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Organizational Ethics Issue Resolution Paper (1) Wal-Mart is the largest American retailing company. There are close to 3. 000 Wal-Mart discount stores in USA alone. Companys headquarters area located in Bentonville, Arkansas. The most of its stores Wal-Mart has in Arkansas, Oklahoma, Mississippi and Missouri. 87 % of Companys annual profit is based on domestic sales. Many economists suggest that Wal-Marts continuous expansion will inevitably slow down soon and even turn into contraction. This is because company has grown too large already and it practices inflexible business strategy, when everything that matters is expansion at any cost.
Still, it needs to be recognized that companys old-fashioned business approach proved to be quite efficient, up to this date. The reason for this is that Wal-Mart was not just growing bigger but it was also pushing smaller retailers out of competition. In this case, growth and acquisition came hand in hand. There is a growing discontent among people with Wal-Marts business practices; as such, that undermines communal solidarity. In his article Is It Ethical to Shop at Wal-Mart? Bob Brownstein says: Wal-Mart is both a cultural symbol and is an economic force that proclaims free market materialism uber alles.
It destroys other institutions based on relationships of human connection and solidarity - be they neighborhood businesses or unions. Wal-Mart helps transform people into atomic creatures whose lives are dominated by the search for bargains -- at whatever social cost (Brownstein). This is a very valid point, however, it is little too vague. In this paper, we will focus on another ethical issue, regarding Wal-Mart, which has an immediate effect on everybody. The fact that Wal-Mart strives to achieve a complete monopoly on U.
S. retail market causes Companys smaller competitors to close down, which results in many people losing their jobs. However, the worst thing about it is that the suppliers of goods to retailers, within U. S. , are also becoming uncompetitive, because they cannot win the competition with Chinese manufactures.
This leads to a situation when more and more U. S. companies move their production lines to China, which destroys Americas industrial base. (2) The U. S. citizens are the most interested party in reforming Wal-Mart business practices, even though that they often do not understand it. Wal-Mart encourages people to indulge in pursuing their secular agendas, while reducing the intensity of their sense of national affiliation.
On the other hand, there is Wal-Marts corporate establishment, which is only interested in increasing its profits, without being concerned about the social costs of it. Thus, we can identify two stakeholder parties that are involved in the issue consumers and Wal-Mart owners. The consumers appear to be promoters of organizational change, while owners are obviously defenders of an old business approach, as such that allows them to extract the most profits. However, the resolution of Wal-Marts ethical issues does not lie within the boundaries of interaction between Wal-Marts management and consumers.
In fact, very often the in interests of Wal-Mart and ordinary citizens correlate, because Company provides cheap prices for the customers, which is exactly the same reason why it continues to expand. Thus, it leads us to conclusion that there has to be a third party, which has a stake in the issue, namely U. S. Government, for which the maintaining of Americas economic sovereignty is one of its priorities. However, we cannot refer to the government, in this case, as either latent or apathetic stakeholder.
Apparently, the purely economical issue of Wal-Marts continuous expansion has turned into the ethical issue. Nowadays, it is becoming a geopolitical issue. American economic independence, as whole, is endangered by Wal-Marts practice of acquiring 95 % of its retail products from China. (3) Several values can be identified, when we embark on finding a solution of how to make Wal-Mart commercial stance to be more socially acceptable. There is a value of services that Company provides to the customers. People are able to buy products at Wal-Mart, while paying less money than they would anywhere else. Therefore, we can say that the overall negative effect of Wal-Marts operations on American economy is not being thought of in terms of an immediate danger.
On the other hand, there is a value that we associate with American way of life economic freedom, which is more metaphysical in its nature, even though that it does not make it less real. These values do not link up with each other. When we analyze the value of Wal-Marts services closer, it will appear that it is based on perceptional illusions. The one of the most basic laws of economy states that the value of every item, sold at the store, directly corresponds to its quality. Therefore, people are being intentionally misled to the wrong conclusion that they are going to buy high quality value products, when they shop at Wal-Mart, while being able to save money.
As practice shows, the products imported from China, do not last for long. In its turn, it makes people to return to Wal-Mart to buy the same products, while hoping that this time their expectations will be satisfied. This, of course, is nothing but a delusion, on their part. Thus, the actual value of Wal-Marts services is significantly lower than what Company proclaims it to be. When Wal-Mart achieves a complete monopoly, on retail market, this value is going to be reduced even more, because then, there would be no competition, which forces Company to guarantee a minimal value of the products it sells, at present time. (4) Wal-Marts main goal is to increase its profits, just as it is a goal of every commercial enterprise. The strategy it employs to reach this goal is continuous expansion at the expense of pushing smaller retailers out of business.
What enables Company to offer very low prices on the line of its products, is its dependency on cheap Chinese labor. In my opinion, this strategy is appropriate at present time. The Wal-Marts rapid growth is the best proof of this. The demographic dynamics in USA shows that more and more people are becoming price sensitive.
This is because majority of new immigrants to U. S. come from Third World countries and they are generally poor. Their concept of quality is much different from generally accepted American standards. At the same time, there are clear indications that companys growth might become stagnant in near future.
That is why Wal-Mart might need to consider selling off some of its assets throughout the world, in order to make retail operations more manageable. The main threat to Wal-Mart does not seem to originate from competing with other retailers. Nevertheless, since it has failed to embrace a truly progressive management strategy, Companys margins are likely to be significantly reduced in the future. This will inevitably lead to situation when Companys officials will not be able to disregard this threatening tendency any longer. There had been suggestions that Wal-Mart would do better, had it employed different pricing strategies, such as Broad Differentiation Strategy, which emphasizes on lowering buyers overall costs, while making customer more satisfied with purchased value by continually improving the quality of the product. Yet, there is no doubt, in my opinion, that while it could have helped to improve company's public image, Wal-Marts sales margins would drop.
Wal-Mart does not have a choice; it uses the expansionist strategy, as the mean of remaining compatible. In other words, it can only remain economically successful by pushing competitors out of business on continuous basis. The end of expansion would automatically mean the beginning of decline for the Wal-Mart. Thus, it appears that only the involvement of third party, such as U. S. government, which poses arbitrary powers, could result in Wal-Mart reconsidering its unethical policy of expansion at any cost. (5) The possible objections to government becoming involved in redesigning Wal-Marts present business strategy will come from conservative politicians, who might consider it as a threat to the freedom of economical enterprise.
However, such freedom can only exist in economically independent country, such as America used to be, before the advent of Globalization. Today, Wal-Mart turned into transnational monster, which has no affiliation with U. S. , except for the fact that it has most of its stores located in America. Therefore, it would only be logical for U. S.
government to nationalize this company and to begin selling some of its assets to the independent retailers. It is highly improbable that Companys managers might want to reconsider the unethical elements, in Wal-Marts competitive strategy, on their own accord. It is more likely that Companys top managers will resist any attempts, on the part of third party, to encourage them to adopt a more flexible approach, when it comes to dealing with competitors. This is because that Wal-Mart does not have social aspects incorporated in its commercial philosophy, even though that it participates in various philanthropic programs. In the same article, Bob Brownstein makes a perfectly good point: Wal-Mart doesnt produce new technology or innovations that improve the quality of life. It takes business from existing firms by offering the same merchandise cheaper.
Thats all it does (Brownstein). Thus, even though that there are going to be many objections to reorganizing Wal-Mart on new principles, or to simply nationalizing it, for the purpose of revitalizing American economy, it appears that there is going to be no effective ways to address them. This is because; the agendas of Wal-Mart owners and ordinary citizens have nothing in common, even though that Company strives to establish a friendly public image. (6) As it has been said earlier, the only way to prevent Wal-Mart from taking over the whole retailing market in U. S. is for the government to get involved in this issue.
However, at present time, the government actually promotes Globalization; therefore, it is highly unlikely that Wal-Marts current expansionist policies are going to be undermined by legislative acts. At the same time, there are no internal forces, within Wal-Mart body, which would bring about strategic reforms. Therefore, the only way to implement structural changes within Wal-Mart, is to encourage citizens to become more active, in socio-political sense of this word. In many American towns, the expansion of Wal-Mart results in recreational areas being sold to the Company, for building of another retailing super center. In his article Wal-Mart and the Environment Lindsay Robinson says: One of Wal-Mart's other environmentally destructive policies involves the placement of their stores. Wal-Mart and other big box retailers gobble up prime farmland and other natural habitat every day.
While Wal-Mart is busy polluting our lakes and streams, their executives are running a major campaign to show how environmentally friendly they are (Robinson). It is only when Wal-Mart officials will encounter a resistance to Companys policy of expansion at communal level, that they might realize that incorporating ethical elements in Wal-Marts corporate philosophy is only the way to insure Companys survival. In Globalized world, ethical notions are not going to have any importance, in the field of economics, for as long as they are not associated with sheer power, on the part of those who imply them. Therefore, in order to assure that Wal-Mart implements a new approach towards dealing with competitors, citizens need to make it clear that Companys officials are mistaken if they think that Wal-Mart may continue on exploiting people, without experiencing a growing resistance, on their part. Bibliography: Brownstein, B. Is It Ethical to Shop at Wal-Mart? . 26 April, 2004.
Markkula Center for Applied Ethics. Santa Clara University. Retrieved May 29, 2007 from web Holland, J. Wal-Marts China Price. November 7, 2005.
Retrieved May 29, 2007 from Alter Net. Org. web Robinson, L. Wal-Mart and the Environment. 2001. The Urbana-Campaign Independent Media Center. Retrieved May 29, 2007 from web Abstract: This paper discusses organizational ethics in regards to Wal-Marts expansionist policy.
Outline: Introduction and issue clarification. Stakeholder analysis. Values identification. Issue resolution. Addressing objections.
Resolution implementation.
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Research essay sample on Organizational Ethics Issue Resolution
