According to philosopher Milton Friedman the only Corporate Social responsibility a Corporation has is to increase profits for its stockholders. Through a utilitarian perspective, we can see that Wal-Mart is acts in a way to product the greatest possible balance of good over dissatisfaction for their stockholders. Wal-Mart upholds the fiduciary duties to their stockholders by not increasing wages of their employees, instead they take the sum of money and return it back to their stockholders and shareholders such as customers and suppliers. Wal-Mart creates the happiness for the amount of people who invest in the company. Ethics is about the consequences of an action and the consequence of Wal-Mart’s actions creates the greatest amount of good for the people who are the primary stockholders of the corporation.
Wal-Mart’s Low Prices “Wal-Mart is the largest private employer in the nation and the world’s largest retailer. With 1.6 million workers, 1.3 million in the United States and 300,000 offshore” (Miller, 2006). Thousands of Wal-Mart stores across the United States of America are best known for their slogan of save money live better. Wal-Mart retailers are regarded by the American public for the place to go to find everything from fishing gear to groceries at the lowest prices. However, to obtain these low prices, Wal-Mart must cut expenses, which it does across the board, including the pay and benefits to its workers in the United States.
Wal-Mart is an international phenomenon. The store guarantees low prices for living better, despite the controversy about what Wal-Mart is really like. Americans perceive Wal-Mart as a store that is jeopardizing the economy but in fact, Wal-Mart is one of the most successful providers to many people around the world. America can benefit greatly as a result of Wal-Mart because of their convenience for the shoppers, low prices, and amount of jobs provided. According to a documentary on Wal-Mart, the company can be described as a “one-stop-shop” (00:05:29-00:05:32).
Associates everyday life and survival suffers from working at Walmart. The average employee makes 25% less than the average retail worker. “Anthony Goytia earns $9.60 an hour which gives his family 12,000 dollars a year to live off of. They rely on state run health insurance and food stamps.” Communities that allow Wal-Mart into their town get tax breaks and low cost financing as well as grants from state and local government which in turn further promotes the problem because even though jobs are created they are not jobs anyone can sustain a family on. Walmart is the largest American corporation and the owners are among America’s richest families.
When Wal-Mart enters a new location it relies on bully techniques to weed out its smaller competition leaving consumers little to no choice but to shop as well as be employed at Wal-Mart. The majority of Wal-Mart employees opt-out of the health benefits package due to the high premium cost and large deductibles leaving them without coverage or seeking state aid. ("Store Wars: When Wal-Mart Comes to Town") Wal-Mart is the largest retailer in the world with over half of their employees averaging wages that are below the Federal poverty line for a family of four. Wal-Mart has become a household name with many positive attributes but they have been riddled with a large amount of negatives. Their motto of “Always low prices, always” have created soaring profits at the expense of their employees.
Wal-Mart has quickly become the world's largest company with its one stop shopping convenience and low prices. There is no debating that Wal-Mart is a dominating force in the American and world economy. However, there is a clash between two different views of how Wal-Mart achieved this status. The defenders of Wal-Mart say that they are so successful because they are market savvy and make good economic decisions. The other side argues that Wal-Mart only became successful by killing off all their competition with their low prices.
However, Wal-Mart’s management which initially portrayed itself as the lowest cost provider had to change this policy partially because it becam... ... middle of paper ... ...r relative to its suppliers, Wal-Mart was able to implement and enforce radical cost-cutting measures; these included saving realized by eliminating manufacturer’s representatives from negotiations with suppliers; by making its vendors pay for communicating expenses. Wal-Mart’s decentralized, incentive driven corporate cultural program is also a major asset in reducing costs for, despite non-unionization, employees assisted in realizing savings and in keeping ‘shrinking’ costs below their competitors. This program also raises employee satisfaction, and probably reduces employee turnover (thereby reducing costs for training new workers), and boosts customer satisfaction. Wal-Mart’s hihgly-automated two-step hub distribution network, involving greater supplier participation, and usage of techniques such as ‘cross-docking’ enabled the company to utilize even quicker inventory control (resembling a manufacturing firm’s JIT). Finally, even the location of the distribution centers and stores, which were grouped together, enhanced the speed with which inventory was managed.
The pay that employees get is the price they must pay for low priced merchandise. Because of the minimal pay to employees, Wal-Mart strengthens its’ consumer buying power. Giving the American shoppers the savings they need, Wal-Mart’s has ultimately been them successful. Wal-Mart has potentially wiped out the middle class as an employer, but the employees can now work and ... ... middle of paper ... .... Food 4 less lets the government and taxpayers deal with employee’s financial and medical assistance. Taxpayers are paying the price for Wal-Mart and Food 4 Less.
Wal-Mart, the corporate retail giant known for promising customers “Always low prices, Always!” has been both praised and attacked in regards of financial treatment to shareholders and stakeholders respectively. Investors that own shares of Wal-Mart are content with the company, as its decision to annually spend $7.6 billion to repurchase stock is seen as a strategic move in increasing shareholder wealth. On the other hand, Wal-Mart has received scrutiny for violating corporate social responsibility, in the waking trend of its employees earning wages below the poverty level and the impact this has on the economy. It can be argued that Wal-Mart is following the free market libertarianism model by placing priority on the fiduciary duty of satisfying shareholders. Wal-Mart isn’t interfering with the free market by placing primary concern to employees; instead, it is taking direct responsibility of shareholder wealth: in this case, in the form of spending $7.6 billion to repurchase Wal-Mart stock.
Which one is better Buy Now: Wal-Mart Stores, Inc. vs. Costco Wholesale Corporation? Costco is doing better, but Wal-Mart stock is much inexpensive. Which one is a better buy right now? Here are two different retailers with two different strategies. The alternative norms are that Costco operations are entirely based on the warehouse model and membership fees offer customer more of an economic advantage to customers than Wal-Mart everyday low prices and flexible payment with suppliers.