Business Ethics Case Analyses: Walmart: Firearms and Ammunition Returned to Store Floors (2020)

Abstract:

Walmart was founded on July 2, 1962 in Rogers, Arizona by a man named Sam Walton. Over the years, Walmart has become the largest retail store in America, with 4,756 stores, and 1.5 million employees. In 2019, at the end of Walmart’s fiscal year their revenue total was above $514 billion dollars. Walmart’s great success over the years has recently been shadowed by some controversial headlines in the news. Over the summer massive protests emerged all across the U.S. mainly due to the death of George Floyd, the Black Lives Matters movement, and Covid lockdown disagreements. Some of these protests turned violent and many buildings were damaged including several Walmart locations. Due to the unsafe environment, Walmart removed all of their firearms and ammunition off of store floors and moved them into a secure room in the back of the store. There have been previous deadly incidents regarding firearms at Walmart stores and many customers are begging for Walamart to stop selling them. This case brings up the four ethical theories which includes Individualism, Utilitarianism, Kantianism, and Virtue Theory. Individualism validates Walmart selling firearms and ammunition because they are profiting off of these products within the law. Utilitarianism maximizes happiness for Walmart’s hierarchy because it is making them more money, but if we expand Utilitarianism to a public level people are upset that Walmart is still selling firearms and ammunition. Kantianism is demonstrated through Walmart making the right decision to remove firearms and ammunition from store floors because it was the right move to make. Virtue Theory shows that Walmart is justified for selling Firearms but at the same time unjust because it can make for a dangerous environment. An action plan to overcome this issue would be to indefinitely keep the firearms and ammunition in a secure location and not out on store floors for everyone to see. This will allow for firearms and ammunition to continue to be sold and it puts uneasy customers at ease.

Case Controversy:

Protests have been transpiring all across the country recently due to police brutality and COVID lockdown protocols. Several of these protests have become violent and many protesters have been seen with firearms, and this has business’ worried all across the country. Many stores have taken extra precautionary measures against looters by boarding up windows and hiring additional security to prepare for potential property damage that may occur. A spokesperson for Walmart said that several Walmarts across the country had been damaged. The conditions at several hundreds of Walmarts were so bad that they had to close a couple hours early so employees could get home safely. With all the unrest and possible store looting, Walmart made the decision to remove all firearms and ammunition from store floors and transfer them to a secure location in the back. As protests are becoming more isolated according to a Walmart spokesperson, they are beginning to bring the firearms and ammunition back onto store floors.

Walmart has become extra cautious with their handling of firearms because they have a very unpleasant past with them. In 2019, a 21-year-old man shot up a Walmart in El Paso, Texas. He killed 22 people and injured 26. Crusius was charged with capital murder and if convicted he could face the death penalty. After this horrific incident occurred, Walmart announced that they were going to stop selling ammunition that is used in semi automatic rifles and handguns. With Walmart becoming the site of shootings there has been an increased amount of pressure by gun control advocates, customers, and employees to address gun violence. Walmart employees have circulated a petition around, and some have even called for a walkout over the issue. The petition states “We value Walmart and our fellow associates, but we are no longer willing to contribute our labor to a company that profits from the sale of deadly weapons.” The petition has attracted more than 126,000 signatures.

Burt Flickinger III is a veteran retail analyst with Strategic Resource Group, and he estimates that the U.S. retail gun sales totals about $11 billion a year. Walmart makes about $220 million a year on guns, and overall the company made $331 billion in its latest fiscal year. Walmart’s gun sales represent less than a tenth of a percent of Walmart’s business in the U.S.. Flickinger has also pointed out that Walmart’s firearm sales have fallen about 6 to 8 percent and are becoming less important to Walmart. A big reason why Walmart will not fully stop selling firearms is because their founder Sam Walton was big on guns and an avid hunter. Walmart has moved away from semi automatic firearms and has moved towards selling hunting rifles.

Looters Break Into Walmart at Grossmont Center – NBC 7 San Diego

Looters spotted at a Walmart in SanDiego, California

Stakeholders Identified:

The stakeholders include management, employees, customers, and investors in the company. Walmart’s management has faced an extreme amount of pressure from the public to stop selling guns because people do not feel safe in their stores with guns displayed on the walls. Management has made promising steps by now only specifically selling hunting rifles, but with all the unrest in the world right now people want more action to be done. Investors and shareholders in Walmart are affected because as gun sales continue to plummet at Walmarts and stores are being forced to close early due to all the civil unrest it deeply affects the profits that are being returned to these investors and shareholders. Employees and customers do not feel safe working and shopping at Walmarts right now. After the 2019 shooting at a Walmart in El Paso, Texas and all the looting that is occurring right now which forced Walmart to move all firearms to a secure location, people are tired of feeling unsafe in these stores and want Walmart to officially stop selling firearms so they do not end up in the hands of the wrong people.

Gunman enters the Walmart in El Paso, Texas, 2019

Individualism:

Milton Friedman was a Nobel Prize recipient for economics. Friedman came up with a way to examine companies through an individualistic lens which he called Individualism Theory. According to Friedman, this theory states that “The only goal of a business is to profit, so the only obligation that the business person has is to maximize profit for the owner or the stockholders within the law of the land” (Salazar 10). Friedman believed that if a company's main goal was not to maximize profits then they are acting in an unethical manner.

From an individualistic point of view, Walmart has done nothing wrong with their handlings of selling firearms. No crime has been committed, and they are profiting off these products legally. Even though firearms and ammunition are not a heavy seller at Walmart, it would still damage the company’s profits if they were taken off store shelves. According to CNN Business, CVS had a drop in sales when they stopped selling tobacco products, and Dick’s Sporting Goods sales took a hit when they decided to stop selling assault style weapons. Both of these products from CVS and Dicks were not popular sellers at their stores, but removing any product from a store will dip sales. If Walmart wants to continue following Friedman’s Individualism Theory then they need to continue selling firearms to keep profits maximized.

Utilitarianism:

John Stuart Mill was an English philosopher who is considered to be one of the most influential British philosophers of the nineteenth century. He contributed to social theory, political theory, and political economy. Mill’s Utilitarianism Theory states “We ought to bring about happiness and pleasure in all beings capable of feeling it” (Salazar 6). The only two things that matter from a Utilitarianism stand point is happiness or pleasure. The main goal of Utilitarianism is to maximize self-happiness and the happiness of others. From a Utilitarianism perspective, Walmart has failed to maximize the happiness of others. Many Walmart employees have expressed their dissatisfaction and safety concerns about firearms in Walmart with a petition that has received over 126,000 signatures. After the deadly shooting that occurred at a Walmart in El Paso, Texas in 2019, many customers did not feel safe entering one of their stores. Employees have expressed concerns that they do not want to work at a store that sells deadly weapons to the public. To some extent, Walmart does realize that firearms and ammunition can become a dangerous issue at their stores because when all the looting was occurring all firearms were moved off shelves into a secure location.

There will always be an unhappy group involving this issue. If Walmart bans firearms and ammunition indefinitely then gun activists would be upset, and if Walmart does not take complete action on this issue then anti-gun activists, employees, and customers are upset. Walmart has attempted to meet somewhere in the middle by turning their focus on only selling hunting rifles for sporting reasons only. Happiness has only been maximized for the higher up business people in charge of Walmart and the stockholders because they are still making a significant amount of money regardless of what the employees or customers are saying.

Kantianism:

Immanuel Kant was a German philosopher. He did work in many different categories including epistemology, metaphysics, ethics, and aesthetics. Kant’s brilliant work has made him one of the most influential figures in modern Western philosophy. Immanuel Kant’s biggest ethics theory was the theory of Kantianism. This theory has four basic principles “1. Act rationally - don’t act inconsistently in your own actions or consider yourself exempt from the rules. 2. Allow and help people to make rational decisions. 3. Respect people, their autonomy, and individual needs and differences. 4. Be motivated by Good Will, seeking to do what is right because it is right” (Salazar 2). Kant believed that it is very wrong to manipulate, exploit, or use people. You should never lie, cheat, or harm others just to get your way. It is very important to do the right thing all the time no matter what the consequences are.

Walmart has not lied about anything to their employees or customers. Everyone realizes the very serious negative effects that guns can cause on society, but in the end it is Walmart’s choice with what products they decide to sell. Walmart has done what is right by removing guns from store floors during the looting period. They realized that leaving guns out would be very unsafe, and they took the proper precautions considering the circumstances of an unsafe environment. In a small way Walmart is slightly taking advantage of their customers because they know whether guns are being sold or not customers will be spending money at their stores. But overall, Walmart has stayed true to their company’s roots which is that some sort of gun will be sold. Walmart has been very straight forward with the public over this issue. Walmart’s founder loved guns, and many people believe that getting rid of all firearms is like forgetting about founder Sam Walton.

Virtue Theory:

The four virtues of character in business are courage, honesty, temperance, and justice. In this scenario, courage is defined as risk-taking and willingness to take a stand for the right ideas and actions. Walmart showed courage by removing deadly weapons from store floors and transporting them to a secure location during unsettling times. It was a smart move to ensure a safe environment would be kept at Walmart, and it was a decision that had to be made quickly because protests were heating up. Walmart has been honest the whole time. They announced that weapons and ammunition was going to be moved, and the big controversy occurred when these products made a return to store floors days later. Walmart has shown justice because they have exemplified good practices and shown good ideas by moving products that could cause harm to the back. Walmart has shown that a safe environment is important to them.

Justified Ethics Evaluation:

In this case, Walmart has shown that they care a lot about the safety of their employees and customers. With civil unrest occurring all across the nation, Walmart did their best to keep their environment as safe as possible. Walmart demonstrated this by allowing workers to clock out early because it was becoming unsafe. They also made a huge decision to remove all firearms and ammunition and move them to a secure location in the back of stores. They have also listened to the public a bit about selling guns. Walmart stopped selling handguns, semi-automatic styled weapons, and ammunition. They have moved towards hunting equipment styled rifles. This is a step in the right direction but some people hope that one day guns will not be sold at all. Walmart has also been honest and straightforward with employees and customers saying that guns are a part of Walmart’s culture and will continue to be sold. Walmart has continued to bring in billions upon billions of dollars in revenue every year, and they do it within the law. Milton Friedman would be very happy with Walmart’s success.

Action Plan:

Even though Walmart only has hunting rifles displayed, many customers do not want to see any sort of gun displayed while shopping. This issue has been expressed in the petition that has been signed by Walmart employees. Going forward, Walmart should remove all guns from store floors and permanently keep them in a secure room in the back of the store. They can market their hunting rifles with big posters over the display cases, ads, and billboards so people are aware that these products are still available to be purchased. Since firearms and ammunition will continue to be sold, it is important that Walmart reassures uneasy customers that their stores are very safe for shoppers. The secured room where the guns are held should always be locked with two different master locks. Only the manager working, and whoever is working the firearms section should have the keys to this room. If a worker who has access to this highly secured room is seen letting an unauthorized figure into it, or is seen giving the keys to someone else must face severe consequences. This is a very serious matter, and no one wants a firearm ending up in the wrong hands. Walmart has bumped the age to purchase a firearm at one of their stores up to three years from 18 to 21. Walmart should also perform a complete background check on anyone purchasing their rifles. Walmart should also consider paying a private security company to send about 2 officers to all Walmart locations that are selling firearms just in case something does go wrong. Walmart does not want a repeat of the 2019 El Paso shooting, so tighter security would be a good thing. Walmart believes that firearms are a part of their history and roots, so they need employees that are excited to sell a certain product. They can not have an employee who dislikes guns to try and sell one because it wouldn’t work. The staff needs to have a sense of confidence when selling a product, so the Walmarts where guns are being sold should have employees who agree with Walmart’s decision to continue selling them.