When walking through the aisles of Wal-Mart, almost everything is at a lower price than compared to other stores. For instance, Wal-Mart acknowledges that there will be things in their store that is priced higher than in other stores, therefore Wal-Mart carries out a price match deal to give the customer the low price he or she wants. Price matching is receiving the low price from the other store but buying the item at Wal-Mart. Customers can stretch the value of the dollar when shopping at Wal-Mart. It is estimated that, “Wal-Mart can save a family more than $2,000 a year compared with alternative retailers” (Hoenig 47).
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.
According to philosopher Milton Friedman the only Corporate Gregarious responsibility a Corporation has is to increment profits for its stockholders. Through a utilitarian perspective, we can visually perceive that Wal-Mart is acting in a way to produce the greatest possible balance of good over dissatisfaction for their stockholders. Wal-Mart upholds the fiduciary obligations to their stockholders by not incrementing wages of their employees, instead they take the sum of currency and return it back to their stockholders and shareholders such as customers and suppliers. Wal-Mart engenders the bliss 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 engenders the greatest amount of good for the people who are the primary stockholders of the corporation.
Their motto of “Always low prices, always” have created soaring profits at the expense of their employees. Most Americans loves the convenience and low prices offered by Wal-Mart. Do Americans know what it actually costs for Wal-Mart to keep prices so low? With thousands of lawsuits filed each year it is a wonder why Wal-Mart refuses to change its practices. It is fairly safe to say that Sam Walton would not approve of how his company has been completely changed from its original intent by such a large margin.
The other side argues that Wal-Mart only became successful by killing off all their competition with their low prices. The only thing that matters to those that like the company is that they save consumers money through their low prices, but you cannot tell this to all the owners of smaller stores that Wal-Mart has put out of business, such as Gary E. Hawkins. The CEO of a family-owned supermarket in New York, he said "It will be a sad day in this country if we wake up one morning and all we find is a Wal-Mart on every corner." This is obviously a conflict of different interests, and it is unclear as to whether Wal-Mart is beneficial or harmful to the economy. Wal-Mart grew to its enormous size mainly because of the low prices it offers its consumers, which seems to be an obvious benefit to the economy.
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.
It is contended that a business should only focus on making profit and most of the businesses think business ethics costs too much to put up with, but being ethical and socially responsible is necessary for companies. Business ethics is a group of moral principles in the business environment. Many factors of business environment can cause corporates to act unethical such as competition, the urge to make profit and selfishness. Generating revenue is vital for corporates, that’s unquestionable, but competi... ... middle of paper ... ...In third world countries where business ethics are ignored, the gap between the rich and the poor is widened every day, and as a result, their bonds between the community are weak.
According to Gates, this will bring in increased revenue to companies, and make poor people more successful. I think that Gates’ system of creative capitalism is severely flawed. Firstly, Bill Gates did not invent the idea of companies searching for new markets to sell and produce their goods in. The Walmart ad on the top of this paper is proof of that fact. Walmart (which operates in our “standard” capitalism system) could no longer maintain its profit margins with the domestically produced goods it was buying.
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.
No one has a "right" to business success or a "right" to be protected from competitors through government intervention. One only has a right to try to compete through voluntary trade. In a free economy, companies that offer the best value for the dollar win and the losers invest their money elsewhere. It is also true that Wal-Mart pays lower wages than many unionized stores. But it must offer a market wage or risk its employees going elsewhere, and it deals with employees on a voluntary basis.