Wal-Mart: The Future Is Sustainability

While reading the case study, "Wal-Mart: The Future Is Sustainability" (Ferrell, 2011), I learned that Wal-Mart has had a turbulent history spanning the last 49 years. They have been accused of putting smaller companies out of business. In fact, this is one of the biggest complaints against them. According to the text, small businesses cannot compete with Wal-Mart's low prices (Ferrell, 2011). Many have tried filing lawsuits but Wal-Mart claims they are just providing a good quality product for a low price. This strategy eventually causes small, local stores to go out of business.

They have had issues with suppliers. Because of Wal-Mart's size and power, they can influence how a supplier runs their business. Some see this as good and bad. The good, being that a company would have to become more streamlined and efficient for Wal-Mart. The bad, would have to be that a lot of companies are forced to move production overseas to help meet Wal-Mart's demand for lower prices. This wasn't Sam Walton's intention. In fact, during the 1980's, he started a "Buy American" campaign to help keep American companies from going out of business. It didn't seem to work out in the end. More than 80 percent of Wal-Mart's products come from overseas (Ferrell, 2011).

One of the more public ethical dilemmas that Wal-Mart faced was the ones involving employees. Discrimination issues involving pay differences and leadership positions between men and women. In 2001 an internal study showed that female store managers were paid less than men in the same position. In 2004, a judge granted class action status to current and former Wal-Mart employees for sex-discrimination. So far, Wal-Mart hasn't been able to appeal the case (Ferrell, 2011). On the flip side, Wal-Mart has been commended for its treatment of female employees. The National Association for Female Executives has recognized Wal-Mart 3 years in a row as a "Top Company for Executive Women" (Ferrell, 2011).

They have also had leadership issues. The most famous, was the one involving former board vice chair Thomas Coughlin. He was a good friend of Sam Walton and a candidate for CEO. Thomas Coughlin was caught stealing about $500,000 in the form of bogus expenses, reimbursements, and the unauthorized use of gift cards (Ferrell, 20011). The board of directors forced him to resign. Wal-Mart has since rescinded Coughlin's retirement package worth over $10 million. He was also sentenced to 27 months of home confinement, $440,000 in fines and 1500 hours of community service for a criminal conviction of wire-fraud and tax-evasion. The case was a huge black eye on Wal-Mart's leadership and Ethics.

If all that wasn't enough, Wal-Mart has also faced ethical issues pertaining to the environment. The most common is urban sprawl. Building a new Wal-Mart store can stress a community's infrastructure road, parking and traffic flow. A new store also requires about 20 to 30 acres of land. The problem with that is, after Wal-Mart outgrows a location, it abandons it stores and won't sell the empty real estate. These things have environmentalists up in arms. But, Wal-Mart is working towards becoming a greener company. According to the text, they are working on four areas: waste improvement and recycling, natural resources, energy, and social/community impact (Ferrell, 2011).

Analysis

Now that I have summarized the reading, I am going to get into the analysis portion by answering some pertinent questions. The first one is: What is the single most important ethical issue presented in the case and how has the issue affected specific stakeholders? Although there are many important ethical issues discussed. The one that stands out to me are the environmental concerns. In today's world, going green is the right thing to do. It has a big impact on the environmentally minded stakeholders because if a company doesn't make a good effort to be environmentally conscious, then it could eventually harm the company. As consumers we are all looking to save the planet by buying recycled products and purchasing products from companies that promote a greener future.

What has the company done to address their ethical issues and what could they do differently to avoid future ethical issues? According to an article in Business week, Wal-Mart is working with