1.0 Introduction
Wal-Mart Stores, Inc. began in the year of 1962 and its founder is Sam Walton. Till now, Wal-Mart is so successful because its founder, Walton emphasized on the customer satisfaction and hard work. This creates a value on Wal-Mart. It is indeed popular in American business of its low prices and it is one of the world’s largest public corporations. Hence, it has to be more careful while handling the relationships between different stakeholders. Wal-Mart is reported to be able saving the average family of $3200 annually. However, the company has received many critics on the issues of its treatment towards its employees, suppliers and economic impacts on communities. Many stand out to say that Wal-Mart is engaged in immoral issues in order to provide low prices.
This case attempts to show us about the controversy of both the positive and negative impacts on the society due to Wal-Mart’s low pricing. It involves various stakeholders here in the case, such as competitors, suppliers, and employees. In addition, some ethical issues such as the discrimination, illegal immigration issues, and leadership misconduct are brought out to discuss.

2.0 Wal-Mart’s Stakeholders relationship
2.1 Competitors Stakeholders
Problem:
Wal-Mart used predatory pricing which causes other companies out of business. This is because they work on volume. They can give greater discount than any other competitors can afford and yet still make a profit. There is lawsuit in Germany in September 2000 that accused there is illegal pricing of goods below the market price. We could see its intention on driving other competitors out of the area, form a local monopoly with no competition and recover the loss through higher prices when it monopoly. The predatory pricing will leads to limitation of consumers’ choice, and they might have to pay higher price when Wal-Mart is monopoly. In order to compete with Wal-Mart, competitors have to reduce the wages. This would cause the wages in the town reduced in 5%, including the Wal-Mart’s wages. The driven out of competitors creates unemployment problem whereby one study reported that 1.5 job is loss for every job that Wal-Mart creates. The sudden driven out of Wal-Mart in an area will affect the related economy.
Analysis and Evaluation of fact:
Although the competition with other competitors is normal in the business world, it should be done in a fair and just way. Wal-Mart hired illegal workers or pay low wages to workers in order to reduce the cost of business. This is truly unfair to beat the competitors. Wal-Mart has the legal responsibility to adhere to the law that prohibits predatory pricing. It also should have ethics in business conduct. According to Kant’s, everyone has right that should not be sacrificed even though it is beneficial for greater number of people and deserve for a fair play in market. In this case, even though the tactics of Wal-Mart is beneficial for consumers in short term, this has affected the survival of other competitors. In short, it brings more negative impacts than positive impacts. According to the principle of utilitarianism, Wal-Mart should evaluate overall consequences to all affected parties and seek to maximize happiness in long run. Therefore, the tactics used by Wal-Mart is unethical.
Recommendation:
We recommend that the Wal-Mart should behave legally and ethically so that it is fair for the other competitors to compete in the market. Low pricing still can be used, if they still can afford to, but only with legal and ethical strategies.

2.2 Suppliers Stakeholders
Problem:
Wal-Mart usually works closely with suppliers to reduce cost in order to offer consumers a lower price of goods. It also introduced a “Global Responsible Sourcing Initiate” in 2008 which add in new policies and requirements in the new supplier agreement. If the supplier manages to fulfill all the requirements, they are ensured with the sustainability with Wal-Mart. This would implement more cost burden to suppliers. To decrease the cost, suppliers have been forced to move their production to the less expensive country.
Analysis and Evaluation of fact:
We could see much egoism in Wal-Mart. It only take care the benefit of itself, which is having low cost and ignores the suppliers’ interest. Wal-Mart gives much pressure on the suppliers by carrying out the “Global Responsible Sourcing Initiate”. If the suppliers do not comply with the regulations, Wal-Mart would cease to get the supply from the suppliers anymore. This is how an egoist will act, it gives most priority to self interest.
Besides, according to Kants’ principle of ends, Wal-Mart must respect humanity and never exploit the suppliers to achieve their low cost objective. Wal-Mart’s action which forces the suppliers to move their factory to the less costly country is a type of exploitation, as this is to serve Wal-Mart’s need. Both seller and supplier have of equal value. None of the party can exploit each other. Therefore, Wal-Mart’s action is unethical.
Recommendation:
We recommended that Wal-Mart should take care of the suppliers’ interest and stop being egoism. Wal-Mart should not neglect the suppliers’ benefit while taking care of customer need by offering low price. Each stakeholder are in equal values, therefore suppliers should not be exploited anymore. Strict regulations such as those in “Global Responsible Sourcing Initiate” should be replaced with a new one, as they are unreasonable for suppliers to achieve.

2.3 Employees Stakeholders
Employees are primary social stakeholders of a company. In this case, Wal-Mart is the biggest retail employer in the world which is highly dependent on millions of employees to run its business. Employees have interest in the company, as in exchange of wages and benefits for their time and efforts; they also wish to have received fair pay and a safety working environment. The employees have a direct stake in the organization because they are directly engaged in the transaction of economy in company. They influence the survivor of company as they are people who satisfy customer needs. The company also affect them directly as the company provides the source of employment income to the employees.
Problem 1: There is accusation that there is unfair treatment to employees. There is claim that Wal-Mart does not provide fair pay, adequate benefits such as health insurance. There is also a claim that Wal-Mart is offering poverty level wages according to United State’s federal government’s definition of poverty for a family, pay wages which is less than the national average for the same job in the retail industry. Besides that, there are incidents and lawsuits such as allegation of alteration of time cards in order to avoid the overtime payment, violation of wage-and hour, prevented workers from rest breaks, lunch breaks that were guaranteed by state law.
Analysis and Evaluation:
Employees are entitled to legal rights, human rights and rights based on employment contract. Wal-Mart has the legal responsibility to abide the law for employment and ethical responsibility to treat employees in a fair, just and right way. Using the principle of ends advocated by Kant, the company should not exploit the employees as the mean to earn profit. Employees want to be respect, appreciated and valued for their contribution. Wal-Mart has given the working opportunities to the employees and so has the duties to fulfill the employees’ rights so that the employees can earn a living and enjoy protection from unwanted outcomes.

Problem 2:
Wal-Mart is opposed with labor union due to the perception of company will be divisive which cause company to be uncompetitive upon the union formation. When there is forming of employees union, the company will take action against the employees who involved. In 2000, when seven of ten butchers in Texas voted to join the United Food Workers Union, Wal-Mart eliminated the meat-cutting department. In China, Wal-Mart has penalized the employees who are the members of union by refusing to renew their employment contracts. Employees are deprived from channeling their thoughts and seek protection through unions.
Analysis and Evaluation of fact:
Employees have right to voice out their dissatisfaction, form coalition and protect their rights. On the other hand, Wal-Mart has right to ensure the loyalty and commitment from its employees and minimize disruption in its business operation. They should strike a balance between their rights. Also, Wal-Mart had abuse its position as employer by dismissing employees who join the unions without a fair reason and procedure.
Recommendation:
We would like to recommend Wal-Mart to allow the employees union in all the countries where it operated. Wal-Mart should understand the concern and expectation of employees from their relationship. Most employees urge for the labor union to protect their interest and the coalitions are increasing international, coupled with media and internet. For example, Wal-Mart Watch. This followed by the increasing of employee’s power, as the exploitation of employees will affect reputation and subsequently its revenue. The forming of employees union can act as a medium between the company and employees to discuss and solve problems. The welfare of employees needs to be improved on so that they will feel comfortable to work with Wal-Mart.

Problem 3: Discrimination problem was also found in Wal-Mart. There is a lawsuit against Wal-Mart in San Francisco for the discrimination to woman in promotion, pay, and training and task assignments in 2004. Recently, the court has approved class action against Wal-Mart, indicates that the case now involving about 1.6million of employees. It was revealed on 2003 that illegal immigrants were being employed in Wal-Mart stores at a low wage. Wal-Mart was being accused to sell Christmas decorations made in Chinese sweatshops.
Analysis and Evaluation of fact:
Everyone should be treated equally, as proposed by Rawl’s Two Principles of Justice. Everyone, regardless man or women should be given an equal chance to improve their positions. The discrimination practices supported by the statistic have violated the rights of woman employees to receive fair and equal treatment. Everyone should deserve opportunities to learn new skills, develop their capability and grow their careers. Therefore, the company should treat women equally by given the same chance and opportunity to every worker regardless of their gender in promotion, training and wages. The discrimination also violates the human right of women employees to be respect.
Overall Actions taken by Wal-Mart: Wal-Mart had raise pay tied to performance in some of the stores and improved the health benefits for its employees on 2006. The exceptional case occurred in China whereby it allowed unions in stores by entering into memorandum with All-China Federation of Union (ACFTU) due to the mounted pressure and the important of China market to Wal-Mart. The urgency to respond to the request of employees in China is higher compared to employees from other countries due to the business interest. For the discrimination issues, Wal-Mart was recognized as “Top Company for Executive Women” three years consecutively by the National Association for Woman Executives. In this case, we assume that Wal-Mart might have tried to improve on this aspect. On the other hand, Wal-Mart formed Global Ethics Office, issued a revised Global Statement of Ethics and expressed concern with ethics and stakeholders in newspaper, showing its sincerity to solve the mounted ethical issues as its reputation has being affected.

2.4 Customers Stakeholders
Customers are Wal-Mart’s primary stakeholders who have a direct stake in the company’s success. Wal-Mart’s customers cover all level of people in the society. However, their main target group is lower income customers. Both customers and Wal-Mart are desire to benefit from an exchange of product and service. Customers are expected to receive satisfactory treatment and products that serve it purpose safely while the company wishes to gain profit from the sales.
Problem 1: Consumers urge the consumption of “greens” products and services due to the global warning and environmental concern. They are looking for more environmental friendly products that can improve the standard of their living and at the same save their hard-earned money. One of Wal-Mart’s market orientations is focusing on its customers. It launched the Wal-Mart Sustainability Live Better Index in 2007 to track consumers’ demand for low-cost products, health and welfare products and environmental friendly products. It is found that the result have been good, the customers can adopt its eco-friendly products well. Moreover, Wal-Mart has always offering a broad assortment of merchandise and services at everyday low prices (EDLP) and contribute to the society with large charitable donations.
Analysis and Evaluation of fact:
According to Utilitarianism, companies should act in ways that produce the most pleasure for the greatest number of people. Wal-Mart’s EDLP strategy and green products has benefited both the company and customers especially the lower-income consumers. The company fulfills customers’ expectation by providing diverse cost-saving products that meet their need. In a return, the company gains an increasing market share and profit.

Problem 2:
Wal-Mart had introduced great discount and holiday-gift sections in stores on the Black Friday 2008. Due to the economy slowdown, shoppers around the nation descended upon Wal-Mart en masse in hopes of scoring Black Friday discounts. Hundreds of them queued up before stores opened at 5a.m. An employee was trampled to death as thousands of people rushed through the doors at the opening of the store in Valley Stream, New York. In addition, a pregnant woman was taken to a local hospital. Wal-Mart refused to admit any disorderly conduct in this incident but agreed to have its crowed-control measures approved by safety consultant.
Analysis and Evaluation of fact:
Using principle of autonomy advocated by Kant, the customers’ autonomy should be respected because they are rational human beings who have a freedom to act in their favor without interfered by others. Wal-Mart is said to be contravene with the principle as it had influence the customers’ autonomy in making purchase decision by introducing great discounts and holiday-gift during the economy downturn. Furthermore, the company also act contravene with the principle of end. Wal-Mart doesn’t respect humanity and treat its customers as a means to the end of making sales. The company has been aggressively exploring customers by lowering its prices and introducing holiday-gift sections in stores to gain maximum profit and neglect the customers’ safety. A pregnant women and employee were stepped by other customers as a result of the company negligence.
Recommendation:
Wal-Mart management team should have put themselves into the customers’ shoes, attempt to think off what are the customers expectation during economy downturn and take good care of their safety while they’re shopping in the stores. They shouldn’t exploiting customers by treating them as a means to burst their profit during economy slowdown. On the contrary, the company should put customers as their priority and act in the best interest on the customers.

3.0 Corporate Social Responsibility
Problem:
Wal-Mart has lawsuit regarding the inappropriateness in disposal of material waste. This harms and pollutes the environment, for example, water contamination in Georgia that will subsequently affect the quality of living of society. The urban sprawl problem created whereas green space is devoured for purpose of construction of roads, parking, etc. Abandoned stores increase when Wal-Mart outgrows locations.
Actions taken by Wal-Mart:
Wal-Mart has working on improving the waste disposal, material resources, energy and social impact, setting up goals to reduce the negative impact to environment, reducing the usage of energy as strategy of sustainability. Besides that, it is on the path to reduce the usage of chemicals that is hazardous, create environment-friendly stores, using its influence to encourage global efforts in preserving environment, implement Personal Sustainability Project, launch Wal-Mart Sustainability Live Better Index to encourage eco-friendly product.
Analysis and Evaluation of fact:
Everyone has duties and roles in society according to principles of duty. Wal-Mart has responsibility to avoid negative impact on stakeholders and consider the outcome of their corporate action against stakeholders. It’s still questionable whether Wal-Mart is really a green company due to its need for growth. It seems to be fulfilling all the characteristics of socially responsible firms through the actions mentioned. However, in our view, it does not really responsive and proactive in handling issues except for the respond for financial crisis whereby during financial crisis, it launched new measures such as reloadable debit cards and frees filing and tax services for families who have low income. In most of the time, it only takes remedies when profit maximization goal is affected and when has bad reputation. For example, when the sales is decline due to the negative issues. Therefore, its corporate social responsibility is more to enlighten its self interest to gain competitive advantage. It uses the slogan that it reduces the burden of consumer with its low price to differentiate with other competitors. In short, it can only become more sustainable when it is willing to reveal the truth of its action and embrace it with plans and implementations. The government and related organization should help to improve the well-being of the affected stakeholders.

4.0 Ethical Leadership
Problem 1:
Thomas Coughlin, former board vice chair, had involved in a corporate scandal. He had once been selected as the second highest-ranking Wal-Mart executive and was a candidate for CEO. Yet, he had emblazed the company’s fund for his personal expenses. His deceit was only exposed when he asked a subordinate to approve an expense payment without supporting receipts. Coughlin was then resign from the board of director and was sentenced to 27 months of home confinement, $ 440,000 in fines and 1,500 hours of community services.
Analysis and Evaluation of fact:
Leaders play an important role in shaping corporate culture. The top management team should set the right example by behaving ethically and emphasizing on ethical values. Moreover, they also have to instill the ethical value among the employees. In this case, Coughlin had display a worse example to the employees by emblaze the company’s fund and he had paid for his unethical conduct. Wal-Mart had set the right tone at the top by penalize the former board vice chair. On the other hand, the founder of Wal-Mart had instilled the “ten-foot rule” and “sundown rule” among its employees. Employees are required to look in the customers’ eyes, greet them and ask if they need any help whenever employees got within ten feet of customers. They are also being educated not to put today’s work until the next day. Stakeholders receive the message that which kind of behavior is not allowed in the company and which kind of attitude that they should have while working, they will attempt to comply with the company culture.
Recommendation:
Due to this ethic work and dedication to the customer care, there’s no any ethical program carry out in Wal-Mart in the early years of the establishment of the company. Wal-Mart is recommended to introduce code of conduct in stores so that all the employees are clear with their role and punishment of breaking the rules. Top management should also demonstrate ethical behavior in workplace.

5.0 Conclusion In conclusion, there are criticisms and admirations for Wal-Mart’s strategy in managing its different stakeholder’s relationship. However, as we can see from its evolution, Wal-Mart has working hard to improve these relationships and safeguard their good reputation in order to stay at the top of the trading world. In addition, Wal-Mart had taken the initiative to fulfill its corporate social responsibility by going green, helping families during recession and giving things back to the community. The company attempt to re-position itself as an ethically responsible company. The company’s objective might be achieved by accept the criticisms from all the parties and implementing exercisable suggestions.

6.0 References
1. David Elli (2008, November 28). Black Friday turns tragic for Wal-Mart. Retrieved October
9,2010,from http://money.cnn.com/2008/11/28/news/economy/blackfriday_walmart/index.htm

2. Is Wal-Mart ethical? (2009,November) , Retrieved October 9, 2010 from http://www.meacc.edu/~youth/text/walmart-long.pdf

3. New Rules Staff (2000, November 1). Wal-Mart charged with predatory pricing. New
Rules Project. Retrieved October 9, 2010, from http://www.newrules.org/retail/news/walmart- charged-predatory-pricing

4. Rosen, Ellen I. Wal-Mart: The Facts. National Organisation for Women. Retrieved 9
October, 2010, from: http://www.now.org/issues/wfw/wm-facts.html

5. Shaw, W.H. & Barry, V. (2010). Moral Issues in Business. 11th . ed. Canada: Wadsworth- Cengage Learning.

6. Wal-Mart Watch Fact Sheet: “Wal-Mart’s Wage and Hour Violations.” Retrieved 9 October, 2010, from: http://walmartwatch.com/