Walmart: Social Responsibility Essay
“Social responsibility is the practice of producing goods and services in a way that is not harmful to society or the environment”. (Cambridge Dictionary Online, 2013) Walmart holds many accolades in the business world. It bosts over $400 billion in revenue annually. If this number were converted into GDP Walmart would have a larger economy than many countries combined and make it the 23rd largest economy in the world. Walmart and its holdings employs over 2. 1 million employees making it the largest employer in the United States.
What does this mean? It means Walmart is a bohemoth in the business world. Walmart has successfully made itself available to United States. By doing so it also placed itself on the spotlight because of many questionable, ethical or environmentally innappropriate decisions. Walmart is sued approximately every two hours and is currently involved in litigation consisting of 1. 6 million employees in the largest discrimination class action law suit with the potential cost to walmart over $11 billion. Walmart has also been found guilty of dumping hazardous waste.
July 28, 2013 walmart pled guilty to improperly disposing of pesticides, fertilizer, and hazardous materials. These types of hazardous materials were disposed of down the drain and also tossed into trash recepticals. The fine placed for violation of the clean water act among other enviormental laws was $81. 6 Million dollars. In 2010 a similar allegation was brought to light and Walmart agreed pay $27. 6 million to settle. Walmart has direct impact on society’s health. Each additional Walmart added per 100,000 people increases the local obesity rate by 2. 4%.(Business Insider, 2013).
These facts, both good and bad, are a reflection of a combination of decisions and oversights from executives at Walmart. For any business to survive it is imperative to establish a social responsibility strategy that keeps Environment, People, Profit, and the law in mind. Companies, regardless of size are expected to follow guidelines and laws when it comes to the environment. There are several entities that enforce a set standard of waste disposal and are in charge of controlling pollution. One way to control polution is through the application of fines.
The 1980 Comprehensive Environmental Response Compensation and Liability Act (CERCLA/Superfund Act) fines companies for both the pollution and for restoration costs. These fines can still be imposed even if at the time the method of disposal was legal. There are strict laws and legislation in place that can impose large fines if a company pollutes. Companies that pollute can also loose value in the stock market, can suffer from boycotts, and lawsuits. These seperately or together can topple of company which illustrates the importance of trying to run an environmentally “clean” and “green” business.
This helps save money and keeps you looking good. The United States Environmental Protection Agency (EPA) is tasked to protect human health and the environment. The EPAs definition of corporate social liability is “an obligation to make a futuer expenditure due to past or ongoing manufacturing or other ocmmercial activity, which adversely affects any aspect of the environment, the economy, or society (Heal, 2008). The EPA annually releases a report named the Toxics Release Inventory (TRI) which details the levels of pollution released by companies.
The companies high up on the TRI loose value in their stock almost immediately after the list is released each fall. This proves that pollution hurts the company (Weber & Lawrence, 2011). Ecological Sustainable Organization The purpose of of making the organization ecologically sustainable is to implement strategies that can combine long term profits and the protection of the ecosystem. This is intelligent because the sources of waste can be reduced and or sold off to other companies. The reasons for doing this is the company can conserve energy, conserve resources, reduce pollution, reduce waste, and generate revenue.
Environmentally CSR Strategies Walmart or would benefit from the introduction of green solutions, by reducing overhead costs related to travel and commute, cutting communication costs with out reducing value, by being ahead of laws and regulations and by taking advantage of technology to increase revenue, drive up productivity, while driving waste and pollution down. Introduce teleconfrencing to executives. Teleconfrencing is the act of carrying out meetings/ confrences with several other individuals in different locations via telecommunication equipment (Heimbuch, 2010).
A business with $1 billion or more in annual revenue implementing four teleconference rooms could: Achieve a financial return on investment in as little as 15 months; Save nearly 900 business trips in the first year of using teleconference; and Reduce emissions by 2,271 metric tons over five years–the greenhouse gas equivalent of removing 434 passenger vehicles from the road for one year (Heimbuch, 2010). Walrmart averaging over $400 million in revenue annually would have 400 times the impact environmentally if this model was followed.
908,400 metric tons of emmissions over five years would be removed which would be the equivalent of removing approximately 73,600 cars from the road. An impact this great would make news headlines and label Walmart as a true environmental ally. Reducing communications costs such as costs related to email usage and telephone usage are an important part of lean principles. Many of these services can be unified and run over to Voice Over Internet Protocol or VOIP. VOIP allows for phone service,email, and chat services to run cheap or free on the company’s own internal internet.
Take advantage of technology to reduce waste/costs, drive up productivity, and increase revenue. Hire an IT consultant which can determine which solutions can fix problems while keeping Walmart green. For example, replace older equipment with newer more energy efficient. This will bring products into Walmart that costs less to run annually and have a lower impact on the environment. This better cooling systems for the server would allow the system to run smoother and reduce the cooling bill for the overall building.
Keeping our computers up to speed and cooled will allow for faster performance and that leads to faster responses to your customers needs. The It consultant can also ensure that all the devices are being run in an energy efficient mode which will save electrical bills. These all add up to unnessary costs that can be fixed with some modern technological intervention. Another method of getting green with the use of technology is by using reclyclable printer cartridges. By using recyclable ink catridges walmart reduces better cooling systems for the server.
It takes approximatley 1,000 years for an ink cartridge to decompose . It takes around three pounds of raw material to create a new ink cartridge. Some of the raw material used to produce an ink cartridge includes about 3. 5 ounces of oil. By recycling ink cartridges and purchasing recycled cartridges Walmart saves money and saves the landfill from having walmart’s ink cartridges thrown away there. Recycling the cartrides is very easily done because many of the ink cartridge companies have their own recycling program and will take the cartridges back for free with included postage.
Ethcial Leadership Considerations and Recommendations When ethical leadership is considered what comes to mind is “How was this profit made? Was this profit made at the expense of: exploitation, curruption, armed conflict, child-labor or any other events that socially impact the well being of others. Popular opinion can drive profits to the sky or towards the ground, it is important that ethical decisions are made in order to preserve the brand name and profits while keeping people happy. Policies and procedures must be implented to foster ethical behavior.
There must be reporting mechanisms that encourage people who see violations to report it. There must be Audits of all business areas to ensure compliance is met through out. By setting a Corporate Culture that rewards and fosters ethical behavior, the company can decrease its chances of inpropriatey. Education in both the company’s ethical values and the employees training should let him or her know that Walmart is out to do good and wants to do good. This fosters ethical behavior and practices.
When considering business and sustainability one must also consider the concept of triple bottom line accounting. Triple Bottom line Accounting is an accounting concept that contains three measurable performance elements social, environmental, and financial. This model is often referred to as the “Three Ps” or “People, Planet, Profits” (Slaper & Hall, 2010). There are different ways to measure these elements because there is no universal standard. Considerations for the environment could be solid waste management, fossil fuel consumption, or change in land use or cover.
The cost of destroying, creating or maintaining the local eco system in which the business operates has an impact monetarily for the company and has an impact on the company’s public opinion. Measurements as far as people are concerned could be measurements that evaluates people’s health and well being. These could include unemployment rate, median household income, relative poverty, Average commute time, Average of hours training employees, charitable contributions and Career retention.
The measurement of “people” in accounting reflects the quality of the workforce internally, sustainability of the workforce in comparison to other companies, and even the happiness of employees or customers. This can impact sales in many ways. For example, undertrained or unhappy employees will perform poorly leaving poor customer satisfaction which drives customers away. Poor performance or lack of employee satisfaction with work can in turn lead to unethical decisions being made in the work place, such as inproperly removing waste or stealing.
All in all all three dimensions of Triple Bottom Line Accounting can impact both company performance and the outside perception of the company. Underpaying employees or treating them poorly can lead to unethical decisions being taken on their part. It is imperative to take these three dimensions into account and frequently audit and improve upon the system. To ensure that the financial documents and records are proper it is the law, that the records must be audited.
Auditing frequently and preferably by third party is the best way to make sure there is not a misrepresentation of number going or that unethical behavior is not present in the accounting department. All certified public accountants (CPAs) must adhere to the American Institute of Certified Public Accountants (AICPA) in order to maintain ethical standards of practice. Having an ethicist on staff auditing the work and implementing quarterly ethics training can bolster the integritiy of the Company (Code of Professional Conduct, 2013).