Karachi Institute of Economics and Technology –North Nazimabad Site

Course: Business Ethics

Faculty: prof Dr Sajida Parveen Max Duration

Class ID:CCC Class ID:111129 Total 03

Marks:

Examination: Q03 Date: 20-12-2022 –

Uploaded on must 25-10-
2022( No late submission
would be allowed )

Case study: Wal-Mart’s Women: 2010

Name: Duaaa Ibrahim

SID: 10346

INSTRUCTION:
Read it carefully and answer the following question which are mentioned in the end of case
study

This case study focus the following ethical areas:

 Ethics& Employees
 Ethics of Job Discrimination
 Discrimination: Utility, Rights & Justice
 Harassment & Sexual Harassment
 Code of Conduct & Ethical Standards &Implementing Affirmative Action

Introduction
Wal-Mart Store is an mulinational retail coporation which runs the chain of large discount
department stores and warehouse stores in American. This Wal-Mart Store was founded by Sam
Walton in 1962.The company was incorporated on October 31,1969 and publicly traded on New
York Stock Exchange in 1972.This Wal-Mart Store is the second largest public corporation
around the world and it is also the biggest private employer in the world with over two million
employees. Wal-Mart remains a family-owned business, as the company is controlled by the
Walton Family, who own over 50 percent of Wal-Mart. This company also one of the world's
most valuable companies.
 Although Wal-Mart Store is the second largest public corporation around the work, it also face
the biggest employee headache which is the class action lawsuit claiming the company
discriminated against female employees. Essentially, there are two main reasons why women
will earn less than men. They may have less education or less working experience or choose to
work in an occupations that pay less than those that men choose. The other reason is that they
may face discrimination which means that earn is not equally to the skills they do have. In this
lawsuit is chimed:

a. That Wal-Mart pays women less than men even when the women have the same
amount of experience,
b. That earnings differences between men and women at Wal-Mart grow wider over
time,
c. That Wal-Mart does not offer equal training opportunies to its women employees
d. that Wal-Mart pre vents women from working in departments typically staffed by
men and which typically pay more,
·and that Wal-Mait refuses to post all management openings, thus limiting women's
opportunities to apply for management positions.

Case Background

The six female workers who working in Wal-Mart is the largest ever in American civil
rights history. This is a case accusing Wal-Mart stores which is discriminating cases against US
female workers. Two points had allege that women employed in Wal-Mart stores according to
the 2010 court of Appeals opinion which is women was paid less than men, besides that the other
opinion is receive fewer and wait longer for promotions to in store management positions than
men They were asking the Wal-Mart company compensate them or any other women who
worked for Wal-Mart since December 26, 1998 which suffered from the sexual discrimination
cases. If Wal-Mart were loses the case, it would cost Wal-Mart company many billions of dollar
since the female workers who worked in Wal-Mart Company had been estimated as many as 1.5
billion to 2 million.

Wal-Mart stores is the world's biggest retailer that owns more than 8400 stores and had
over 2100000 employees worldwide. The law suit was launched in June 2001 that by six female
Wal-Mart employees was the class action lawsuit that workers claiming the Wal-Mart company
about the promotions, pay, management training and also job assignments. The six women asked
for pay back and compensation for all 1.6 million female employees against who has
discriminated. A statistical expects, Richard Drogin, a professor at California State University at
Hayward was hired by the six women who filled the discrimination hwsuit to analyze an
employee records. There was two main groups which is hourly employees at lower levels such as
store cashiers, associates and stock people and the salaried management employees. Salaried
management employees can be divided into two groups, the lower level are those manage a
single store while the higher level are those manage an entire district or region. Since Wal-Mart
promotes predominantly from within, workers typically progress from being an upper hourly
employee to management trainee, to store manager and finally to region manager. The six
women also hired Marc Bendick, a labor economist to against Wal-Mart. Marc Bendick noted
that the company had no trouble in promoting women in their management. 34.5 percent of in-
store salaried managers were women while 56.5 percent of 20 comparabe large were female
salaried managers. The Wal-Mart would have about 4000 in-store female manager,466 more in
corporate headquarters femae managers,about 150 for “blue-collar" nonstore establishments, 107
more in other nonstore establishment and about 100 in reporting establishment.

William T. Bielby,a professor at University of California,who also hired by the women

stated in his analyze and report of Wal-Mart 's hiring practices that the managers at the Wal-Mart
was given no written policies to select candidates who met the minimum criteria of promotion
and in setting the exact salaries. So, gender stereotypes always influence personal decisions
moreover women not considered by their actual skills but was shaped by their manager's
stereotypical beliefs about them. Arturo Mireles who is a store manager proving that he only rely
on subjective factors such as team work and ethics in making decision about promotion to
Department Manager or Support Manager because he has no written criteria to be a guideline in
his decision. The company policy not state the detail about when and how to adjust the payment
or monitoring the number of employee who receive increases.

However,William T.Bielby also note that the Wal-Mart managers believe that in
management position, women have same qualified as men so the discrimination on the women
must be based on individual decision of the manager-self not attributed to the Wal-Mait and the
company was trying hard to make sure their employees get equal opportunity in their work.

There are about more than a hundred of female employees who were came forward
providing their received critism about their work in the Wal-Mart. A store manager in Utah for
example was told to his female assistant that retail is “tough” and “not appropriate"for women
while in Texas,a women were told by their manager to be “bitches” in the Wal-Mart
management and a supervisor in the same state said to his female management trainee that he
don't like college graduates and female manager.

The same woman also told by her next manager to find a husband and have children. In Florida,
the manager explain they paid more than women because they are here to build career and
housewives just need to earn extra money in retail.
In contrary, the company's lawyer claim that there a large group of injured women to
handle and every of them may had different or varied experience of injury in Wal-Mait not lke
the cases that were had by the six women. Wal-Mart moreover used the different system for
compensating and promoting their employees while the wages payment based on their individual
manager not by the uniform company policy.The company ako claim they have held so many
programs to make sure everyone get same regardless of race and gender.
The company has started programs for achieving diversity in early year of 1990s with the
everywhere posted of written antidiscrimination policy while the managers were told about the
gender salaried composition and support women as “reflect the community". They must set an
annual goals which are “realistic”, “achievable”,“made sense”,and “weren't worse than the year
before" to increase the women representation in their area working place. Late Sam Walton
begun the program which allowing the women entering the management job without relocate
their home however the program was be a stranger today after the death of him.

In April 2010, the women case was finally got a class action and December 6, 2010,the
Supreme Court decide to hear the case and make decision for the final determination which
effect the fate of 1.5 million of Wal-Mart female workers and impact on the company significant
material finance but some analysts the company will settle the case before or after the Supreme
Court decided .

Ethical Issue

Ethical issue that was raised by the case of Wal-Mart Women was discrimination women in the

workplace. Job discrimination is an unethical behavior. Discrimination means to distinguish

someone on the basic of prejudice or morally attitude. There are six women who had worked in

Wal-Mart sued Wal-Mart about their paid and opportunity of promotion is less than the men

work in Wal-Mart although their experience, qualification and performance is better than men.

Firstly, we can found that women employee in Wal-Mart earn money less than the men. Based

on the research of Richard Drogin. He is a statistical expert and professor come from California

State University. He found that Wal-Mart employees are divided into two group. There are

salaried management in high level and hourly employees in low level. Salaried managers can

earn $50,000 in but hourly employees just can earn $18,000 in a year in 2001. For example, the

annual salary of district manager, men can made $239,519 but women just made

$177,149.Among full-time employees, women get less than $5000 compare to men. Secondly,

the opportunity of promotion of women is less than the en. According to Richard Drogin, chance

of women will be promoted from an assistant manager to store manager is 10.12 years while men

just need 8.64. In addition, he found that women performance is better than men. For a

performance rating of job sales association, on scale of 1-7, 1 is low and 7 is high. Men get 3.68

and women get 3.75. This figure showed that women has high performance than women. Factors

of women get less promotion because of relocate and policy of company in staffing. Another
sociology expert William T. Bielby, professor University of California. His report noted that

however a company have guidelines for the criteria of promotion, but didn't have written policies

for manager's guidance. Form the research, we can found that glass ceiling will affect in making

decisions about promotion. In a case, a store manager told to his female assistant about retail is

not suitable to women.

Then, compensation received by the men and women worker in Wal-Mart also different. A
research from Drogin in 1996, women were paid less $0.35 per hour than a men the pay gap
between men and women continuous increase to $1.16 per hour in 2001. Another statitic in 1996
showed that, male sales associations get more $0.20 per hour than female sales associations.
Employee in the company have equity, they are fair to have benefit such as retirement benefits,
medical benefits, bonus and so on. Compensation become a motivation for worker.

Next,we noted that less women participated in management of Wal-Mart. A labor

economist, marc Bendick noted another retailer company has 56.5% of female included in
management but Wal-Mart just has 34.5%. So Wal-Mart need to have more than 4000 female
participated in high level of management position. Nowadays, international company promote
diversity in the company. Opinion firom men and women is different. So that,company can
receive a lot of vary business ideas.
According to the statistic above, Wal-Mart suspected in job discrimination. Early in the
1990, Wal-Mart implement a written antidiscrimination rule to overall company but not widely
used.From the lawsuit, Wal-Mart may face a problem of reparation about $10 billion and have to
increase 60% the pay to employee. As a result,Wal-Mart's shares already fell 3.9%. Go vernment
and agencies especially Equal Employment Opportunity Commission(EEOC) need to enforce the
law,Civil Rights Act of 1964 to prevent from discrimination and protect them based on hiring,
compensation, religion, race and sex.
 Conclusion
Refer back to the case background, Wal-Mart stores are the world's biggest retailer and had
over 2100000 employees world wide but there are six female of Wal-Mart employees had
launched a law suit which claiming that the Wal-Mart company had discrimination against
female about the promotions, pay, management training and alkso job assignment in June, 2001.
By this,Wal-Mart could face billions of dollars in demand for back pay and punitive damages.
This matter will let the shareholders of Wal-Mart doesn't trust them anymore and maybe they
will go away to find other company and wanted their money back.
Besides that, according to our opinions, the six female workers should win the lawsuit and
gain benefits to all 1.5 billion to 2 million of female employees in Wal-Mart.This is because
every female should enjoy the same employees' rights that are bestowed on a male colleague.It is
illegal to discriminate against a female employee at any stage of employment. A qualified female
applicant cannot be denied employment because of being women.She has equal right to
promotion, vacation leave and other benefits provided by the employer. The Equal Pay Act
requires that both women and men be given equal pay for equal work in the same organization.
To prevent this lawsuit in future, Wal-Mart had a written antidiscrimination policy
posted everywhere. In 1990s, Wal-Mart had started a number of programs to achieve diversity.
Managers were told that women's representation should “reflect the community”. By many
efforts had been done by Wal-Mart to antidiscrimination,Wal-Mart was named in the “Top 40
Greatest Organizations for Women of Color to Work" in year 2008 by Women of Cobr magazine
as well as one of the“Top 10 Best Companies for Women”by PINK magazine. On May 2007,
Wal-Mart announced it was named one of the “ Top 50 Companies for Diversity” by Diversity-
Inc magazine.

Reference
Frank,T.(2006,April ).A Brief History of Walmart. Retrieved November 2013, 16,from
reclaimdemocracy.org:http://reclaimdemocracy.org/brief-history-of-walmart/
Musgrave, J. (2012, October 04).Female ex-Walmart employees file federal discrimination suit
over promotions.Retrieved November 15,2013,from palmbeachpost:
http://www.palmbeachpost.com/news/business/employment/ex-female-walmart-
 employees-file-federal-discrimin/nSTP4/
Velasquez, M. G. (2012). Business Ethics. United States:pearson.
Young,C.(2011,July 8).Wal-Mart and Gender Discrimination.Retrieved November 2013,
10, from reason:http://reason.com/archives/2011/07/08/wal-mart-and-gender-discrimina

Question 1

What financial impact do you think the lawsuit could potentially have on Wal-Mart? Do you
think the women deserve to win their lawsuit? What if the outcome of the case cost Wal-Mart so
much it had to lay off thousand of its workers and close stores?

Answer
Wal-Mart is such a strong competitor that it is steadily lowering the wages and living standards1
of retail workers who are not even employed by Wal-Mart. The company will face billions of 1
dollars in back pay and harsh damages claims. The real Wal-Mart conflict isn't one of capital 1
versus labor. Consumers and cost-effective producers are challenged against traditional retailers,
1 organized labor, and community activists. 1

Women deserve to win this lawsuit because they have rights as workers or employees as well. 1
Every working female has the same employee rights as her male peers. Discriminating against a 1
female employee at any level of her career is crime. A qualified female applicant cannot be 1
denied services simply because she is female. She is entitled to equal opportunities for 1
advancement, vacation leave, and other benefits provided by the employer. The Equal Pay Act 1
requires equal pay for equal work in the same organization for men and women. The Wal Mart 1
Company will face a dispute from their shareholders because they no longer trust them, and they1
may leave to find another company and demand their money back. As a result of this, Wal
Mart's1 profit decreases because they are unable to run a business properly due to a lack of1
workers and so on. So it appears that during the recession, when management cost-cutting1
strategies were prioritized, with layoffs being the first action usually taken, the impact on1
surviving employees, their productivity, the company's reputation, and real cost savings were
deemphasized. 1
 Question 2

What are the major moral complaints of the females suing Wal-Mart? Do you believe those
complaints are justified? Why? Wal-Mart has said that the case should not be heard as a class-
action, but that each woman should be considered individually and an individual determination
should be made regarding whether she specifically was discriminated against by Wal-
Mart,because each woman's situation is different. Do you agree?

Answer
The main moral complaint of the females suing Wal-Mart is discrimination against female1
employees in promotions, pay, management training, and job assignments, such as: 1
1. Female employees receive fewer promotions to in-store management positions than men. 1
2. Female employees are paid less than men in comparable positions, despite having higher
performance ratings and more seniority. 1
3. There is an unequal distribution of management training among male and female employees. 1
4. Male employees are given better job assignments than female employees, despite the fact that
they are equally qualified, ranked, and experienced. 1
Yes, I believe these complaints are justified because it is clearly stated above that female1
employees at Wal-Mart were not treated fairly and equally. According to Richard Drogin, a1
statistical expert, Wal-Mart employees are divided into two main groups: hourly employee’s
who1 work at lower levels and salaried managers who work at higher levels. Because Wal-Mart
prefers1 to promote from within, employees typically progress from upper hourly employee to1
management trainee, store manager or assistant manager, and finally district, regional, or1
cooperative manager. From one level to the next, compensation rises. Salary manager’s earned1
around $50,000 per year in 2001, while hourly employees earned $18,000. Drogin discovered1
that while 65% of hourly employees were female, only 33% of salaried managers were. Women1
earned less than men at both levels. Drogin discovered that women earned less than men on1
average at each in-store salaried management job, as well as in hourly pay rate. Marc Bendick, a1
labour economist hired by the six female employees who brought the discrimination lawsuit1
against Wal-Mart, noted that Wal-top Mart's retail competitors had no trouble promoting women1
into management. While salaried managers at Wal-Mart in-stores were 34.5% female, salaried1
managers at 20 comparable large retail chains were 56.5% female. If Wal-Mart had achieved1
comparable female manager-to-nonmanager ratios in 1999, it would have had at least 4,004
more1 in-store female managers, 466 more at corporate headquarters, 144 more at "blue - collar"1
nonstore establishments, 107 more in other non store establishments, and 97 more in separately1
reporting establishments. The six women suing Wal-Mart also hired a sociology expert, William
T. Bielby, a professor at the University of California, Santa Barbara, to conduct an investigation. 1
"A large body of social science research demonstrates that gender stereotypes are especially1
likely to influence personnel decisions when they are based on subjective factors, because1
substantial decision-maker discretion allows people to seek out and retain stereotype-confirming1
information while ignoring or minimising information that defies stereotypes," he said. 1
Furthermore, he added, "in such settings, stereotypes can bias assessments of women's abilities." 1
Qualifications, contributions, and advancement potential, because perceptions are shaped by1
stereotypical beliefs about women in general, rather than the person's actual skills and1
accomplishments." 1
I disagree that each woman in Wal-Mart is treated individually, and that an individual1
determination should be made as to whether she was specifically discriminated against by Wal-1
Mart, because each woman's situation is unique. 1
In the nation's 20 largest retail stores, the average proportion of female managers is 20% higher1
than at Wal-Mart. Female employees are underpaid in comparison to male employees.
According1 to Drogin, female employees at Wal-Mart earned about $ 5,000 less than male
employees overall1 in 2001. Dorgin also investigated the fact that women hired as sales1
associates in 1996 earned $0.20 less per hour than men hired in the same year. According to the1
evidence gathered by Richard Drogin, Wal-Mart has discriminated against female employees and
1 does not treat them fairly and equally. 1

QUESTION 3

What factor do you think might account for the discrepancies the Drogin report uncovered?

Answer
The factors that I believe may account for the Drogin report's discrepancies are incorrect 1
perceptions of higher levels among men and women employees, subjective analysis of 1
performance (job experience), and wage and promotion disparities. To begin, there is a factor of 1
incorrect perception of higher level between men and women employees. Drogin discovered that 1
while 65 percent of hourly workers were female, only 33 percent of salaried managers were. 1
Hourly employees include store cashiers, associates, stock people, department heads, and
support1 managers, while salaried managers include store managers and assistant managers, with
district1 managers, regional vice presidents, and senior vice presidents above them. 1
Second, the factors that I believe may account for the discrepancies revealed by the Drogin
report1 are based on subjective evaluations of performance or job experience. According to
Drogin's1 report, women left their jobs at a higher rate than men, possibly to raise children or for
other1 reasons. Women would have a higher turnover rate, while men would have more
experience and1 seniority. Drogin discovered, however, that women stayed in the workforce
longer than men at1 Wal-Mart and thus had more on-the-job experience on average than men. 1
Finally, I believe wage and promotion disparities may account for the discrepancies revealed by 1
the Drogin report. He discovered, for example, that women hired for hourly jobs in 1996 were
paid1 $0.35 less per hour than men hired for hourly jobs that same year. By 2001, the wage 1
disparity1 between these same employees had grown to $1.16 per hour. Additionally, women
hired1 as sales associates in 1996 received $0.20 per hour less than men hired as sales associates
that1 year. By 2001, the wage disparity had grown to $1.17 per hour. Finally, Drogin ran several 1
statistical tests to see if the disparities in promotions and pay were due to women not being 1
available when the promotions were released. 1

QUESTION 4

What if anything, do you think, Wal-Mart should do to correct these discrepancies? Should the
company institute an “affirmative action” promotion program for fe male employees? If so, what
should this program be like?

Answer

If there exists discrimination within the company. To address these disparities, Wal-Mart should 1
provide opportunities for female employees to advance within the organisation. Women 1
employees can also successfully manage and develop an organisation based on their skills, 1

knowledge, and talent. Women can also hold positions of integrity and as the best managers.
There1 should be no pay disparity between men and women, and women should not take longer
to1 advance1 than men. Women employees have the right to be paid more than male employee’s
for1 their work, as well as the right to be promoted before men if they are more capable and
perform1 better than male employees. 1

Everyone should be educated on their legal rights. Employers and competent manager’s must 1
follow the laws outlined in the Employee Act and the Trade Union Act in order to provide
proper1 rights to workers without discriminating against women. I believe the company should
not1 implement an "affirmative action" promotion programme for female employees. Manager’s1
simply1 need to promote fairies based on their potential and knowledge. To implement an 1
affirmative1 action programme would be to favour women. Men should begin to be
discriminated1 against, and if the company begins to favour women, the men will complain. 1