Target & Walmart: YAY or NAY?
FORTUNE: Bringing you the GOOD, the BAD, and the UGLY
Since the early 1990’s, Walmart has been one of North America’s largest retailers, second largest corporation and largest employer (employing 2.2 million people worldwide within 10,000 stores in 27 countries). As of November 2013, Walmart has had a revenue of $469.16 billion, a steady increase in their five year trend from 2009’s $401.09 billion. Their costs of goods sold has also had a steady increase, from $304.06 billion in 2009, to $352.49 billion in 2013. As well, Walmart is seen as an “economic bellwether” (leader), accounting for 10% of all spending with the US. Walmart has a large network of international business, with stores in China, India, United Kingdom and South Africa. Throughout the economic recession, Walmart was capable of maintaining its strong international business, as it continues to account for a quarter of its overall revenue. From the start, their logo was to “Provide the lowest prices anywhere, anytime”. However, the 5,000 lawsuits filed against Walmart each year (the equivalent of 17 lawsuits each day) says otherwise. The labour rights, environmental impacts and business practices are all valid reasons as to why Walmart is an unethical company. Walmart helps exemplify the detrimental impacts of selfishness and lack of social corporate responsibility on a global scale.
" Our goal is simple, to provide a brand that’s true to Target and the uniqueness of Canada."
One of North America's fastest growing retailers, Target has opening up more than one thousand stores, US wide and one hundred stores, Canada wide! Just a small representation of the large impact it has had on the world. Competing with retailers such as Walmart and Kmart, Target has quickly made a mark on international business which has been evident thought out the years of conscious business.
Founded: Minneapolis, Minnesota, US.
Chairman: Gregg Steinhafel (CEO, Chairman and President)
Number of Locations: 1, 921 world wide // 1, 797 (US) // 124 (CA)
Revenue: 73.301 billion ($US)
Target and Walmart: The Highs & Lows
Ethical Issues The CFA (Chartered Financial Analyst) Institute is a non-profit organization of investment professionals. They have a strict set of ethics, which can be applied to all companies. Their main codes of ethics include: placing the integrity of the professionals and the interests of the clients above your own, acting with integrity, competence, and respect, and maintaining and developing your professional competence (CITATION). In comparison, it is clearly seen that Walmart fails to meet this set of criteria. They place their own interest of creating more profit above their supplier’s interests of safe working environments, caused by a high degree of selfishness. There is a lack of integrity and respect, predominantly with their international business partners, seen through the high amount of sweatshops which produce garments for Walmart brands, like Fruit of the Loom. Walmart fails to maintain and develop their professional competence by failing to acknowledge their wrongdoings. For example, this is clearly seen in many occasions when Walmart provides reasoning for their sweatshops relations by explaining that they have taken no responsibility for these actions, yet these are the wrong-doings of the brands, like Fruit of the Loom. Walmart’s failure to acknowledge their mistakes and act upon those demonstrates their lack of corporate social responsibility, and why they are such an unethical multi-million dollar corporation.
Throughout the years, Walmart has had ongoing battles with a number of different lawsuits due to a various number of issues, the most prominent being labour rights. In April of 2011, Walmart issued a statement clarifying its ethical controversies by explaining that it had severed ties with a number of different companies in Bangladesh due to labour violations, safety hazards, and unauthorized sub-contracting. Two years later, in April of 2013, after a Bangladesh factory collapsed, Walmart reissued a similar statement re-assuring its severed ties with these companies. However, according to various interviews and US documents, this allegation is proved to be wrong, as Walmart continues to receive shipments of garments like sports bras from two of the apparent “severed tie” companies (Mars and Simco Dresses). Walmart continues to employ individuals in factories within low wage countries, yet no initiative is being taken in order to provide these employees with better working conditions. International labour groups are pushing for companies like Walmart to sign an accord to improve the working conditions in low wage countries like Bangladesh. Large, international corporations like Tommy Hilfiger, H&M and Calvin Klein have already signed on, which creates a looming question: why hasn’t Walmart? As well, it also sparks the notion of one of two ideas: Walmart either doesn’t have a stable and sufficient control over their company, or they are just providing customers with the things that they want to hear. Walmart chooses to back up their decision by explaining that they are working on a “non-legal binding” contract for 2014, which creates larger issues like the lack of unions. Either way, Walmart is failing ethically by lacking the honesty and integrity that a company needs in order to succeed. Suspicions continue to be prominent within Walmart, as they conduct their own audits for their international suppliers yet fail to provide all their findings. This gives them the ability to manipulate the results in order to provide customers with the things they want to hear, and continue to provide these overseas employees with poor working conditions and unsafe working environments. Walmart is a large “anti-union” corporation, and takes the notion of unions quite seriously. Unions give employees the ability to have a voice of reason within a company, an active part within the corporation and an increase in benefits. Walmart does not tolerate unions, as they would increase the uprisings against their unethical decisions and cause employees to have a say in the way the corporation is run. In 2009, a store in Quebec was successfully unionized, then closed down shortly after due to “economic reasons”. Unions provide workers with benefits and rights, and Walmart benefits from having control over their employees in order to save money (labour violations through cheap suppliers), and controlling the overall direction of the company. On the contrary, in august of 2011, Walmart complied with a union in China, in order to please one of their largest trading partners. This exemplifies their wavering standards, as they are willing to make exceptions as long as profits are driven. In 2009, the International labour rights fund launched a lawsuit against Walmart for violating workers’ rights in foreign countries, by denying minimum wage, forcing overtime and physical violence against their oversea employees. If certified, 100,000 to 500,000 workers in countries like Bangladesh and China would be saved from these horrid working conditions. In a cost-benefit analysis done by Walmart themselves, the report stated that it was “cheaper to wash the blood off the clothes before they shipped them out rather than providing gloves for employees”. This statement clearly demonstrates their failure in providing adequate safety equipment for their employees. In a statement made by Sam Walton (founding retailer of Walmart), he states that “Personal and moral integrity is one of our basic fundamentals and it has to start with each of us.” Clearly, Walmart is failing to comply with these standards, unless their moral integrity deals with providing a life of pain for millions of under-paid employees around the world. In 2012, Walmart released another statement claiming they would begin to hold suppliers more accountable for working conditions. The downfall of this is that Walmart is failing to acknowledge their hand in these poor working conditions. They are failing to take responsibility for their involvement within these factories, and are continuing this cycle by not providing better working conditions for these employees. In November of 2013, the office of Inspector General released a report of Department of Labor’s agreement with Walmart over child labour violations within countries like Bangladesh and China. Walmart was eventually fined $135,540 for child labour violations between 1998 and 2002, yet still failed to release an apology for their wrong doings. Walmart continues to provide contradicting actions and responses as each year goes by. When Hurricane Katrina hit New Orleans, Walmart donated $17 million to the relief efforts. As beneficial as this may be for those affected in Katrina, how come they have such an incredible amount of money to donate to New Orleans, yet not enough to put towards the improvement of work conditions with their suppliers? In 2003, immigration officials arrested 245 workers from 60 stores who were illegal immigrants employed by Walmart. All in all, it is seen that Walmart has indefinite standards and morals within their company. They highly value honesty, yet will do anything to cover up the mistakes they create. They highly value integrity, yet fail to admit to their wrongdoings and blame other companies for their own actions.
Environment • Only 4% of Walmart Energy is generated from wind power, unlike McDonalds and Starbucks which are way ahead. • Walmart is spending a growing amount of money on generating power, whereas they could be saving money and the environment through environmental initiatives like wind power. • The government is losing money and gaining a growingly negative reputation due to the lack of environmental initiatives from one of the nation’s largest corporations.
Cost: Environment • Greenhouse gas emissions are seen to be growing, not shrinking. • Greenhouse gas emissions release a toxic form of radiation into the atmosphere, weakening the ozone layer and increasing the rapid process of global warming. • From 2005 to 2011, the amount of gas emissions grew from 18.9 million metric tons to 21.5 million metric tons (not including pollution created by ocean shipping and the clearing of land for development). • Government is once again affected by the derogatory environmental reputation brought on by Walmart
Cost: Labour Laws • Canada gains a reputation of a nation that accepts international sweatshops are a valid form of suppliers.
Cost: Anti-Unions • Canada is a free nation, yet Walmart contradicts this notion by the use of anti-unions values • Walmart restricts its employees from having a voice of reason or any hand in the direction of Walmart
Investors Cost: Shares • The values of Walmart’s shares are diminishing as people are less interested in investing in a company with unstable ethics and unethical practices.
Cost: Loss of Merchandise
• Getting rid of popular merchandise during the recession in order to make room for lower-priced goods • Slashing prices on select items
• Transparency in all business practices: Walmart clearly demonstrates the detrimental, global impacts of the lack of transparency in business practices. It should be essential that all businesses display what their company is doing in all parts of the world, and how they are conducting business. This will prevent future companies, like Walmart, from participating in unethical activities, like child labour and the unfair treatment of international employees. • It is essential that a company provides the same rights to its international employees that it does to its domestic employees: This means that all of the benefits that a company’s domestic employees are given should be mandatory to be given to all international employees as well. This is improve the working conditions of international employees and ensure that a company’s standards and moral ethics are stable and secure. Companies like Walmart will no longer be able to ship out work to foreign countries (i.e. Bangladesh) and provide a lack of safe working conditions, yet get the same work done. This provides everyone with the same rights and equality that all employees deserve. • The rights of all workers should be discussed and negotiated with workers. This means that in the case that an ethical issue arises, the workers should be able to have a say in what they believe their rights are. In the case of Walmart, where they do not support unions, this also gives employees the ability to have a part in a company without being given all the benefits. This guideline favours both the employees, as well as the company. • Corporations must take full responsibility for their actions and their part in any unethical action: As seen in Walmart, they failed to take responsibility for their actions in cases like the Fruit of the Loom child labour scandal. This ethical guideline will ensure that every corporation takes full responsibility for their actions or lack thereof within any situation, and must provide evidence and support to their arguments. This will ensure that any individual, corporation or nation that is being mistreated by a company will get the compensation they deserve and that the mistreating company will pay the justice.
Decades of history is presented as Target was founded in 1902 by George Draper Dayton, after exploring throughout the Midwest Markets. Going through various business opportunities, Dayton decides to choose Minneapolis to further expand to form Dayton Dry Goods Company, today known as Target Corporation. Passing away in 1938, Dayton's sons and grandsons took over the already successful company, which has grown into a nationwide corporation.
Target has been an influential company that has impacted North American culture in various ways, for numerous decades! It has not progressed exponentially in revenue, but with the help of other organizations and charities. Target has always been an active member of the community, starting various projects that help children
1918: George D. Dayton creates The Dayton Foundation with a $1 million dollar ?? and the willingness to promote the welfare of humanity all over the world, by providing aid.
1999: St. Jude Children's Research Hospital, an organization committed to helping people regardless of pay, plans to buy a hotel to assist people with their housing challenges. Target plans to fund for Target house, an organization that helps families with children that are undergoing treatment with chronic illnesses. Since opening, Target has helped more than 1,337 families all across 42 states and 36 countries around the world.
2005: Designer Deborah Adler partners with Target to create ClearRx, an innovative pharmacy concept that improves the way people take medication. The product provides an easy to read bottle and colour coded rings, which helped minimizes the chance of taking the wrong prescriptions.