Cost Leadership Practices Of Walmart

1002 Words 4 Pages
Wal-Mart in 2015 employed over 2.2 million people and is the largest private retailer globally, making more than $485 billion. It’s vision is “To be the best retailer in the hearts and minds of consumers and employees.” and its mission statement is “Saving people money so they can live better.” Despite these vision and mission statements, the company has been in series after series of lawsuits, strikes, complaints from labor unions and environmental activists.. The company uses a cost leadership strategy in keeping prices low by reducing cost in operations and wages, which impacts quality of products and lives of its employees. The true cost of business includes not only profit and loss, but also its impact on people and the planet as a whole. …show more content…
Presidential candidate Bernie Sanders repeatedly points out the fact that many of WalMart’s workers suffer from being paid a starvation wage to live in poverty and have to depend on social programs. The owners of this company owns more wealth than 43% of all Americans combined, yet the company chooses to treat its workers with disdain and dismisses these protests. A Judge in January of this year ruled against Wal-Mart for illegally firing employees for protesting at the company’s headquarters during its yearly shareholder meeting in 2013. The judgement against Wal-Mart states it violated labor laws and must offer the employees back their jobs and compensate for lost wages. It also required Wal-Mart to inform its workers of their right to organize. This sends a message to the company that it must comply by labor laws and cannot silence and coerce employees into submission.
In April of 2015, a class action lawsuit by Wal-Mart employees was filed in the Alameda
County Superior Court for wage theft. Workers were refused proper breaks and reclassified to avoid paying for overtime since 2011. At the same time, Pennsylvania’s Supreme Court ordered
Wal-Mart to pay $151 million in compensation for wage theft to 187,000 employees deprived
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150,000 employees in Pennsylvania filed a class action suit against Wal-Mart for not being compensated for hours worked. Texas has a similar class action lawsuit for wage law violations.
Because of the lack of health care provided by Wal-Mart to its workers, they resort to using the emergency rooms, since they have no access to a regular health care providers, and tend to be sicker. Wal-Mart’s approach to this issue is to discourage people considered unhealthy to be hired. The company hires more part time workers so that they do not have to pay for benefits, and reduce 401(k) contributions. No wonder there are massive protests for inadequate health care against Wal-Mart in 35 cities across the nation in the month of April 2015 alone.
When a company does not have good CSR, government has to intervene. In 2006, 30 states worked on legislation requiring large companies like Wal-Mart to provide proper health coverage for employees. As we can see from the few cases mentioned, the company is incurring a huge cost in litigations because of its persistent violations of labor laws against its employees. Perhaps looking at its bottom line of profit and loss, it may still seem viable to this company to

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