Ethical Issues of Wal-Mart

2640 WordsNov 11, 201011 Pages
The ethical issues of Wal-mart Introduction: A stakeholder is a person or a group that has an investment, share or interest in a business or an industry[1], it can also be classified as anyone that has an influence on the business. There are two types of stakeholders, primary and secondary. Primary stakeholders are necessary for the company’s survival, meaning people from the workers, supervisors, managers, to the customers, shareholders and board of directors; and secondary stakeholders do not typically engage in transactions with the company and therefore not essential to its survival, meaning the media, special interest group, etc. Since they have an influence in the company when there are any changes, they become a very important…show more content…
Wal-Mart ignores the rights of the employees, and they have little control on the higher post staffs. Wal-Mart did not maximize the stakeholders’ wealth and value, they do not respect their business culture as much and uses forceful methods to get to an agreement. Why do you think Wal-Mart has had a recent number of ethical issues that have been in the news almost constantly? Wal-mart is the largest retailer in the world, which is possibly the most controversial business in America. Its sales are over $312,000 billion in 2006 and approximately 1.7 million employees around the world. Wal-mart has saves the average family an estimated $2329 per year[4]. Although Wal-mart is producing lower cost product to customer, but it also producing lots of ethical issues when it provides this benefit to their customers. Relatively low payment of Wal-mart employees: Why Wal-mart can provide such a low price product, from my opinion, there are two main reasons. A company usually minimize its cost by lowest its labor cost and lower its cost when import product. The reason of why Wal-mart can minimize its labor cost is because in most Wal-mart store, Wal-mart is the monopsony, as a monopsony Wal-mart will be the single buyer of the labor force. As long as Wal-mart is the single buyer, they have a monopoly power to become a “wage maker” because the wage rate it must pay varies directly with the number of workers it employs. As a monopsony, Wal-mart has such monopsony power at its
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