Business Ethics




Businessesare essentially created with economic interests in mind however, ithas to do so with integrity, which serves to define theorganizational culture (Britt, 2011). It is therefore important topoint out that ethical organizational practices do not translate toshort-term profitability but contribute significantly toorganizational survival in the long term. Good ethical practicestranslate to positive business outcomes through a positiveorganizational philosophy. This paper seeks to discuss ethical issuesin Wal-Mart relative to &quotoff the clock work,&quot sexualdiscrimination, health benefits, the role of unions, the use ofundocumented workers, as well as the issues relating to child andlabor laws.

&quotOffthe clock work&quot

OnOctober 13, 2006, a jury constituted in a Philadelphia court foundWal-Mart guilty of contravening labor laws of the state ofPennsylvania (Case Study 22, n.d). This is just one of the manylawsuits that the company has had to settle over the past decadebecause of contravening the Fair Labor Standards Act (Case Study 22,n.d). The first lawsuit was in the year 2000 where the organizationsemployees were compensated for Wal-Mart’s failure to compensatethem for ‘off the clock work’.

Storemanagers at Wal-Mart shared a philosophy, which ensured thatemployees had to complete work assigned before leaving the workplace(Case Study 22, n.d). If the employees failed to complete assignedwork in the 8-hour workday, they were to clock out and continueworking until the work was completed. The time spent working afterthe 8-hour day was not paid to the workers. This unethical practiceled the workers to raise a series of lawsuits against Wal-Mart.

Wal-Mart’sofficial response stated that the organization’s policy did notauthorize such unethical practices as was evident in the Wal-Marthandbook (Case Study 22, n.d). However, the store manager’s lack ofintegrity led the company to suffer a negative public image.


ColemanPeterson, the human relations executive vice president at Wal-Mart in1999 provided evidence to the organizations board of directorsdetailing the organizations lack of proper business ethicsconsiderations with regard to gender equality (Case Study 22, n.d).As much as the company’s official position was fairness among allemployees regardless of gender, evidence provided indicated thatsexual discrimination was rife with the company favoring promotingand better compensation rates for the male gender in comparison tothose accorded to female employees. In 2001, a lawsuit was filedagainst Wal-Mart for sexual discrimination against female workers(Case Study 22, n.d). The core issues in the case were such thatwomen were the majority of the hourly rate workers yet only a thirdof them were managers. It was also if female workers werediscriminated relative to hourly rates. Coleman Peterson providedthat this trend had led to the organization lagging behind globallywith respect to fairness among all employees (Britt, 2011).


Inan effort to lower operational costs in line with Wal-Mart’spolicy, the company was found to be short changing it employees bymaking new employees to have to wait for six months prior to beingintegrated into the company’s health benefit plan (Case Study 22,n.d). In addition, retired employees were not eligible to the newhealth benefit scheme. The company had gone on to provide healthbenefit schemes in line with Maryland laws aim at lowering the costsincurred by the company. In 2006, the federal court in Baltimoredescribed the scheme under Maryland laws as being invalid (Case Study22, n.d). This led the company to adopt a scheme that conforms toother healthcare schemes in the US. As such, the company has had adismal record due to a negative ethical policy with regard to theprovision of employee health benefits.

Roleof unions

EverydayLow Prices is Wal-Mart’s principle philosophy, which entailsensuring labor costs are kept at the lowest possible rate. Inaccordance to its philosophy, the company has sought to keep workerunions at bay. In 2000, Wal-Mart disbanded one of its meat operationsdepartment after it became unionized instead preferring to outsourceits services (Case Study 22, n.d). The National Labor Relations Boardfound this move to be unethical and called for the reinstatement ofthe department. This has also been the cases in countries in whichWal-Mart operates such as Canada and China.

Theuse of undocumented workers

Wal-Mart’sphilosophy has been the source of its many woes, in an effort to makegood on a market campaign titled ‘roll back the prices’ itoutsourced cleaning services from a contractor (Case Study 22, n.d).The contractor offered a low price, which favored Wal-Mart’spolicy, and in turn, the contractor employed illegal aliens to cut onits labor costs. Federal Agents learnt about this and for two yearsconducted raids at the organization’s stores arresting many illegalworkers (Case Study 22, n.d). As much as the company’s policy doesnot accommodate illegal workers, it engaged in practices thatencouraged the illegal practice.

Childand labor laws

In2000, Wal-Mart was found to be in gross violation of Maine’s childlabor laws. Minors were found to be working late into the night whilealso working during school hours (Case Study 22, n.d). The court inMaine also found the organization guilty for having minors workduring schedule time off periods. This was also the case in a numberof states in which the organizations operate as well as in othercountries such as China, Indonesia, Bangladesh and Swaziland (CaseStudy 22, n.d).


Thecompany has been enjoying super normal revenues for a long time butrecent societal developments are now subjecting it to more scrutiny.Its philosophy has to change in line with these developments toconform to present and future societal developments. The philosophymay have worked will leading to high revenue collection owing toweaker state and federal oversight bodies.


Britt,D. (2011). TheEthical Issue.Retrieved on June 21, 2014 from

CaseStudy 22. (n.d). Case Study 22, &quotWal-Mart:But we do give them a 10% employee discount.&quot