Does Wall-Mart have an ethical obligation to oversee labor violations and low labor wages occurring in its supply chain? Wall-Mart continues to ignore employee wage dissatisfaction and is now facing legal charges from indirect laborers and contractors. Wall-Mart oversees every aspect of their supply chain and have set the standard on how to keep cost the production, transportation and handling of goods to a bear minimum. This type Of business model has placed an economic burden on all labor cost within their supply chain.
Something must e done to prevent other business entities from the same cost cutting methods that lead to wage deficiencies and abuse. Wall-Mart sets unfair contract standards that make it difficult for contractors to meet their requirements and still make enough profit to pay their workers fairly. The amount of control they hold over their contractors should make Wall-Mart legally accountable for the exploitation of indirect laborers. Wall-Mart views worker empowerment as a major threat to their business model and have fought long and taken extreme steps prevent worker organization.
Unionization can lead to higher income and better working conditions. Wall-Mart employs over 1. 4 million Americans, that’s 1% of the working population. Unionization by this great number can lead to negative results to the company’s bottom line. The average Wall-Mart employee associate makes $20,744 per year, that’s below the $22,000 poverty line. By raising its prices by 1. 4% Wall-Mart can get its employees above poverty line threshold with no affect on profit. Wall-Mart has annual profit of close to 15 billion per year.
This very strong evidence that have the financial means to raise wage expectations for their employees. *Business Insider Swept 20, 2010 Wall-Mart targets low-income communities as a base for cheap labor and customer base. Low-income workers and communities should seek other low cost alternatives and backing from local governments and media outlets. Local communities can make a strong impact by showing support for the workers by calling for changes or discontinued support for the retail giant. Local dollars are a big source of Wall-Mart’s revenues.
Media outlets and local community representatives can get the attention of internal and external stakeholders by calling out deficiencies in Wall-Mart’s wage structure. They can also more easily bring about a boycott of the retailers products and services. Corporations believe low-income communities do not have a strong voice, but individuals they can speak volumes by taking their dollars to a more socially responsible business. A judge rejected Wall-Marts request of a dismissal of a class action suit filed by around 1800 employees in Wall-Mart’s supply chain in California.
Workers claimed unfair working conditions and wages, the case is set to go trial in the summer of 2015. This case would set a new standard for the treatment of low-wage contract workers for Wall-Mart and other retailers around the country. By handing out a hard punishment to Wall-Mart, the legal system will set an example and to other retailers who follow this unethical format and recognize they will also be punished and held liable for their actions. Leaders and politicians will be expected by their constituents to comment on he case and call for changes given the media coverage that will be tracking the case.
This case will encourage others individuals to come forward with their legal claims and force Wall-Mart to make permanent changes to the way they treat their employees or other damaging litigation’s will follow. Wall-Mart’s Board of Directors are in charge of all the high level decision making and are ultimately responsible for the way that the business operates. In a worst care scenario courts are now allowed to “pierce the corporate veil” and go after the leadership directly if major negligent activity is found.
Conclusion/Overview As a member of Wall-Marts Board of Directors it is our duty to bring the most value to our investors by creating a profitable long-term business model that is consistent with our mission statement “saving people money, so they can live better”. But feel the mission statement that we still follow, which was established over 50 years ago when the company was still a nickel and dime store is no longer consistent with the current business environment and social standards.
We are now a 500 Billion dollar company that employs over % of countries working population and need be more conscious of how our decisions affect our internal and external stakeholders. Saving customers money does not always lead them to a better lifestyle when it also jeopardizes their health and effects their wealth minimization. The way our current business Operates involves draining the resources of suppliers by constantly seeking cheaper product and better pricing, which sometimes involves importing products from overseas suppliers with very low quality standards that provide slave wages and harsh working conditions for their rowers.
Our business model also forces us pay our “associates” with the lowest in the industry wages. We are now also accused of using unethical tactics to keep our employees from exercising their right to unionize. If we continue our current business model we will further lose the good faith of our customers and employees and will also be faced with more harmful litigation like the one we are now facing with our supply chain contractors. It is in our best interest to act on our own and begin to make amends with the customer base we have lost because of our lack of action.