2nd case study(Business Ethics): Gender Discrimination at Wal-Mart

It is a nice case study which shows that Ethics and equal opportunity for all employees are two things that every organization should practice for its own benefit. Even some of the world's top organizations can be reluctant to implement these and they have to pay the price.

Starting off with Sam Walton’s idea of low prices in the 1940s, Wal-Mart has since then become the world’s largest public corporation, topping the list of Fortune’s Global 500 for the sixth time in seven years. With headquarters in Bentonville,Arkansas, this retail giant has over 2 million employees worldwide, with 1.4 million within the United States alone, making it one of the largest private employers in the
nation.

As with any global corporation, Wal-Mart engages in multiple and complex relationships with a number of different stakeholders. Labor unions, environmentalist groups, grassroots organizations, religious groups and community members have criticized Wal-Mart for its perceived lack of concern in its current business practices and policies. Complaints have included unequal employment opportunities, lack of health
insurance etc.

Currently Wal-Mart finds itself facing the largest class action lawsuit in the history of the United States, having to fight against 1.6 million female employees who claimed that they were treated unfairly in their positions. Important statistical evidence being used by the women is a report conducted by Richard Drogin of Drogin, Kakigi & Associates, who was retained by the plantiffs of the Dukes vs. Wal-Mart Stores, Inc. case.

The report was composed using personnel and compensation data collected from 1996 to 2002, and its findings strongly help defend the plantiffs. Among the results, Drogin found that it took longer for women to rise to a management position, at an average of 10.12 years since date of first hire, as opposed to 8.64 years for men. In general, women make up 92 percent of Wal-Mart’s cashiers, but only 14 percent of store

management. The lawsuit also claims that the average proportion of female managers in the nation’s 20 largest retail stores is 20 percent higher than at Wal-Mart.Women are also being compensated unfairly as opposed to their male counterparts.

Rammona Scott, a former personnel manager at Wal-mart tried to get a raise for a female cashier in 1993. Her request was turned down by the store manager who told her that women are not really interested in making aa career and they worked because they wanted to take home some extra money!!

According to Drogin, women earned about $5,200 less than men overall in 2001 at Wal-Mart. Contrasting hourly vs. salary employees, women working hourly earned about $1,100 less than men. Women in management earned a salary of $14,500 less than men. Women also asserted that the 5 to 15 percent additional pay that men are receiving has nothing to do with seniority or performance reviews, as many of these women felt that men would get promoted before them because of gender alone.If these women were to win the case, Wal-Mart would have to face very serious repercussions that could ultimately affect its bottom line. Not only would the company have to pay what could be up to $10 billion in damages, but there would also be anincrease in pay to about 60 percent of their current workforce, which in turn would boost
prices and reduce not only sales, but its share price as well. In July 2005, about a year after the plantiffs were certified as a class, Wal-Mart’s shares fell 3.9 percent to $50.

There are still a number of lawsuits that are running against Wal-Mart.