Walmart: "Worst company in the world"

[Francesca R]

The purpose of insurance is not to enrich anybody. The point of it is to restore you to where you were or would have been had something bad not happened. Hence, medical insurance will pay for your cancer treatment, but it will not pay for your cancer treatment and your plastic surgery and your liposuction so that you may appear as a supermodel. If your house burns down insurance will pay you what it was worth, not buy you a mansion next to Barbra Streisand's. You are not supposed to wind up better off than you were before.

Most of your point it correct, but I would disagree with that first line. The purpose of insurance is to enrich, or else it could not voluntarily arise.

The insured is better off paying to sell their risk. The insurer is better off being paid to buy it. It is a simple gain from trade

[Cannot access youtube NWS, so cannot comment on the rest of this]

 

[Francesca R]

Jeez dude, get with the program. TOP, T - O - P. Heeloooooo......

Ok, I don't know what the hell that is either.

The Other Place? Skepticalcommunity?

 

[Francesca R]

But the point is that kicking a disabled Woman and her Family [who also lost a son fighting in Iraq] is more than just disgusting for a company that earns Billions in profits.

In general, do you prefer trial by media over settlement by court action? If so, be careful what you wish for.

 

[Smackety]

Walmart has the same morals as any publicly traded company - that of their shareholders.

 

[Francesca R]

Walmart has the same morals as any publicly traded company - that of their shareholders.

A company doesn't have any morals. It matters not what the morals of the shareholders are--the company's arcticles of association compel it to increase their wealth, nothing more.

 

[Smackety]

A company doesn't have any morals. It matters not what the morals of the shareholders are--the company's arcticles of association compel it to increase their wealth, nothing more.

No. Shareholders decide what the company is going to do, it is not always about increasing wealth. Shareholders usually are concerned about the stock price, but again, not always - the board of directors can act on their morals, though it is rare. The board of directors of Walmart could have decided not to sue this woman...

 

[Francesca R]

No. Shareholders decide what the company is going to do, it is not always about increasing wealth.

That's possible, but do you have an example? I strongly doubt that Wal-Mart is such an example.

The board of directors of Walmart could have decided not to sue this woman...

Only if that decision was what they believed would be best for the business. And of course--it might have been, if the negative publicity rebounds in such a way as to damage Wal-Mart's earnings.

 

[Smackety]

That's possible, but do you have an example? I strongly doubt that Wal-Mart is such an example.

Only if that decision was what they believed would be best for the business. And of course--it might have been, if the negative publicity rebounds in such a way as to damage Wal-Mart's earnings.

This lawsuit is an example. I agree that profit is always the central motive, but that some things, such as public goodwill, are not easily expressed in terms of dollars. A speculative decision is open to influence via morality.

 

[Francesca R]

I agree that profit is always the central motive, but that some things, such as public goodwill, are not easily expressed in terms of dollars.

Agreed it's not easy, but I think that's what company executives do, implicitly or explicitly.

A speculative decision is open to influence via morality.

Having had some experience of this (legal proceedings against my employer) I can testify that the overwhelming focus of such decisions is what will be best for the external perception of the firm's reputation. This is perhaps morality, but it's "what other people will think" rather than "what I (as an executive officer) think".

 

[Smackety]

In this case, why would Walmart risk the bad publicity over a couple hundred thousand dollars?
How long does it take to earn $400,000 stocking shelves at Walmart?
Did the woman have long term disability insurance?
How did lawyers fees amount to $600,000 of a $1 Million dollar settlement?
Why did they have to pay the legal fees out of the settlement money?
Why does the woman have to live in nursing home?
If half of the $400,000 was spent in the last 3 years, was it spent on care at the nursing home?
It is really hard to draw conclusions with so little information about the actual situation.

 

[Jaggy Bunnet]

A company doesn't have any morals. It matters not what the morals of the shareholders are--the company's arcticles of association compel it to increase their wealth, nothing more.

Maybe, but often the "moral" thing to do is also the profitable thing to do - taking a long term view.

For example, this report on Walmart:

http://www.nationalpost.com/opinion...=b65bd77e-511f-4e00-88a7-a53a2a5ea4ca&k=68939

paints a different picture to what an "increase the wealth" at all costs view would suggest.

 

[BPSCG]

In this case, why would Walmart risk the bad publicity over a couple hundred thousand dollars?

From an August, 2001 USA Today article:

Wal-Mart is a legend in American business, a 39-year-old retail dynamo that trails only ExxonMobil in annual revenue. But in America's courtrooms, Wal-Mart has another distinction: As the company's sales have soared, analysts say, it appears to have become the nation's most popular private-sector target for lawsuits.
By its own count, Wal-Mart was sued 4,851 times last year — or nearly once every two hours, every day of the year. Juries decide a case in which Wal-Mart is a defendant about six times every business day, usually in favor of the Bentonville, Ark., retail giant. Wal-Mart lawyers list about 9,400 open cases.

Wal-Mart, which promotes itself as a down-home friendly business, is helping change the nature of corporate litigation by aggressively fighting many cases even when it would be cheaper for the company to settle, analysts say.
The policy runs counter to the strategy of "settle quickly and cut your losses" that companies have used for generations. But it is paying dividends for Wal-Mart, which in the past five years has seen the pace of its lawsuits stabilize as potential plaintiffs and their lawyers opt not to sue after weighing the costs of fighting the retailer.

 

[tkingdoll]

But the point is that kicking a disabled Woman and her Family [who also lost a son fighting in Iraq] is more than just disgusting for a company that earns Billions in profits.

So would you find it less disgusting if she was disabled but hadn't lost a son fighting in Iraq? What if she'd lost a son in Iraq but wasn't disabled? Or, if she was disabled, and her son had been wounded rather than killed? What if she was disabled, her son nearly went to Iraq, but didn't, and is fine? What if she hadn't got a son, but her dog got hit by a truck? What if she wasn't disabled, but was pretty depressed, and her son wanted a sex change which was causing her a lot of stress?

And so on. My point being, it's easy to make subjective condemnations about what is or isn't moral, but not so easy to draw a line. The practical thing for Walmart is to draw no line.

 

[Daylight]

I pay my insurance company every month. If I’m ever late I get threatening letters from the insurance company to pay up. So I get hurt and qualify to be paid by my insurance company because I was paying for their service. The insurance company pays off. That is the end of the transaction. I paid for a service, they provided a service. We are done, bye see you.

I’m surprised the Libertarians are not up in arms over this intrusion into a citizen’s privacy or do they only care about government intrusions? It’s none of the insurance companies business what happens after they pay off unless some fraud occurred.

So if they can take back any settlement a person may receive, why do you have to pay every month? They got paid twice for this plus they get to intrude on your privacy, which could then be used against you in the future.

So in the future we'll pay for a policy every month, get paid if we need it, and then have to pay the insurance company back. What a great system if your an insurance company (no risk insurance)!

Are they going to at least refund what she paid for the policy since they never provided her any insurance?

 

[Francesca R]

Maybe, but often the "moral" thing to do is also the profitable thing to do - taking a long term view.

I agree. Sometimes it may sound as though I don't, but I do.

For example, this report on Walmart:

http://www.nationalpost.com/opinion...=b65bd77e-511f-4e00-88a7-a53a2a5ea4ca&k=68939

paints a different picture to what an "increase the wealth" at all costs view would suggest.

Clearly, net wealth (which is what matters) cannot be separated from "all costs".

 

[Francesca R]

In this case, why would Walmart risk the bad publicity over a couple hundred thousand dollars?

My guess would be that: there are a lot of cases that are a bit similar to this one that a company that size faces, most of them you never hear about, many of them could blow up adversely against the company but the probability is low, so the expected value of the company backing down over any one case is actually negative.

And when it proves to have been positive ex post, then expensive damage limitation is required. That will be happening now, but it probably does not happen much relative to the potential incidences.

 

[JoeEllison]

This just proves that free market capitalists are sociopathic, amoral scumbags, who hide behind the "market" to cover their personality deficiencies... something we already knew. Next case?

 

[uruk]

As I understand it, the insurance company is only entitled to what they spent on her medical expenses for the accident. Did she incur $470,000 in medical charges due to the accident?
With todays healthcare costs, running up a $470,000 in medical bills is not farfetched.

Also is the money she was awarded from the settlement to recover medical costs or is it to cover lost income due to her crippling injuries?

If she is unable to work, she will be on disablility for the rest of her life. That's about $600 to $1200 a month, not counting medicare and medicaid to treat her ongoing medical expenses.
But she may have some difficulty with or limits on her social security because the records will show that she won money in a settlement.

I have to agree. Wal-mart could have done the "right" thing and let it go. Free publicity and an oppurtunity to shake off the bad reputation they have been developing (Wether the bad reputation is deserved or not is neither here nor there) would have outweighed the money they paid in health insurance.

An incident that happened a while back kind of serves as an example. One of our technicians and his brother died in a car accident on New Years. The health care plan we had didin't cover funeral expenses and the funeral home would'nt take the bodies untill they had $2,000 dollars up front. Unfortunatly the family didn't have that kind of money.

Our department took up donations to try and help out his family. The CEO found out about the situation and the company ponied up the money to cover the funeral expenses for both brothers.

The local media went gaga over the charity and the company got alot of free press and a positive reputation from the community.

We also changed insurance carriers.

 

[uruk]

From an August, 2001 USA Today article:

The difference in this case is that Wal-mart sued the woman not the other way around.

You don't look like a bad guy when you are a huge corporation getting sued by a crippled woman.

You look like a bad guy when you are huge corporation suing a crippled woman.

 

[Beerina]

$1,000,000 - $417,000 = $583,000 for her lawyers.

Now how could that be? It looks like it was not a contingency case, in which case they'd have gotten 1/3.