Ethical Dilemma 1: Should Wal-Mart Close a Store because It Unionizes? Scenario:

Question

Ethical Dilemma 1: Should Wal-Mart Close a Store because It Unionizes?

Scenario:

In February 2005, Wal-Mart closed a store in Quebec, Canada, after its workers voted to form a union. The decision has ramifications for various stakeholders, including employees, customers, and stockholders. In analyzing and arriving at a resolution to this dilemma, assume that you’re the CEO of Wal-Mart, but ignore the decision already made by the real CEO. Arrive at your own recommendation, which may or may not be the same as that reached by your real-life counterpart.

Before analyzing this dilemma, go to the Washington Post Web site (http://www.washingtonpost.com/wp-dyn/articles/A15832-2005Feb10.html (Links to an external site.)Links to an external site.) and read the article “Wal-Mart Chief Defends Closing Unionized Store.”

Explanation / Answer

Below is what can be done to resolve the ethical dilemma of shutting down as store due to the unionization and pressure from the labor -

1. Every decision should not just be profit-centric though the ultimate objectove of Walmart or any firm is to earn profits for business. Closing a store because it is unprofitable is not correct.

2. Since Walmart had multiple negotiations with the union but failed to reach an agreement, it should clearly make the union understand the implications and the decision it has to take if all the demands need to be met. The labor unions should understand the situation of Walmart before walking away.

3. The case would have been provided for arbitration and Walmart would have waited for the decision by clearly presenting its side of the issue rather than shutting it down by fearing the decision.

4. Both the parties should have reached middle ground which is atleast partially beneficial to each. The firm should have then concentrated on efficiency and productivity improvement of the store which helps in making it profitable.

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