Wal-Mart Business Ethics

Author  Jon Lehman worked for Wal-Mart for 17 years, managing six stores in four different states before he left the company in 2001 to work for a union trying to organize Wal-Mart employees.

Opening Price Point  They did a study -- a very critical study, very thorough study -- and found that Wal-Mart was not always the low price.  Customers will form an opinion that this is the best place to shop.  The customers are duped.

Relation to Suppliers  Communication between Wal-Mart and their suppliers is a one-way relationship.  These two are not partners.  Move to China because it increases their profit margin

Who is To Blame?  Benedict Arnold CEO’s are not to blame.  They are being forced to move offshore by the big retailers.

Relations to Employees  They said 90 percent of its workers have health insurance. But they may have it through their spouse's employer, who, by the way, may be a union employer.  The union contract employer is actually bearing an undue burden.

Employees  poverty-level wage  lousy benefits  worked off the clock  cheated out of overtime  gender discrimination lawsuits

Investors  Book the products to their bottom line before they are sold.

Author  Nelson Lichtenstein teaches U.S. labor history at the University of California, Santa Barbara, where he is at work on a book about Wal-Mart and 21st century capitalism.

Secret of Their Success  Technology Communication Workers easy to replace so can tolerate high turnover  Low-wage, low-benefit model  Rise of Sunbelt

New Model  low-wage  low-benefit  rapid turnover  Low skill  immigrant labor  High unemployment areas

Re-defining Work  The idea of two jobs, of temporary employment, of a very weak relationship to the employer -- that is, you may get fired at any moment or just quit -- that becomes the norm.

Community  Wal-Mart places an unfair burden on the public services of the local community.  It relies upon social services to provide support for their employees.

Fairness  What you need to do is equalize and make complementary these two societies Labor standards Environmental standards

Externalities  An externality occurs when a decision causes costs or benefits to stakeholders other than the person making the decision.  In other words, the decision-maker does not bear all of the costs or reap all of the gains from his action.  With negative externalities, costs are shifted onto others.

Current Issues  Maryland lawmakers drafted a bill requiring organizations with more than 10,000 employees to spend at least 8 percent of their payroll on health benefits -- or put the money directly into the state's health program for the poor.

Current Issues  Wal-Mart, which has 15,000 workers in Maryland, was the only company that would be affected.

Current Issues  The Associated Press reported on the release of a new state study that shows Wal-Mart tops Massachusetts’ Medicaid lists, with 2,866 employees and their dependents costing Bay State taxpayers $7.9 million.

Current Issues  The company agreed to pay $11 million to settle claims that one of its cleaning contractors hired illegal immigrants,  The Company is also battling a sex discrimination complaint filed by current and former female employees.