Question

Managing the Ethical Implications of the Big BoxWalmart has had a tremendous impact upon our society. Its pervasive presence has affected communities all over the United States. The first Walmart store opened in 1962 in Rogers, Arkansas. By 1970, there were 38 stores with 1,500 “associates” (employees) and sales of $44.2 million. In 1990, Walmart became the nation’s number one retailer. In 2002, Walmart had the biggest single-day sales in history: $1.43 billion on the day after Thanksgiving. Today, Walmart is the world’s largest retailer with 2.1 million “associates” in more than 8,800 store and club locations in 15 countries and sales of $405 billion in the fiscal year ending January 31, 2010. Because of this impact, Walmart has been confronted with many ethical challenges.One of the challenges the huge retailer has faced is to have a positive impact upon the communities it enters. Whether Walmart has acted ethically may be a matter of perspective. Certainly, Walmart does much for the communities in which it operates, but it has also faced criticism than its economic impact limits the ability of local businesses to survive.By the end of the fiscal year ending January 31, 2010, the number of stores and distribution centers had grown from 3,368 to over 3,600, and the number of associates in the United States had grown from 1.04 million to 1.4 million. Here are the figures in the United States alone: Walmart and the Walmart foundation gave more than $467 million in cash and in-kind gifts in fiscal year ending 2010 (FYE ’10) – an $89 million increase over the previous year’s giving. At a time when food banks are being accessed more than ever, Walmart doubled donations to Feeding America, giving more than 127 million pounds of nutritious food to U.S. food banks, the equivalent of nearly 100 million meals (Walmart Corporate, n.d.-b). Walmart does fund a number of programs to support communities and local nonprofit organizations. In 2004, they claimed to have given the following:More than $88 million in community grantsMore than $265 million in 15 years for Children’s Miracle Network (CMN)More than $184 million in 19 years to United Way chapters$80 million in scholarships since 1979$1.7 million in Environmental Grants$3.1 million in Volunteerism Always Pays grants$20 million raised and contributed during the 2002 holidaysIn his book, In Sam We Trust, Bob Ortega (1998) suggested that Walmart is devouring America. Among other issues, Representative George Miller’s (D-CA) (2004) 25-page report by the Democratic Staff of the Committee on Education and the Workforce, U.S. House of Representatives, suggests that Walmart’s low wages and unaffordable of unavailable health care cost taxpayers money. In recent years, the downtown areas of Managing the Ethical Implications of the Big BoxWalmart has had a tremendous impact upon our society. Its pervasive presence has affected communities all over the United States. The first Walmart store opened in 1962 in Rogers, Arkansas. By 1970, there were 38 stores with 1,500 “associates” (employees) and sales of $44.2 million. In 1990, Walmart became the nation’s number one retailer. In 2002, Walmart had the biggest single-day sales in history: $1.43 billion on the day after Thanksgiving. Today, Walmart is the world’s largest retailer with 2.1 million “associates” in more than 8,800 store and club locations in 15 countries and sales of $405 billion in the fiscal year ending January 31, 2010. Because of this impact, Walmart has been confronted with many ethical challenges.One of the challenges the huge retailer has faced is to have a positive impact upon the communities it enters. Whether Walmart has acted ethically may be a matter of perspective. Certainly, Walmart does much for the communities in which it operates, but it has also faced criticism than its economic impact limits the ability of local businesses to survive.By the end of the fiscal year ending January 31, 2010, the number of stores and distribution centers had grown from 3,368 to over 3,600, and the number of associates in the United States had grown from 1.04 million to 1.4 million. Here are the figures in the United States alone: Walmart and the Walmart foundation gave more than $467 million in cash and in-kind gifts in fiscal year ending 2010 (FYE ’10) – an $89 million increase over the previous year’s giving. At a time when food banks are being accessed more than ever, Walmart doubled donations to Feeding America, giving more than 127 million pounds of nutritious food to U.S. food banks, the equivalent of nearly 100 million meals (Walmart Corporate, n.d.-b). Walmart does fund a number of programs to support communities and local nonprofit organizations. In 2004, they claimed to have given the following:More than $88 million in community grantsMore than $265 million in 15 years for Children’s Miracle Network (CMN)More than $184 million in 19 years to United Way chapters$80 million in scholarships since 1979$1.7 million in Environmental Grants$3.1 million in Volunteerism Always Pays grants$20 million raised and contributed during the 2002 holidaysIn his book, In Sam We Trust, Bob Ortega (1998) suggested that Walmart is devouring America. Among other issues, Representative George Miller’s (D-CA) (2004) 25-page report by the Democratic Staff of the Committee on Education and the Workforce, U.S. House of Representatives, suggests that Walmart’s low wages and unaffordable of unavailable health care cost taxpayers money. In recent years, the downtown areas of
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Managing the Ethical Implications of the Big BoxWalmart has had a tremendous impact upon our society. Its pervasive presence has affected communities all over the United States. The first Walmart store opened in 1962 in Rogers, Arkansas. By 1970, there were 38 stores with 1,500 “associates” (employees) and sales of $44.2 million. In 1990, Walmart became the nation’s number one retailer. In 2002, Walmart had the biggest single-day sales in history: $1.43 billion on the day after Thanksgiving. Today, Walmart is the world’s largest retailer with 2.1 million “associates” in more than 8,800 store and club locations in 15 countries and sales of $405 billion in the fiscal year ending January 31, 2010. Because of this impact, Walmart has been confronted with many ethical challenges.One of the challenges the huge retailer has faced is to have a positive impact upon the communities it enters. Whether Walmart has acted ethically may be a matter of perspective. Certainly, Walmart does much for the communities in which it operates, but it has also faced criticism than its economic impact limits the ability of local businesses to survive.By the end of the fiscal year ending January 31, 2010, the number of stores and distribution centers had grown from 3,368 to over 3,600, and the number of associates in the United States had grown from 1.04 million to 1.4 million. Here are the figures in the United States alone: Walmart and the Walmart foundation gave more than $467 million in cash and in-kind gifts in fiscal year ending 2010 (FYE ’10) – an $89 million increase over the previous year’s giving. At a time when food banks are being accessed more than ever, Walmart doubled donations to Feeding America, giving more than 127 million pounds of nutritious food to U.S. food banks, the equivalent of nearly 100 million meals (Walmart Corporate, n.d.-b). Walmart does fund a number of programs to support communities and local nonprofit organizations. In 2004, they claimed to have given the following:More than $88 million in community grantsMore than $265 million in 15 years for Children’s Miracle Network (CMN)More than $184 million in 19 years to United Way chapters$80 million in scholarships since 1979$1.7 million in Environmental Grants$3.1 million in Volunteerism Always Pays grants$20 million raised and contributed during the 2002 holidaysIn his book, In Sam We Trust, Bob Ortega (1998) suggested that Walmart is devouring America. Among other issues, Representative George Miller’s (D-CA) (2004) 25-page report by the Democratic Staff of the Committee on Education and the Workforce, U.S. House of Representatives, suggests that Walmart’s low wages and unaffordable of unavailable health care cost taxpayers money. In recent years, the downtown areas of Managing the Ethical Implications of the Big BoxWalmart has had a tremendous impact upon our society. Its pervasive presence has affected communities all over the United States. The first Walmart store opened in 1962 in Rogers, Arkansas. By 1970, there were 38 stores with 1,500 “associates” (employees) and sales of $44.2 million. In 1990, Walmart became the nation’s number one retailer. In 2002, Walmart had the biggest single-day sales in history: $1.43 billion on the day after Thanksgiving. Today, Walmart is the world’s largest retailer with 2.1 million “associates” in more than 8,800 store and club locations in 15 countries and sales of $405 billion in the fiscal year ending January 31, 2010. Because of this impact, Walmart has been confronted with many ethical challenges.One of the challenges the huge retailer has faced is to have a positive impact upon the communities it enters. Whether Walmart has acted ethically may be a matter of perspective. Certainly, Walmart does much for the communities in which it operates, but it has also faced criticism than its economic impact limits the ability of local businesses to survive.By the end of the fiscal year ending January 31, 2010, the number of stores and distribution centers had grown from 3,368 to over 3,600, and the number of associates in the United States had grown from 1.04 million to 1.4 million. Here are the figures in the United States alone: Walmart and the Walmart foundation gave more than $467 million in cash and in-kind gifts in fiscal year ending 2010 (FYE ’10) – an $89 million increase over the previous year’s giving. At a time when food banks are being accessed more than ever, Walmart doubled donations to Feeding America, giving more than 127 million pounds of nutritious food to U.S. food banks, the equivalent of nearly 100 million meals (Walmart Corporate, n.d.-b). Walmart does fund a number of programs to support communities and local nonprofit organizations. In 2004, they claimed to have given the following:More than $88 million in community grantsMore than $265 million in 15 years for Children’s Miracle Network (CMN)More than $184 million in 19 years to United Way chapters$80 million in scholarships since 1979$1.7 million in Environmental Grants$3.1 million in Volunteerism Always Pays grants$20 million raised and contributed during the 2002 holidaysIn his book, In Sam We Trust, Bob Ortega (1998) suggested that Walmart is devouring America. Among other issues, Representative George Miller’s (D-CA) (2004) 25-page report by the Democratic Staff of the Committee on Education and the Workforce, U.S. House of Representatives, suggests that Walmart’s low wages and unaffordable of unavailable health care cost taxpayers money. In recent years, the downtown areas of

many towns have been suffering as communities have become increasingly suburban. According to critics, Walmart often contributes to the decline of the downtown of small towns because they build stores at the outskirts of towns, drawing traffic away from the downtown areas.Small towns all over the country have felt the impact of Walmart. This is not a new phenomenon. Walmart began having a tremendous impact on communities in the 1980s. For example, by the late 1980s, Iowa had felt the effects of the growing retail giant. According to an article by Edward O. Welles (1993), “Iowa towns within a 20-mile radius felt [Walmart’s] pull. Their retail sales declined by 17.6% after five years” (para. 13).But it wasn’t just the retail stores that suffered. The specialty stores also felt the impact. The only hope for small merchants was to find a niche. Because of Walmart’s size and strength with suppliers (which has grown tremendously since the early 1980s), the burden has been on the small business owner to change and adapt. Even if they had successful businesses, providing the same goods and products for as long as 50 years, small merchants have been forced to adapt to survive as Walmart enters their territory.The impact can be brutal for business owners. “In exurban Sycamore, Brown County Market lost 40% of its sales after a Wal-Mart Supercenter opened in nearby DeKalb in the late 1990s” (Murphy, 2004, para. 8). The store’s owner laments one of the issues: “’I pay my grocery clerks $13 an hour plus benefits. Wal-Mart pays $7 an hour with no benefits.’ Says owner Daniel Brown. ‘It’s hard for me to compete against that’” (Murphy, 2004, para. 9). It is interesting to note, though, that 7 years later, Walmart’s corporate fact sheet (Walmart Corporate, n.d.-a) states that the average, full-time hourly wage for Walmart stores is $11.75. The fact sheet indicates it is even higher in urban areas and that associates can receive performance-based bonuses.Yet, Walmart has grown to be such a behemoth exactly because it has given customers what they wanted (or at least thought they wanted) – low prices and convenience. One can head to the local Walmart and do virtually all of one’s shopping in one huge building. It is often possible to find a reasonable substitution for those specialty items that can’t be found at Walmart. But if low prices are causing other local merchants to go out of business, are the conveniences that Walmart provides worthwhile in the long run? There is a whole other side to this community economic impact in terms of the economic spin-off of a dollar spent at Walmart versus a dollar spent at other local merchants. There have been myriad stories about low wages and minimal benefits provided to Walmart “associates,” not to mention the hiring of illegal aliens for the fact that China has become a major supplier for the retail giant that used to tout that it only carried products that were made in America.In 2004, Walmart’s average employee worked a 30-hour week and earned about $11,700 a year, which was nearly $2,000 below the poverty line for a family of three (Miller, 2004; Wal-Mart Watch, n.d.). Only 38% of “associates” have company-provided health coverage – as compared to the national average of over 60% (Miller, 2004; United Food and Commercial Workers Union [UFCW] Local 227, n.d.; UFCW Local 770, n.d.; Wal-Mart Watch, n.d.). According to the United Food and Commercial Workers (UFCW) International Union Local 227 (n.d.), “Wal-Mart has increased the premium cost for workers by over 200% since 1993 – medical care inflation only went up 50% in the same period.”Walmart claims to contribute to the well-being of communities. Between January 1996, the year Walmart began posting pictures of missing children in the lobbies of Walmart facilities, and January 2010, 10,409 children have been featured, and 8,716 have been recov3ered. It is clear that Walmart does much in the way of scholarships and philanthropy in addition to offering convenience and low prices. Walmart’s rhetoric centers on the three basic beliefs that Sam Walton established in 1962:1. Respect for the Individual2. Service to Our Customers3. Strive for ExcellenceDiscussion Questions – Choose ONE1. What does it mean for an organization to be ethical in its communication and practices?2. Does Walmart’s rhetoric communicate a different message than its actions?3. Are Walmart’s persuasive tactics concerning its value to a community ethical in approach and intention?4. How would you characterize the culture of Walmart?(Miller, 2004; Wal-Mart Watch, n.d.). Only 38% of “associates” have company-provided health coverage – as compared to the national average of over 60% (Miller, 2004; United Food

Answer 1

1) What does it mean for an organization to be ethical in its communication and practices?

The narrative the Walmart is driving is that they are doing a lot of things (Donations and handouts to charities/ care organizations), to help the community, but in reality their operations are costing the community dearly in the following ways

• They put a lot of pressure on local retailers, which eventually shut down as they cannot compete with Walmart
• They underpay their employees, whose families eventually use the money that Walmart pays as charity, so it is all a huge cycle and similar to the "chicken and egg probelm"

2) Does Walmart’s rhetoric communicate a different message than its actions?

Walmart has the following Rhetoric

1. Respect for the Individual

2. Service to Our Customers

3. Strive for Excellence

While it is true to its rhetoric when it comes to the internal operations at Walmart, the rhetoric does not hold true when it comes to the external stakeholders

They do not respect their competitors and drive them out of business, thus causing a lot of damage

3. Are Walmart’s persuasive tactics concerning its value to a community ethical in approach and intention?

They might be ethical in approach as they are trying to give back to the community, but in the first place they have done a lot of damage to the community (intentionally or unintentionally), and now are trying to neutralize those misdeeds by giving back a few things

4. How would you characterize the culture of Walmart?

Walmart has a very capitalistic culture, as they are only concerned about their profits and bottomline, without giving a lot of focus on the outside stakeholders like their employees and the outside community.

They severely under pay their employees and do not even offer health benefits, yet people come to walmart because of the sheer scale of operations that they have established