(100 points)
Instructions: Read the following case study and prepare an argument for the
three questions at the end of this study. Answer to each question should be
approximately 3 pages (12 point font, page margin 1 inch, double spaced).
Grading would be based on development of logical argument as well as writing.
You must research external resources (literature search, web, other publications
etc.) to support your argument. These references should be listed at the end. You
need to name your file as Last name_ First name_Case study (For example I would
name my file as Sharma_Rajesh_Case study) and upload it to the blackboard by
August 16th.Wal-Mart Stores, with 1.3 million employees, is the biggest private employer in the United
States. In 2004, the company also became the defendant in the largest-ever class action lawsuit
charging sex discrimination. According to the original lawsuit, filed by six women, Wal-Mart
systematically denied them the pay levels and promotion opportunities available to its male
employees. A federal judge found that the company’s practices raised the possibility that unfair
treatment was a pattern, justifying a class-action lawsuit and meaning more than a million
female employees could receive damages if Wal-Mart loses the case.
The complaint launching this lawsuit arose when a female assistant manager in California Sam’s
Club discovered that a male assistant manager was earning $10,000 more per year than she
was. The woman, Stephanie Odle, inquired and was told the reason for her male co-worker’s
higher pay: He had a wife and children to support. Odle received a raise but only after
submitting a household budget, and even with the raise, her pay remained below that of her
male colleague. Odle claims she was later fired for complaining and she took her case to Equal
Employment Opportunity Commission. Eventually her complaint was combined with that of
other female Wal-Mart employees.
The plaintiffs in the lawsuit use numbers to make their case. They point out that two-third of
Wal-Mart’s hourly employees are women, yet slightly one-third of its managers are women.
Among the top managers of Wal-Mart’s stores, only 14 percent are Women. In addition,
according to lawsuit, female Wal-Mart employees in hourly jobs earn 5 -15 percent less than
men holding the same job.In its defense, Wal-Mart points out that most employment decisions are not made at its
headquarters but within each store. As a result, the company cannot be engaged in a pattern of
discrimination. Also, Wal-Mart says the pay gap does not exist in 90 percent of its stores. With
regard to the low proportion of women in management ranks the company says the cause is
that a low proportion of women apply for promotions. The company also noted that it expects
managers to move more frequently; presumably, female employees are less likely than men to
accept this career requirement.
Some recent changes at Wal-Mart could make treatment of employees more evenhanded. The
company hired a director of diversity, restructured pay scales and contracted with consultants
to rewrite job descriptions. Executives’ bonuses are partly based on meeting diversity-related
goals. A new electronic system enables employees throughout the company to apply for
management training. Until a few-years ago, only hourly jobs – not management jobs – were
posted within stores; most retailers post all job openings as a way to show the fairness of their
promotion practices. Christine Kwapnoski, one of the parties to the lawsuit, complained that
she wanted to become the supervisor, but the Sam’s Club where she worked lacked an
application process, so she had to rely on word of mouth. According to Kwapnoski, her male coworkers spent more time socializing with management, so they had better access to
promotions. (She also said she was told that if she wanted a promotion, she should “doll up.”)
If Wal-Mart works with the government to settle the case, it is likely to make further changes.
Some companies that have settled similar lawsuits have agreed to accept a court appointed
monitor to supervise the company’s employment practices. Another common result ofdiscrimination settlements is for the employer to establish objective criteria for measuring
employees’ performance.
1. Wal-Mart’s vision is to achieve superior customer service and low prices by applying
three basic beliefs of founder Sam Walton: “respect for the individual, service to our
customers, and strive for excellence.” How might workforce diversity help a company
fulfill this vision? How might diversity make this vision more challenging to achieve?
Based on the information given in this case, how well do you think Wal-Mart has fulfilled
its vision?
2. Defenders of Wal-Mart point out that a company with more than a million employees
cannot be expected to ensure that every single person is treated fairly; it has to trust
lower-level managers to do the right thing. What general requirements does this
viewpoint place on store managers and department supervisors?
3. Prepare an argument supporting either the female employees’ charges or Wal-Mart‘s
defense. Look up recent news stories about the case, and see if they contain additional
facts you can use to support your argument.