One of the main ethical dilemmas that a store manager working for Wal-Mart might be faced with is a conflict of interest. He/she has been placed into a situation where there is no right or wrong answer, but rather a right, and right answer. Does he choose the role of being a good manager, and risk the managerial position? Or does he act upon the “unethical” commands of his superiors in favor of keeping his job? Three underlying elements further complicating his decision to make ethical choices are discussed in this essay.
These are identified as self interest, greed, and obedience to authority, and will be discussed using Ghillyer’s three-step process of analyzing the consequences, analyzing the actions, and making a decision where the ethical dilemma can be resolved, or at least diminished (Ghillyer, 2008, p. 11). Self interest could have been a contributing factor to his decision making, which resulted in a class-action lawsuit, costing the company $50 million. Self interest can be categorized under one of the three ethical theories, virtuous ethics, which places its value in living life according to the commitment to the achievement of a clear ideal.
For example, “What sort of person would I like to become? ” (Ghillyer, 2008, p. 7). An ideal goal for the manager could be to provide a shelter, clothing, and food for himself and/or his family. These are the basic innate impulses or drives in human beings, that explain the well known evolutionary theory of Survival of the Fittest. In the Wal-Mart example, this is demonstrated by the manager attempting to benefit himself by taking as many incentives (money) offered by the corporation, despite the unethical methods involved.
These incentives are annual bonuses for the managers of the stores that remain within the Total Payroll Expense. The methods used to stay within this report included; “Off-the-Clock Work” where employees were forced to work after clocking out, and “one-minute clock-out” when employees failed to clock in after their lunch breaks. According to this belief, was the manager acting unethically or simply taking advantage of bettering himself financially? Money and greed could have further influenced his decision.
As the common perception that money buys one’s happiness shows, money is believed to be a very important factor in life. The strive to have more of it seems common, as a questionnaire published in Jim Warner’s book, “Aspirations of Greatness” shows. This was conducted in order to determine the importance of money to 200 CEOs. The results claimed that 70 percent’s rating of “Financial Independence” as being “very important”, and having number one priority in life. (Hersey & Hoyk, 2008, p. 33). With such a great desire for money, greed becomes inevitable.
In 2002, the store managers received a salary of $52,000 with potential annual bonuses bringing salaries to between $70,000 and $150,000. (Stanwick and Stanwick, 2009). Thus, having a potential salary increase of three hundred percent would make anyone consider doing something ethically incorrect. As well as that, Francis Bacon has stated “if money be not thy servant, it will be thy master. ” (Ciulla, Martin and Solomon, 2007, p. 118). This confirms that greed is a major contributing factor to people’s unhappiness, which often results in criminal behavior. (Ciulla et al. 007, p. 119). This is shown where managers would delete overtime pay on the payroll computers in the Wal-Mart case which resulted in the corporation paying $33. 5 million in back wages. Hersey and Hoyk state that a corporational environment “is a hierarchical organization similar to the military. ” Obedience to authority is expected. “What the boss says goes. ” (2005, p. 20). In this case, Wal-Mart managers were told to keep labor costs under 8 percent of sales or else there were consequences which resulted in demotion, and consequently the loss of employment.
Bos, Jones and Parker even go as far as linking the holocaust with obedience to authority. Questions such as, “Was he doing wrong? ” and “Were they acting unethically? ” were asked and always responded with “I was just following orders”. (2005, p. 82). This attitude of “What the boss says goes” could be linked to desensitization of guilt and shame. If guilt and shame provoking behaviors are repeated, those negative feelings linked with the act begin to diminish, and over time, contain less impact than they did before. (Hersey & Hoyk, 2008, p. 112).
In his first time of clocking out a worker, the store manager might have felt guilty and shameful, however, he would have held on to the fact that it was the command of his authority to stay within the labor cost budget. After the second time of clocking the worker out, the feelings of guilt and shame will have begun to desensitize. He would no longer associate guilt and shame with his wrongful act. Using the first step of the 3-step process, we begin the analyzing process. This will be done by asking and answering questions such as the following; who will helped? who will be harmed? nd what kind of harm are we talking about?. The biggest harm is the loss of instrumental value, which in this case, is money, followed by the loss of employment for the manager and employee, and possible legal action. Who will be helped and who will be harmed are, in essence, the same question because they require insight. The corporation, manager, employee, and customer could be helped/harmed (depending on whose perspective is taken), and this can be considered on a continuum of degree of harm (or benefit, again, depending on the perspective) which all have an interrelated effect on each other.
Not one of those components can survive without the other, the happier and the better off that each component is, the better the business will function as whole. In step 2, we analyze the actions. In this case study, the following questions will be asked, and answered; how do the actions measure up against moral principles like honesty, fairness, equality, respecting the dignity of others, and people’s rights? do any of the actions cross the line? and is there a way to see one principle as more important than the others?
The actions of the corporation are unfair, due to the fact that the manager is placed in a situation where there is no right or wrong answer which is shown in the labor cost budget. This is further emphasized by the manager’s employment being at threatened if the budget is not met. Deleting over-time hours on the payroll computer is very dishonest behavior on the manager’s behalf and degrades the dignity of the employees. All of the actions stated above cross the line as they are unfair, dishonest and degrading.
The root of the problem lies in the labor cost budget and should be looked at as having importance above all others. Step 3 in Ghillyer’s 3-step process to solving an ethical dilemma is to finally make a decision. This is done by using the information gathered in subsequent steps. Considering the situation that the managers and employees have been placed in by the corporation, I believe that Wal-Mart’s labor budget should be looked at in further detail. The corporate objective was to keep labor cost at 8 percent of sales, which, for large retail chains, the industry average is between 9 and 10 percent.
In 2005 Wal-Mart annual sales were close to $300 billion, and labor costs therefore were $24 billion. An increase in the budget by 1 percent would dramatically reduce the pressure that managers are faced with, and actions like “one-minute clock-out”, and “off-the-clock work” would not need to occur. In the event that the above suggestions are taken into action, approximately 170,000 employees could be hired with the extra $3 billion. In my opinion, this would be the solution to this ethical dilemma. ( 300*. 09 = 27-24 = 3 billion / $17680 ).
Furthermore, interestingly enough, when all the values of the lawsuits were added up, even with the exclusion of time spent, and legal fees, Wal-Mart had spent close to $3 Billion. In conclusion, the mangers of Wal-Mart were faced with an ethical dilemma of Conflicts of Interest; this further branched out to areas of self interest, money and greed, and obedience to authority. Using the 3-step process I have come to the conclusion that this ethical dilemma could have been resolved by increasing the labor budget by 1 percent and bringing Wal-Mart up to the industry average.
REFERENCES Bos, R. t. , Jones, C. & Parker, M. (2005). For business ethics. New York: Routledge. Ciulla, J. B. , Martin, C. & Solomon, R. C. (2007). Honest work: A business ethics reader. New York: Oxford University Press. Ghillyer, A. (2008). Business ethics: A real world approach. New York: McGraw-Hill/Irwin. Hersey, P. , Hoyk, R. (2008). The ethical executive. Stanford: Stanford University Press. Stanwick, P. A. & Stanwick, S. D. (2009). Understanding business ethics (1st edition). Upper Saddle River, New Jersey: Pearson Education.