Walmart Store Analysis

Wal-Mart, Always Low Prices, Always. It is well kat oncen that bingle of the great keys to Wal-Marts formidable success is its move-than- impression be of doing business sector. Wages in particular argon as low as can be. Minimum locks and minimum benefits thats the way Wal-Mart stays revolutionary competitive.This report examines the state of Wal-Marts business pr exemplifyices and its effect on the economy. It testament describe Wal-Mart as a non-union employer, paying lower contend to their employees than other retail and grocery stores. They do non offer benefits to completely employees and more than or less atomic number 18 unable to afford them.Between Wal-Marts business practices in increasing their profits and the need to recognize their social and ethical responsibilities, Wal-Mart needs to find a comfortable balance of profitability and debt instrument in order to improve their report card.During the process of writing this report, we found that there was much much knowledge to be discussed ab disclose Wal-Marts unethical business practice than what was reported. We also wanted to point come in that although all companies do everything possible to lower their comprises and maintain mettlesome production rates, Wal-Mart has crossed the strain oer the years by managing their profits in unethical ways compared to other large corporations who substantiate been ethically and successfully managing their business practices. Information that can be found on Wal-Mart is changing daily and it wassome successions difficult to preserve up.EXECUTIVE SUMMARYWal-Mart has been recognized as the leader in its industry and the largest company in the nation. With its knock- tidy sum(a) profit reservation abilities, Wal-Mart has grown from a local corner store to the money devising monster it is nowadays. The company has damaged its reputation over the years due to unethical plectrons made by its top exe releaseives. As a result, its anti- union stance has been singled out on issues concerning benefits, wages, and overall business practices.When reviewing Wal-Marts monetary statements, one would be overwhelmed to see such(prenominal)(prenominal) superior performances just now when you are a Wal-Mart employee, it is no awe why that is true. Employees accommodate been denied opportunities of advancement and pay raises. Lawsuits puzzle been pending against the company with employees claiming they have been denied promotion opportunities in the company due to their gender, and some employees have sued for being over-worked and under paid.Wal-Mart has become so big in its industry, that it has lowered the wages through and through out the country and has influenced economic change. Since most of Wal-Marts employees live beneath the poverty rootage, it is difficult for them to afford health insurance when deductions out of their paychecks are sometimes as high as 33%. A Wal-Mart employee who commences health ins urance would have a very difficult time raising a family with this kind of premium. Wal-Mart employees are unable to receive healthcare benefits because the cost is too high and their wages are low.As a result, employees face a difficult time deciding whether to sacrifice such a large portion of their pay to obtain health insurance in most cases Wal-Mart employees last out without health coverage. Deductions for health insurance are higher for Wal-Mart employees than other national retail employees. A Wal-Mart employee pays around 25% more for health insurance than the add up retail role player. Wal-Mart has also been opposed by its womanish employees, who make up two-thirds of its work deplume.Women have been discriminated in wage and have been denied any advancement to upper managerial positions dominated my men. Men make approximately 5%-15% more than women and have a higher fate of advancing to a break out position. Dukes vs. Wal-Mart, filed in 2001, was the largest laws uit against a private employer in the nation and correspond 1. 6 million fe anthropoid employees who were discriminated based on their sex. From lawsuits to employee complaints, Wal-Mart has been faced with a great deal of difficulties that have developed through their own unethical business practices.Although every companys goal is to lower costs and produce large numbers, Wal-Mart has made sky-rocketing profits by unethically hurting its employees and cutting take down their wages. Many question why Wal-Mart, the richest retailer in the world, chooses not to depart adequate wages or health benefits for its employees. If Wal-Mart were to reform its health benefits program, raise their product sets by as little as a penny, and create a bias free working environment for women, Wal-Mart would be in better foothold with its employees and improve the reputation it sacrificed from the start.SAVE MONEY, LIVE BETTER, NOT ON WAL-MART WAGESINTRODUCTION BackgroundWal-Mart, the large int ernational send away chain was founded by Sam Walton. On May 5, 1950, Walton purchased a store in Bentonville, Arkansas, and opened Waltons 5 & 10. Little did the small town residents know that they would later become the headquarters for the worlds largest retailer store in the U. S. Through his savvy, and sometimes unusual, business practices, he and his unites led the company forth for thirty years.As Wal-Mart grew into a global corporation it is today, it has dealt with a great deal of criticism by outsiders. Wal-Marts ethical citizenship has been questioned numerous times and researched by many. on that point have been many doubts about Wal-Marts business integrity and questions whether their practices are ethical or not. Wal-Mart has faced, and is still facing, a portentous step of controversy over several different issues.Wal-Mart has been caught bribing its employees, discriminating against women, denying its employees of training or promotions, paying low wages, and p roviding high deductibles for health insurance. Wal-Mart is now paying the consequences and need to become socially responsible in order to maintain a better reputation with society. Although consumers are reeled in with the low prices Wal-Mart has to offer, others feel their ethical beliefs are more important than prudence a quick buck.Statement of Purpose The purpose of this report is to examine Wal-Marts unethical business practices with a focus on employee wages and high health care deductibles. The report will question Wal-Marts aptitude to sell products cheaper than any of its leading competitors and yet maintain making a substantial amount of profit. The report will analyze the unethical practices that have developed through Wal-Marts history as a result of focusing on high productivity and profit making strategies.Scope The report will describe Wal-Marts unethical business practices that affect its employees. It will examine Wal-Marts unethical look in conducting business with an overall focus on employee wages.Limitations Time constraints have limited the extent of the research. There is a vast amount of information regarding this issue and we are unable to report it all. In addition, no funds are available to conduct primary research.Methods of Research The method of research for this paper was substitute(prenominal) research through databases, internet websites, and books. The research databases of California State University, Los Angeles, will be used to commit articles in current and past publication. The databases used are Lexis/Nexis andBusiness Source Premiere. Also libraries, such as the John F. Kennedy Memorial Library at California State University, Los Angeles and Los Angeles Public Library in porter Ranch, California.The major findings of this study indicate that Wal-Mart being the worlds largest and richest retail chain is setting the exemplar on wages for retail workers and beyond. Because Wal-Mart has become so big, it has dragged down wages throughout the country. Wal-Mart has become what it is today by selling products at low prices and paying their associates even off lower wages. Unhappy Wal-Mart workers complain as much about being over-worked as underpaid. Wal-Mart has its own stated policies at its employees expense. Wal-Mart pays its associates below grassroots living wage standards and even below poverty lines.Overworked and Underpaid EmployeesH. Lee Scott Jr. is the chief executive of the powerful corporation we call Wal-Mart. According to Mr. Scott, by selling vast quantities of goods at its trademark Every mean solar day Low Prices, Wal-Mart has single-handedly raised Americas standard of living, saving consumers about $ cytosine one thousand thousand a year (Bianco 2). They feel that selling vast quantities of low price merchandise gives them the right to act as if they represent the American people. Scott states, Wal-Mart also pull up stakess good jobs for hundreds of thousands of equally deserving employees, offers even part-time workers bounteous health insurance and other benefits (Bianco 2).He accuses greedy fag unions, inefficient supermarket chains, and other Wal-Mart opponents of distorting the facts to suit their own purposes. Wal-Mart insists on describing themselves as pro-associate, not anti-union, entirely is quick to suppress any and all attempts to have unions organize in its stores. In his book The Bully of Bentonville, Anthony Bianco describes how Wal-Mart has affected wages beyond their own company Because Wal-Mart is so big, it has dragged down wages throughout the country.Economists at the University of California at Berkeleyfound that Wal-Marts expansion during the 1990s cut the income of Americas retail employees by 1. 3 percentage-or by $4. 7 billion in 2000 alone. What is more, the dismay effect of Wal-Marts expansion on payrolls extended well beyond retailing. According to a 2005 digest by economists at the Public Policy Institute of Cal ifornia, take-home pay per person fell by 5 percent across the board following Wal-Marts entry into a country.The evidence potently suggest(s) that Wal-Mart stores lead to wage declines,shifts to lower-paying jobs (or less skilled workers), or increased use of part-time workers. (4) Today, Wal-Mart is surrounded by controversy, but the greatest is from within. Unhappy employees are quitting and dozens of class-action lawsuits are pending against the company. Managers have been known to force employees to work extra hours without pay either by eliminating breaks or by having them clock out and keep working off the clock. This is Wal-Marts way of saving on costs at the price of its employees. Store managers name bonuses based on pay.Since the corporation dictates the inventory and operating expenses, managers only control is labor costs. Joyce Moody, a former manager in Alabama and Mississippi, told the New York Times that Wal-Mart threatened to write up managers if they didnt brin g the payroll in low enough. Depositions in wage and hour lawsuits promulgate that company headquarters leaned on management to keep their labor costs at 8 percent of sales or less, and managers in turn leaned on assistant managers to work their employees off-the-clock or simply delete time from employee time sheet (ufcw.org).In the late 1990s Wal-Marts annual employee turnover rate was a remarkably high 70 percent, 40 percent higher than in antecedent years (Slater 120). Wal-Mart does not see this as being a problem. The constant turnover reduces employees eligible for raises, promotions, benefits, and holds the average wage down. Just another way to keep payroll costs at a minimum.Employee WagesWal-Mart employs 1. 3 million workers in just the U. S. and operates more than 3,400 stores throughout the United States. A full time employee working 28- 40 hours a week at Wal-Mart is paid on an average of $250 a week. Besides having low wages, those workers who are interested or eligi ble in obtaining health insurance for themselves or for their family pay high premiums and frequently dont get the coverage they expect. The bulk of Wal-Mart employees live below the poverty line and after making deductions in taxes and insurance coverage, a Wal-Mart employees salary is not enough to provide them a standard way of living.The 2003 poverty guideline for a family of four is $18,400, $4,256 more than the $14,144 in earnings a full-time Wal-Mart worker earns at $8 per hour A household of four with a gross income of $23,920 or less could be eligible for food stamps -$9,776 more than a full-time, $8-an-hour Wal-Mart worker would earn in a year. (www. aflcio. org) These numbers are even worst for part time workers. Today, one-third of Wal-Marts employees are part-time workers. They are limited to less than 34 hours of work per week and are not eligible for benefits and must wait 1 year before they can enroll.Sex Discrimination in the release PlaceIn addition to Wal-Marts low wages, its female workers are more disadvantaged and discriminated against in wage than its male workers. More than two thirds of Wal-Marts hourly employees are women and make up most of the lower wage positions which include working the cash registers, stocking shelves and working the sales floor. Although men take responsibilities in these positions as well, the majority of men who work at Wal-Mart have positions as Management Associates or much higher bedded positions. Seventy-two percent of Wal-Mart employees are female and less than one-third of those women have management positions in the company.With that in mind, the average male employee was paid about $5,000 more in 2001 per year than the average female full-time employee. As Wal-Marts own workforce data reveals, women in every major job household at Wal-Mart have been paid less than men with the same seniority, in every year since 1997 even though the female employees on average have higher performance ratings and l ess turnover than men. (http//www. walmartclass. com).Dukes vs. Wal-Mart is state to be the largest and most famous gender disagreement lawsuit against a private employer and is the largest class-action suit in U. S. history, representing 1.6 million current and former female employees. Betty Dukes was the leading plaintiff in the case and sued Wal-Mart for sex discrimination she was a fifty-four year old African-American woman who worked as a greeter for Wal-Mart.Factors such as seniority and performance were Wal-Marts main excuses and reasons that women earned from 5% to 15% less than men. It is unsatisfying to see that even the cashier positions, that are dominated by women, have men earning more than women. Wal-Mart not only overworks, under pays and discriminates against women, but it also provides neither childcare for workers or affordable family health benefits.Unaffordable healthcare DeductiblesWal-Mart employees are incapable of receiving healthcare benefits available fo r them because of its high cost and their low wages. Since most of Wal-Marts employees are unable to afford these health benefits, most of these individuals either turn to government aided insurance such as Medicaid, depend on their spouses forges, or expect to see a ready in rare and emergency cases with no insurance. It is argued that uncovered Wal-Mart employees are not signing up for checkup insurance and benefits because most of them exceed the income ceiling and are not eligible.Wal-Mart provides insurance for over 900,000 employees that are with and with out dependants. Employee premiums range between $143. 54 to $249. 71 per month for family coverage and $33. 04 to $72. 04 per month for single coverage. The National add up of workers covered by employer health insurance is 67 percent, and only 47 percent of Wal-Marts employees are covered by the companys health care plan. That is a huge gap when considering that from each one percent represents thousands of people.Most Wal-Mart employees have a difficult time deciding whether to attain health insurance or stay uninsured for the sake of saving money. Cynthia Murray, who has worked at a Wal-Mart store in Laurel, Md. , for six years, suffers from asthma, but goes to see a doctor only when she suffers a bad attack. Murray is 50 years old, makes $9. 47 an hour, and says that the Wal-Mart plan that costs $23 a month has a $1,000 deductible, which makes it too expensive for her to use. Another plan subtracts $100 from her paycheck every two weeks.I dont think anybody working at Wal-Mart has that kind of money, says Murray. All Im communicate from Wal-Mart is a fair share. (Gogoi). Many Americans question why Wal-Mart, one of the richest companies in the United States, cant offer affordable health insurance and pay a living wage. Comparing Wal-Marts employee health benefits and wages to Costcos employee health benefits and wages, one will notice that Costco not only pays its employees higher than Wal-Ma rt but their deductions are far less. The average wage at Costco is $17 an hour. a full-time worker at Wal-Mart makes $7.50 an hour on average.Costco workers pay just 8% of their health premiums, whereas Wal-Mart workers pay 33% of theirs. xci percent of Costcos employees are covered by retirement plans, with the company contributing an annual average of $1,330 per employee (Cascio). base on these facts, it is easy to say that Wal-Mart employees are giving up a large portion of their paychecks to obtain health care. Wal-Mart employees who do have health insurance and receive coverage are paying more in premiums but receive less for their money in large corporations this has become a trend.New laws have been passed intended to force large corporations to control employee wages and reduce insurance deductibles. From law suits to employee complaints, Wal-Mart has recently ideal of ways to reduce the cost of health benefits. The new plan would charge monthly premiums ranging from $25 . 00 for individuals to $65. 00 for a family, making that 45-65% less than what employees contributed in the companys existing plan. But it is not enough to reform the reputation Wal-Mart has lost or the vulnerable employees they let down.ConclusionsHigh productivity and lowering costs is one of the top and most important objectives in business. Wal-Mart being the Worlds largest retailer can afford to pay their associates more than what the minimum wage offers. They are in fact, the richest retailer in the world and yet neglect to provide their employees affordable health care with a livable wage. Even if Wal-Mart was to pass 100 percent of the wage increase on to consumers, the average impact on a Wal-Mart shopper would be quite small.Wal-Marts choice of action toward employee wages, health benefits, and bias work environment have not only brought an enormous phantom over its employees lives but also over its own big business reputation. The injustice decisions made through out th e history of Wal-Mart has changed many lives and has forever changed the American economy. In the business world, there is big, and then there is Wal-Mart. Recommendations Based on the conclusions presented above, the following actions are recommended1. Retaining associates already on staff would be more cost affective then high employee turnover.2. Train employees. Give the opportunity to advance and have freedom to associate and organize.3. Our analysis reveals that establishing a higher minimum wage for large retailers like Wal-Mart would have a significant impact on workers living in poverty or near-poverty.4. In order to increase employee satisfaction, reforming the cost of health insurance would help keep Wal-Mart in good terms with their employees.5. If Wal-Mart was to raise their prices by as little as a penny to the dollar it would afford them to pay the higher wages. Higher wages provide the employees opportunity to afford health coverage.6. Implementing fair employment an d labor practices. In other words, practise the Law.