BUSINESS ETHICS AND CORPORATE GOVERNANCE CASE: WALMARTS WOMEN

GROUP 2 SECTION 1 Anand KV Harshita Preetam Insha Rehman Nittish V Srinivassan Rajan Tejas Nahar

1. What financial impact could the lawsuit potentially have on Walmart? The financial burden post losing the lawsuit would be immense. If the company lost the case, the compensation and back pay had to be provided for almost 1.6 million women ranging from hourly paid employees to regional VPs. The difference in wages with respect to men are as follows: Hourly paid Salaried employees Regional VPs District Manager Store Manager Co-manager Asst. manager Mgmt. Trainee 6% 26.22% 33.2% 26.04% 15.5% 5.4% 6.2% 3.4%

The women deserve to win the lawsuit as they were been discriminated by a company that upholds one of its company values as Respect for the individual. An amicable solution is to amend the company policy that women are treated more fairly and it would create a more competitive environment for the women to work. An out of the court settlement would also save the company from layoffs and store closings. 2. What are the major moral complaints of the females that are suing Walmart? The women are paid less than men in comparable positions, even if they have better performance ratings and higher seniority. They also received fewer and had to wait longer for promotions. In an era where women stand up to the prowess of men, there shouldnt be a restriction on women and discounting their efforts in the case. Treating the case with respect to each woman as an individual does not do any good. The general scenario takes into account that no role in the society is limited to one gender. 3. What factors do you thing might account for the discrepancies the Drogin report uncovered? The report contains the differences in the compensation awarded to both the genders on averages alone. The problem of using averages is that if you have outliers or several numbers that fall more towards the outsides, it may show inaccurate results. In the case of Walmart also, the finding should be based on the variances in salaries between the two genders who have the years of joining as same. Further, the report should have also included as what is the standard deviation in the compensation awarded to men and women employees. Another cause for discrepancy could be the no. of paid/unpaid leaves taken by men and women. As women would have to take maternity leaves, which though is a paid leave, might miss out on promotion and thus salary during the time they were on leave.

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 female employees? If so, what should this program be like? The company as such is not biased towards the female employees and in fact has a very robust program for gender inclusivity. The problem has arisen because of the insensitiveness of the individuals in charge of promotion and compensation. Thus the management needs to bring in a black and white model of promotion. Further, the SamWalton practice of giving women the option of opting out of relocating their homes must be brought back. Any raise in wages awarded by the manager to employees at store levels should be questioned at his appraisal time so that there is transparency in the system.