak out” (2013, p. 31).



Clearly, Walmart’s business practices cause a number of good and bad results, depending on the perspective taken. The main tenets of utilitarianism hold that actions are morally right or wrong depending on their effects. In this regard, Nathanson (2015) reports that utilitarianism’s “core idea is that whether actions are….....

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References

Corona, R. (2014, July 1). A comparative analysis of major US retailers based on enterprise marketing efficiency. Global Journal of Business Research, 8(4), 25-28.

Creel, T. (2011, Summer). Corporate social responsibility: An examination of practices in the retail industry. Management Accounting Quarterly, 12(4), 23.

Gupta, A. (2014, July). How Walmart threatens organic food. In These Times, 38(7), 32-35.

Hauter, W. (2014, June). Walmart squeezes organics. The Progressive, 78(6), 18-21.

Isern, J. (2009, January). Bittersweet chocolate: The legality and ethics of child labor in cocoa production in Côte d'Ivoire. Journal of Applied Management and Entrepreneurship, 11(1), 115-117.

Massengill, P. (2013). Wal-Mart wars: Moral populism in the twenty-first century. New York:   New York University Press. 

Moberg, D. (2013, January). The Walmart revolt. In These Times, 37(1), 30-33.

Nathanson, S. (2015). Act and rule utilitarianism. Internet Encyclopedia of Philosophy. Retrieved from http://www.iep.utm.edu/util-a-r/.

Orlando, L. (2012, Winter). Follow the money. Ms, 22(1), 60.

Reed, T. & Harding, J. (2015, July). Employee class actions four years after WalMart v. Dukes. Defense Counsel Journal, 82(3), 255-260.

Stone, K. E. (2012, December). Walmart in Iowa revisited. Monthly Labor Review, 135(12), 40-44.

Walmart corporate and financial facts. (2015). Walmart. Retrieved from http://corporate. walmart.com/_news_/walmart-facts/corporate-financial-fact-sheet.

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