The_High_Cost_of_Low_Price

The High Cost of Low Prices “It is pleasure for anybody to be the CEO of this company……we are focusing on doing the right thing and doing things right” (Greenwald, 2005). Wal-Mart is the number one retailer in the world, with 8,500 stores worldwide employing about 2.1 million people. (Lost Tribes, 2011) To provide everyday low prices for customers seems as its unique brand characteristic. Besides, it also serves more than 100,000 charitable and community-focused organizations by providing financial and volunteer support. (Lost Tribes, 2011) For instance, the company made quick response to Japan Earthquake by donating initial commitment of $ 5 million. (Lost Tribes, 2011) With these strong facts, everyone might consider Wal-Mart is a successful and socially-minded corporation. However, the dark side of Wal-Mart extremely destroys its accomplishments. The close of local family business and the painful experience of Wal-Mart employees tell a story about how un-ethical culture Wal-Mart holds. First, Wal-Mart forces family retail businesses close when it enters in a new local market. Weldon Nicholson, a Wal-Mart store manager worked for 17 years, describes that whenever Wal-Mart comes into a new town, the management would predict how long they would take to make each business along Main Street close. (Greenwald, 2005) “Their intent is simply to come into a community and force everybody out,” Mr. Hunter, the owner of H&H Hardware, says in the film. An employee of H&H Hardware voices that “they busted up standard oil, and they busted up Ma Bell.” When local family retailers operate their businesses by providing good service and quality products to customers, and taking good care of employees, Wal-Mart holds its culture of always low price and the privilege that they gain from government to destroy the culture of those family businesses. For instance, H&H Hard ware, a family business in Middlefield, that opened in 1962 and experienced long hard times to build own business was forced to close when Wal-Mart approached. Its culture also disappeared along with the shutout. In addition, many businesses like H&H Hard were driven out of market by Wal-Mart also influence the culture at local. It is easy to understand that effect when watching the empty store after empty store along the Main Street in the film. With Bruce Springsteen’s plaintive version of “This Land Is Your Land” as accompaniment, culture at local seems to gradually disappear. Second, another crime of Wal-Mart is that they treat its employees terribly. The average annual income of employees of Wal-Mart is under $14,000. (Greenwald, 2005) Besides, it fails to offer affordable health benefits to its workers and their families. Based on the documentary, Wal-Mart management people openly advise that employees join in government-aid system instead. In addition, sex and race discrimination also happened in Wal-Mart. The company is filled with comments such as “Women are useless in the company” or racial epithets. Especially, in China, the working condition of workers is seriously bad. With poor dormitories and unreasonable rent, employees have to work 7a.m. to 10 p.m., seven days a week. Back home in the United States, employees paid nothing for overtime working hours. Even the basic security cannot be fulfilled in Wal-Mart parking lots. The countless news of crimes committed in store lots constantly emerge in the documentary but these crimes occurred were only ones in the first seven months of 2005. With these facts, it is much easier to realize how Wal-Mart can provide the lowest prices----to squeeze employees. Although in Wal-Mart, these crimes or these cultures are supported by corporate head quarters, a manager at street level can do something to balance the cultural expectations. First, as a manager at street level, he or she needs to send message to management people that un-ethical culture will cause brand poisoning. It is important to list the fact that such un-ethical culture will bring profit decreasing issues rather than describing how tragedy employees’ lives are to head quarters because profit is their bottom line. How businesses increase their benefit or turnover' Employees play important roles of increasing profits because they are people who do routine job every day; they are people who produce products every day; they are people who provide service to customers every day. With such poor benefit package, Wal-Mart will lose the quality assurance and excellent service. With such low respect to employees, Wal-Mart will lose the loyalty of their employees. In addition, company will lose band loyalty when customers find out the truth of “always low prices” because human rights exists in America. Second, a manager at street level is able to give respect to employees by being honest and fair. “Even workers work 41 or 42 hours, managers change it to 40 hours……every manager except general manager do it” (Greenwald, 2005) At least, to be honest with employees by recording their real working time is something a manager can reach. Besides, to eliminate discrimination by treating every employee fairly is another aspect. To build a climate that employee can achieve personal development and gain opportunities in working place fairly. Third, manager can offer security for employees or customers by assigning someone watching security camera or making hourly patrol of the area. The parking lot attack or murder would drop to zero if Wal-Mart could do something. Even profits mean a lot to a company, but a company at least should consider human safety first. The Walton family has given less than 1% of their wealth to charity while Bill Gates has given 58%. (Greenwald, 2005) There is only Wal-Mart there in a town while it forces other retail businesses to close. The dazzling estate of Lee Scot and Walton family is increasing constantly while Chinese workers can only live in dismal dormitory. Wal-Mart had stood for American to some extent because of its success but its name now is “monster”. A company like Wal-Mart with un-ethical culture results in such mess, which obviously shows how important culture is to an organization. No matter how strong a company is, it will suffer against if its culture conflicts with the whole society or with the whole country. Reference Greenwald, R. (Director). (2005). The High Cost of Low Price [Motion picture]. Brave New Films. (2011). Wal-Mart corporate. Slate. Retrieved May 8, 2011, from http://walmart stores.com/