Wal-Mart’s Business Practices
Arianne Vargas
Southern New Hampshire University
March 15, 2015
Abstract
An organization’s policies are significant towards achieving organizational goals. Wal-Mart, one of the world’s largest retailers, took the lead in most of the American rating as the “most admired company in America” in early 21st century. The company has an impressive lead in the retailer, the company’s policy of low pricing and the environmental practices. In addition, it has exemplary treatment of the product suppliers, the use of public subsidies, gender based discrimination campaigns and foreign product sourcing. However, the company’s security policies have faced immense opposition from many critics including the organized labor unions, the human rights activists, environmentalists, and the anti-sprawl activists, all of whom criticize the retail for its business practices, which results in consumers’ negative perceptions of Wal-Mart’s corporate citizenship.
Introduction
Organizational behavior is a multifaceted discipline that is concerned with the nature and behavior of people within organizations and the nature and behavior of organizations within the surrounding (Miner, 2006, p. 3). In this case, organizational behavior deals with both individuals and holistic organizations. The paper evaluates the Wal-Mart’s business practices and relates them to organizational behavior; in addition, it states research questions and highlights what would be gained from the research.
Whichever model adopted by any organization, the main basic goals of any organization would include expanding the business so that it captures the larger share of the market, it performs exemplary in terms of profit maximization as well as maximizing the utility of the owners if at all the owners are not the managers. Wal-Mart’s Business is such business that has withstood many odd to be the leading retailer in the United States and the leading chain store of the world. To be that successful, the Wal-Mart’s business has adopted some business practices, some of which have had immense criticism especially from the civil right movements and the labor organization (Miner, 2006). These practices include among others: the foreign product sourcing, the environmental practices, the treatment of the product suppliers, the use of public subsidies the company’s security policies and the low prices of its products.
The Low Price Policy
The company has been able to produce products efficiently such that it charges low prices for its products both in the domestic market and in the foreign market. This approach could be termed as the Bertrand model in the game theory of Oligopoly market. However, Wal-Mart’s critics are pessimistic about this low prices arguing that they will draw customers away from smaller businesses on Main Street and by the end it will hurt local small-town businesses in other communities.
The Foreign Product Sourcing
The company has the policy of buying cheap raw materials from other countries like china for its production. Although this could be seen as efficiency in world allocation of resources, questions of whether the company is for the growth of the locally producing producers of the raw materials his company uses is a concern. The critics have warned that excessive reliance on Chinese products continues to hurt the United States economy (Shawn, 2006).
The Environmental Practices
The company has been accused in several fronts of not taking into account the environmental impact of the of their production process which has witnessed several civil rights demonstrations in many countries including Mexico and United states. To some extent, some city councils have even gone ahead and denied permits to Wal-Mart in their project. This is because such new constructions are threats to the environment bring about traffic congestion and pose a security threat to such cities (Miner, 2006).
There are other practices that the world-leading employer is still being criticized. These includes when the company reported a net income of over $ 11 billion. Despite the high net income, the company was facing a persistent wage-law violation through low pay to workers, in adequate health care to its employees, exploitation of workers, as well as the retailer’s anti-union stance. These raises several research questions as to whether the Company is for the welfare of the society or not (Shawn 2006).
There are other practices that the world-leading employer is still being criticized. These includes when the company reported a net income of over $ 11 billion. Despite the high net income, the company was facing a persistent wage-law violation through low pay to workers, in adequate health care to its employees, exploitation of workers, as well as the retailer’s anti-union stance. These raises several research questions as to whether the Company is for the welfare of the society or not (Shawn 2006).
Wal-Mart’s Business Practices
Wal-Mart was ranked as the richest business in the world in the 2012; it is also the leading single employer in the U.S apart from the federal government and the largest employer on earth (Griffin & Moorhead, 2011, p. 376). Although the organization is respected internationally, its employees complain of unsuitable working conditions, gender-based discriminations, low wages, violation of employees’ rights and harassment. Consequently, employees have filed lawsuits against the organization (Griffin & Moorhead, 2011, p. 376). Individuals working for Wal-Mart have negative perceptions about interpersonal justice, procedural justice and informational justice.
The treatment of employees is part of the organizational behavior and it can in a great deal influence the output of the firm. Low wages for instance are likely to see the most efficient workers moving out of the organization. Those who are left are of less efficient and the end result if production at a less efficient part of the Iso-quant. This wills ultimately affect the business as they waste resources and their gains are much less than if they produced efficiently.
Wal-Mart business has also been accused of gender-based discrimination that has seen many demonstrations in most of the world especially in those nations with informed citizens. What this could mean to a business that is competing with others in the market is a reduction in its market share. Some of the nations after realizing such an immense opposition may turn political and the business could be banned. All employees are equal and should receive good health care and a work leave since it refreshes the workers and thus rejuvenating there output. Its health care for instance has been controversial like in 2006, the organization introduces a part-time health care which to many of the workers and the labour organization was not a good practice to the people who make the organization excel.
Wal-Mart is also renowned of its anti-union practice of its workers. They are always against the formation of the union where the workers can fight for their terms of service and working condition (Haiven, 2013). This means that the workers of Wal-Mart largely remain exploited making them more of slaves than free men and women. The question then comes to picture is whether the Wal-Mart business can really help in economic growth of a nation other than US since if workers are exploited through low wages and that the company also evades tax, how can be trusted to help a nation grow. It is likely to repatriate profits to US than helping in developing another country.
The research questions related to the organizational behavior include:
1. How is Wal-Mart sustaining its competitive advantage when it is not treating its employees fairly?
2. Can Wal-Mart’s culture of gender- based discrimination ensure sustained expansion in other countries?
3. Should Wal-Mart allow its employees to be unionized to enhance fairness, reduce worker strikes and ensure sustained customer satisfaction?
The rationale of selecting Wal-Mart’s business practice is due to the outcry of media news about how it treats its employees. According to Al-Jazeera, Wal-Mart has organizational behavior characterized by greedy business practices and exploitation (2012, p, 1). Furthermore, it is a single leading private employer in the world; therefore, researching about the nature and behavior of its employees in addition to how it treats them is reasonable.At the end of the research, the strategies used by the Wal-Mart to remain competitive amid employee outcry will be understood. Secondly, the research findings will indicate whether the organization plans to improve employees’ working conditions, terms of service and reduce gender-based violence.
Conclusion
Wal-Mart business has adopted strategies that could result to non-cooperative game, in game theory. The strategies are against the fundamental human right, non-sustainable as they violate environmental protection and not welfare sensitive to its workforce. The major concern is the long run effects of the civil unrest and the display on the growth of the business in the world arena. There is need for the management to incorporate the critics view for better performance of the business, instead of counter reaction strategies, which increases long-run overhead.
Reference
Al-Jazeera. (2012, 14th December). Wal-Mart’s Horrific Treatment of Workers is Too Big to Ignore. Web. Accessed on 13 March 2015.
Buckley, Frank; McShane, Jamie; Bhatnagar, Parija (April 7, 2004). No smiles for Walmart in California. CNN. Retrieved 14 March 2015.
Griffin, R. and Moorhead, G. (2011). Organizational Behavior. New Jersey: Cengage Learning
Haiven, M. (2013). Walmart, Financialization and the Cultural Politics of Securitization: Cultural Politics, 9 (3): 239-262.
Kabel, Marcus. “Wal-Mart.” The Washington. July 18, 2006. Retrieved on 14 March 2015.
Miner, J. B. (2006). Organizational Behavior Three: Historical origins, Theoretical Foundations and the Future. New York: M. E Sharpe Inc.
Sellers, Jeff M. (April 22, 2005). “Women against Wal-Mart.” Christianity Today.
Shahzad, F., Luqman, R.A., Khan, A. R. & Shabbir, L. (2012). Impact of Organizational Culture on Organizational Performance: An Overview: Interdisciplinary Journal of Contemporary Research in Business, 3(9): 975-985.
Taylor, Peter Shawn. (February 20, 2006). “Freedom to shop”. National Post. Retrieved on 13 March 2015.
