Walmart's Social Responsibility
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Social responsibility of the companies, especially immense multinational corporations, has a large impact on the society, environment, and the world economy. The ways companies treat their employees, care for reducing their negative impact on the environment, and contribute to the community in general are the main signs of social responsibility of a company. Thus, the main aim of this paper is to research the level of social responsibility of one of the biggest retailers in the world – Walmart. Moreover, the research is aimed at distinguishing if the company is a good or bad corporate citizen.
Social Responsibility of Walmart as an Employer
The popularity of Walmart can be easily explained with the product range width, competitive prices and good deals, outstanding marketing policy, and convenient location of the stores. The corporate image of Walmart makes it stand out in customers’ minds as a company which cares for people and their needs. However, the multiple cases of Walmart being taken to court for not fulfilling its responsibilities for the employees and the community prove the opposite. The legal cases Walmart was involved in over the last few decade were connected to various issues such as employee discrimination and racism, sweatshops, using children’s labor, and bribery.
Walmart claims to provide a significant number of jobs in the U.S. and worldwide. However, having billion dollars-worth profits, the company does not even provide competitive wages for its employees (Tierney, 2006). An average Walmart employee earns five percent less in wages than employees of other retailing companies in the country (Dube, et al., 2007). Walmart makes uses its employees by paying extremely low wages to bottom up its prices to beat the competitors and increase its profits. Poor conditions of work and dishonesty of Walmart’s business practice show how socially irresponsible towards its workforce the company is.
Furthermore, it was proved that the company exploits cheap foreign work force at Walmart’s factories abroad paying no more than two dollars per day (Tierney, 2006). With its campaign `Made in USA` Walmart betrays the customers claiming that all the company’s goods are produced in America. In fact, Walmart mainly sells products that are produced in China and other countries with less production expenses, and uses computer software and processing of data operated in India (Reich, 2005).
Another issue is health insurance policies for employees at Walmart. The company has heavily cut health insurance coverage for its employees and their families, and premiums were significantly raised for both part-time and full-time employees. Thus, most of the Walmart employees are not provided with health insurances by the company and cannot afford to pay for them on their own (Reich, 2005).
Moreover, Walmart was found guilty of using children`s labor in slave-labor camps such as Daewoosa Factory in American Samoa that was producing clothes for Walmart. Young women, who worked there, confessed in being beaten, starved, and threatened with deportation (Freeman & Ticknor, 2003).
Social Responsibility of Walmart as a Competitor
Walmart’s is one of the largest retailers in the world that gained its market positions thanks to using unfair business practices. Lowering wages and social benefits for its employees Walmart was able to minimize the product prices in its stores. These tactics makes other companies unable to compete with Walmart’s prices. As the result, the competitors are forced to adopt Walmart’s policy of reducing wages (Dube, et al., 2007). These tendencies are not acceptable for national employment market.
Walmart aims at pushing smaller competitors out of the market. They cannot compete with Walmart because of its tactics and the scale of its activities; that is why small retailers suffer, lose their fortune and leave the market (Reich, 2005).
Moreover, by claiming to create a large amount of new work places providing more people with jobs, Walmart pushes other companies out of the market. Those companies would provide the same amount of work places as Walmart, although paying more to the employees. Opening every new Walmart store affect an average wage in the local retailing sector decreasing it by 0.5-0.9 percent (Dube, et al., 2007).
Environmental Impact of Walmart
Walmart’s external business activity affects environment, has some social issues and contradictions with its corporate culture. Furthermore, Walmart`s influence on the ecology and contribution to the greenhouse effect are also significant issues in estimating social responsibility of the company. Being a large company with such global mass production, Walmart leaves a heavy footprint on the environment. Transporting goods from the manufacturer to stores and exploiting facilities (water, energy and infrastructure) at the high rate cause harm to the biosphere, and pollute the environment with carbon dioxide emissions (Dube, et al., 2007).
Walmart helps to fight poverty
Walmart tries to incorporate the image of a company that helps poor countries and regions to alleviate poverty by developing businesses (Tierney, 2006). However, the reality is quite different; Walmart’s policy of outsourcing abroad minimizes its production cost since the resources are much cheaper in the chosen countries. Allocation of production facilities abroad led to closing Walmart’s production lines in the USA leaving a lot of people without jobs and decreasing indexes of the American employment market (Tierney, 2006).
Therefore, the analysis of Walmart’s social responsibility platform by exploring its policies towards employees, competitors, governments, and society in general shows that Walmart is a bad corporate citizen. Multiple examples of Walmart’s activity described in the paper prove that the company has a low level of social responsibility.