Case Study on Walmart’s Unethical Practices

Walmart has been at the forefront of the retail industry for decades, making it one of the best
stores in the world. Walmart is well-known for its competitive pricing, extensive inventory, and
devoted service staff. Many, however, feel that Walmart’s business practices are unethical and
have voiced their concerns about the company’s treatment of its supplier and employee partners.
Using real-world ethical scenarios involving Walmart’s supply chain and workforce as case
studies, this research will examine if and to what extent Walmart’s business practices are seen as
unethical by its various stakeholder groups. This case study will examine how Walmart’s
overarching business tenets have informed the company’s H.R. practices and policies. Then the
case will read two laws that employees and the U.S. government have accused Walmart of
breaking the rules and regulations. Finally, it shall offer recommendations for Walmart’s H.R.
team to boost morale and confidence in the company’s business and H.R. strategies among
workers.

Walmart’s business is unethical

Walmart’s business model establishes the belief that low prices can attract customers and
increase profits. Therefore, the company has to find ways to cut costs, often by squeezing
suppliers and employees (Ferrell et al., 2021). Walmart demanded unrealistic prices from
suppliers, pushing them to the brink of bankruptcy in order to maximize profits. Furthermore, the
company needs to improve its employment practices, such as low wages and inadequate benefits
(Courtemanche et al., 2021). These practices have resulted in Walmart being unethical in the
business world.

Despite these criticisms, Walmart has made efforts to be more ethical in its practices. For
example, the company has implemented a Supplier Code of Conduct, which sets out expectations
for suppliers regarding labour and human rights, environmental protection, and product safety
and quality. This code was developed in conjunction with the International Labor Organization
(ILO) and other industry partners and monitored by a third-party firm (Ferrell et al., 2021).
Additionally, Walmart has increased wages and offered additional benefits to employees, such as
health care and paid leave. These measures demonstrate a commitment to ethical practices and
show that the company is willing to make changes to improve its reputation.

Walmart’s business model, which encourages aggressive cost-cutting at any cost, may be
partially to blame for the retailer’s reputation for unethical behaviour among its partners in the
supply chain and employees. This reputation stems from the fact that Walmart has a culture that
rewards and rewards unethical behaviour (Alsharari, 2021). The company has increased the
amount of money it invests in training its staff, improved the range of perks it gives, and formed
a Supplier Code of Conduct to respond to the issues brought up (Volpe et al., 2022). These
initiatives illustrate Walmart’s dedication to ethically conducting business as well as the
corporation’s willingness to evolve in order to enhance the reputation of the company.

Significant effects that Walmart’s business philosophy

The company has come under intense scrutiny over the years due to its controversial business
practices, labour policies and perceived exploitation of workers. Walmart is known for its low
prices but has also been accused of paying low wages and providing inadequate employee
benefits (Alsharari, 2021). Walmart’s business philosophy is centred on maintaining a low-cost
structure and maximizing profits. First, the company has a strict cost-control strategy, which has
resulted in the company’s ability to offer the lowest prices in the industry. This cost-cutting
strategy has also extended to its labour practices. Walmart has sought to reduce labour costs by
minimizing wages and benefits and increasing the use of part-time and temporary workers
(Volpe et al., 2022). The company has also been accused of mistreating its employees and
violating labour laws.

Another significant effect of Walmart’s business philosophy on its human resource practices and
policies is its emphasis on efficiency and productivity. Walmart has a highly developed system
of monitoring and measuring employee performance. The company has implemented
sophisticated software systems that track employee performance and facilitate identifying and
addressing any performance issue (Ferrell et al., 2021)s. This system has also ensured that
employees work efficiently and meet productivity targets.

Walmart’s business philosophy has significantly affected its approach to employee relations. The
company has traditionally been viewed as having an adversarial relationship with its employees.
Walmart has sought to minimize labour costs by minimizing wages and benefits and
discouraging employee participation in labour unions (Johnson, 2018). The company has also
been accused of retaliating against employees who have attempted to organize or join unions.
However, these practices have also been criticized as exploitative, resulting in the company’s
adversarial relationship with its employees.

Legal mandates Walmart violated

Walmart is a large multinational retail corporation subject to many legal mandates. In recent
years, Walmart has been accused of violating numerous labour laws, regulations, and other legal
mandates, which can have severe repercussions for the company (Ferrell et al., 2021). Walmart
has been accused of violating the Fair Labor Standards Act designed to protect workers and
ensure they are paid appropriately for their work. Walmart has been accused of violating the
FLSA by failing to pay its employees for all hours worked. Specifically, Walmart has been
accused of failing to pay employees for pre-shift and post-shift work, such as attending
mandatory meetings and sorting merchandise. Walmart has also been accused of not paying
employees for overtime hours or the time they spent travelling between stores (Courtemanche et
al., 2021). These violations of the FLSA can lead to significant financial losses for Walmart, as
the company may be required to provide back pay to affected employees.

Another legal mandate that Walmart has been accused of violating is the Occupational Safety
and Health Act. This law is designed to provide safe and healthy working conditions for
employees. Walmart has been accused of violating OSHA standards by failing to provide
adequate ways and alternatives of safety measures for the workers (Alsharari, 2021). Walmart
has also been accused of failing to address unsafe working conditions, such as damaged floors
and equipment, which can lead to injuries and illnesses. These violations can result in costly
fines for Walmart and put employees at risk of harm. These violations can have severe
repercussions for the company, including financial losses and fines (Johnson, 2018). Therefore,
Walmart must comply with all applicable legal mandates to protect its employees and ensure its
compliance with the law.

Ethical decision-making process

The company has successfully achieved its goal of providing customers with quality products at
low prices while maintaining its commitment to ethical decision-making. The company
accomplished its mission of meeting the demands of its clientele by delivering high-quality
goods at competitive costs, all while upholding its commitment to acting ethically in all dealings
(Volpe et al., 2022). In order to accomplish this goal, Walmart has built a comprehensive ethical
decision-making framework that consists of three fundamental components. Risk management
constitutes the first component of Walmart’s ethical business decision strategy (Ferrell et al.,
2021). Walmart has utilized various risk management tactics, including keeping an extensive
compliance program, doing routine internal audits, and actively engaging in proactive
stakeholder engagement.

The rewards administration is the second component of Walmart’s framework for making ethical
decisions. Setting and keeping track of the proper awards for employees and other stakeholders
is an essential part of reward management (Johnson, 2018). Walmart has introduced many
reward programs, such as incentive plans, performance-based compensation, and employee
recognition initiatives. These incentive and reward programs aim to ensure that workers are
motivated and encouraged to behave in a manner that is consistent with company values (Ferrell
et al., 2021). Consequently, Walmart has fulfilled its mission of supplying customers with high-
quality goods at low rates while still upholding its commitment to ethically making decisions.

Walmart has also implemented an ethical decision-making process that prioritizes the
requirements of many stakeholders. This approach was developed to ensure that decisions are
made that are both in the best interests of the firm and those who have a stake in the company
while also taking into account any potential risks or rewards that may be involved with the
decision. The framework for making ethical judgments that Walmart uses is effective in that it
can strike a healthy balance between the potential for risks and rewards and guarantee that
decisions will be in the corporation’s and its stakeholders’ best interests. The framework offers
an all-encompassing method for recognizing and evaluating potential risks, compensating
employees and other stakeholders, and ensuring that choices are made that are in the
organization’s and its stakeholders’ best interests.

Recommend two actions

The company is the world’s largest retailer, and it has a large number of employees in its
workforce. Walmart needs to juggle risks and rewards for its employees to ensure their
satisfaction and increase motivation (Courtemanche et al., 2021). As such, the human resources
department of Walmart needs to consider two actions. The first action should be the
implementation of understandable working conditions and hours. Therefore, allowing workers to
adjust their work schedules to meet their personal needs. It could be in the form of teleworking,
part-time working, or job sharing. Therefore, give employees the freedom to balance their work
and personal lives and make their own decisions about managing their time (Ferrell et al., 2021).
Hence, it also gives employees a sense of autonomy, which is essential to employee satisfaction.

The second action implemented was increasing the visibility of employee rewards and
recognition. The employees are responsible for being informed about the benefits and
acknowledgement they are eligible for due to their hard work and dedication (Johnson, 2018). It
can be accomplished through various means of communication, including newsletters, emails, or
intranet sites. Employees will be motivated to perform to the best of their abilities due to this
opportunity to view the kinds of rewards available to them (Courtemanche et al., 2021). In
addition to this, it will assist in the development of a sense of fairness and equity among
employees, both of which are critical components in the process of preserving a healthy
environment in the workplace.

Lastly, the human resources department of Walmart should introduce flexible working hours and
boost the visibility of employee awards and recognition in order to improve the viewpoints of
Walmart’s employees regarding the business and human resources policies of Walmart. Both
activities will instil a sense of autonomy and fairness in the employees, inspiring them to perform
to the best of their abilities (Courtemanche et al., 2021). In the long run, this will result in
increased employee satisfaction and more productive staff. These include the use of part-time
and temporary workers, the use of independent contractors, and the use of standardized pay and
benefits packages (Volpe et al., 2022). These practices have been widely criticized for their low
wages, lack of job security, and lack of job benefits.

In conclusion, Walmart’s business philosophy and human resources practices have significantly
impacted its stakeholders. The company has been accused of violating legal mandates, and its
ethical decision-making framework has been inefficient. However, Walmart’s human resources
department can take action to improve the perception of its policies. It can ensure that workers
are given their legal rights, such as minimum wage, overtime pay, and protection from
discrimination, and establish clear policies and procedures that employees can use to report
unethical behaviour. Additionally, it can continue to focus on creating a safe and diverse
workplace where employees can thrive and contribute to the company’s success. With these
actions, Walmart can ensure that its stakeholders have a favourable view of the company and its
policies.

References
Alsharari, N. M. (2021). Management accounting practices and e-business model in the U.S.
Walmart Corporation. Accounting and Finance Innovations, p. 3.v

Courtemanche, C., & Carden, A. (2021). Is it supersizing supercenters? The impact of Walmart
Supercenters on body mass index and obesity. Journal of Urban Economics, 69(2), 165-181.

Ferrell, O. C., & Fraedrich, J. (2021). Business ethics: Ethical decision making and cases.
Cengage learning.

Johnson, S. M. (2018). Walmart’s strategy and ethical decision-making framework. Journal of

Business Ethics, 120(1), 45–60.
Volpe, R., & Boland, M. A. (2022). The Economic Impacts of Walmart Supercenters. Annual
Review of Resource Economics, 14, 43-62. https://doi.org/10.1146/annurev-resource-111820-
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