Wal-Mart Stores Inc. Essay

essay B
  • Words: 3531
  • Category: Business

  • Pages: 13

Get Full Essay

Get access to this section to get all the help you need with your essay and educational goals.

Get Access

Wal-Mart Stores Inc. ( Wal-Mart ) is one of the world’s largest retail merchants with ironss of price reduction section shops across legion states worldwide. Wal-Mart has been extremely regarded as the 3rd largest public corporation and employs about 200. 000 employees. which has cemented Wal-Mart’s position as the largest private employer in the universe. With 8. 500 shops in 15 different states Wal-Mart has been able to turn well and go one of the most valuable companies in recent history.

Importance of Ethical motives at Wal-Mart

Now that the presence and importance of Wal-Mart has been established. it is so of import to measure Wal-Mart from an ethical point of view sing their determinations can hold a important impact on so many different stakeholders. Some of the most of import stakeholders involve ; employees. clients. and providers. These stakeholders are straight impacted by Wal-Mart’s determinations on an mundane footing ; nevertheless. there are so many more that can be affected. For illustration. it is known that set uping a Wal-Mart shop in a underdeveloped state can supply a important encouragement in that country’s economic system in respects to supplying employment and resources to the local people. Therefore. it is appropriate for Wal-Mart executives to broaden their range when doing determinations to account for locals in the development states in which they operate every bit good as authorities functionaries. Since Wal-Marts operations has such a strong clasp on so many different parties it is of import to observe that any determination made in an ethical context can hold a sedate impact both on both societal and economic system facets of society.

Wal-Mart prides itself on being a family-owned concern which traces all the manner back to the laminitis Sam Walton who established the concern in 1962 and whose household still owns a 48 % portion in Wal-Mart. Since the Walton household has been involved with Wal-Mart for such a long period. it can be assumed that there has been a strong ethical background in the company steering daily concern operations in order to guarantee that the concern is runing in conformity with both jurisprudence and directions ethical desires. This background has been sufficient in prolonging a strong corporate civilization and proper ethical behavior for so many old ages.

However. as the concern continues to turn and integrate different front mans and expand into different states it can be assumed that some grade of discrepancy in respects to ethical criterions will be. Therefore. it is of import to understand that this strong ethical background that has been present for so many old ages. will doubtless confront obstructions and consequence in ethical issues that go against it. As these quandaries come up it is one time once more indispensable that they are measured against Wal-Marts original Statement of Ethics to find whether or non it is genuinely desirable behavior.

Wal-Mart’s Statement of Ethical motives

Before analysing the recent ethical issue sing Wal-Mart’s decision-making it is first of import to acquire a clear apprehension of Wal-Mart’s Statement of Ethics. By analysing the ends and aims set out by Wal-Mart’s upper direction it will be clear what their purposes were and whether or non their actions were a true misdemeanor of their corporate ethical responsibility. In add-on. because Wal-Mart operates on such a planetary graduated table and since the ethical issue that will be discussed subsequently involves a subordinate in a state outside of North America. it is of import to pay close attending to Wal-Marts policies sing operations in international states.

The elements of Wal-Mart’s Statement of Ethics remainder upon three basic beliefs: regard for the person. service to clients and endeavoring for excellence. Although these are really wide. Wal-Mart establishes this rather early on in order for it to move as a anchor for the statement and to scratch these beliefs in the users heads when doing ethical determinations. This Statement of Ethical motives besides outlines Steering Principles alongside the three basic beliefs to supply farther counsel to assist their associates make the right determinations and to move with unity. These beliefs and moral rules will be dissected subsequently on in the paper when being compared to specific elements of the ethical quandary at manus.

In add-on to sketching the expected ethical behaviour of Wal-Mart’s ain employees. they besides outline the demand for any 3rd parties to run by the same moral criterions with a repute for unity. Wal-Mart makes it clear that this will be a strong standard for which they select providers. contractors and other service suppliers covering with Wal-Mart. One extra thing to maintain in head before diging into the ethical quandary that Wal-Mart faces. is that for counsel on any issues in a foreign subordinate. Wal-Mart advises that associates contact the in-country General Counsel for counsel. One country of concern with this. is that some country’s general counsel’s may non run with the same ethical criterions that Wal-Mart does which may motivate farther probe in order to guarantee that they are genuinely enduring by Wal-Mart’s base ethical behavior.

Ethical Issue

The event that sparked this ethical issue occurred in September of 2005 when a senior attorney at Wal-Mart received an electronic mail from a former executive at Wal-Mart de Mexcio. which is Wal-mart’s largest foreign subordinate. The electronic mail gave notice to the allegations that executives at Wal-mart de Mexico took portion in a series of payoffs while spread outing their operations throughout Mexico in order to obtain licenses and basically crush out their rivals. Their ability to have these licenses. which was virtually illegal. allowed Wal-Mart de Mexico to spread out at a rapid rate and basically go Mexico’s largest retail merchant.

Specifically. these payoffs were targeted at city managers and metropolis council members every bit good as urban contrivers and amounted to about $ 24 million. These payoffs allowed Wal-Mart de Mexico to procure districting blessings and besides cut down environmental impact fees. two mechanisms that doubtless played a function in Wal-Mart’s aggressive growing in Mexico. To set the magnitude of their growing into some position. about one in every five Wal-Mart shops is located in Mexico which can decidedly be attributed to the graft run that was happening during this period of growing.

As mentioned earlier. this issue surfaced through an electronic mail that was sent by a former Wal-Mart de Mexico executive. Sergio Cicero Zapata. who worked for Wal-Mart de Mexico for about a decennary until 2004. In these electronic mails. it indicated that Wal-Mart de Mexico’s main executive at the clip. Eduardo Castro-Wright. non merely went undisciplined but was really promoted to frailty president of Wal-Mart in 2008. This move represented the general attitude that was taken towards this graft dirt while it was traveling on. It was noted that Wal-Mart de Mexico’s upper direction were to the full cognizant of the payments being made but chose to hide it from Wal-Mart’s central office in the U. S. When the issue was brought to the attending of Wal-Mart’s top executives. they decided to halt the probe as opposed to spread outing it.

As Wal-Mart was being praised for their committedness to the highest moral criterions. they were later hiding a monolithic graft dirt and declining to train anyone involved. As opposed to covering with the issue at the company’s central office and doing it a top precedence they sent the investigational responsibilities to the general advocate of Wal-Mart de Mexico. This was no happenstance as this general advocate was the same general advocate that authorized the payoff. As a consequence. the general advocate instantly absolved Wal-Mart de Mexico’s top executives. This irresponsible or negligent behaviour in respects to the probe represented Wal-mart’s dreamy attack to guaranting that their ethical criterions outlined in their Statement of Ethical motives was being satisfied.

Alternatively of doing certain the right thing was done. Wal-Mart was focused on restricting the harm and maintaining their imperativeness coverage and stock monetary value at respectable degrees. At the clip. this event gave manner to two big ethical quandary none of which were dealt with by top executives at Wal-Mart and alternatively were revealed through the imperativeness. The first 1 was whether or non these actions were a true misdemeanor of Wal-Marts ethical policies. This would assist find how to properly manage the issue in the eyes of the populace and possible effects for any associates involved.

Another possible ethical issue. was to happen out whether any of Wal-Mart’s executives were cognizant of this graft dirt while it was traveling on and whether or non it was concealed. Once this was determined. Wal-Mart would so be able to concentrate their attending on repairing the job. The are faced with a big quandary of hiding this graft dirt and go oning operations as usual or they can carry through their true ethical responsibility and uncover this dirt to the populace. which may present sedate effects on both Wal-Marts gross revenues and their trade name image. This determination must be carefully analyzed in order to accomplish an optimum balance of happening who’s ethically accountable and guaranting that Wal-Marts repute is non ruined.

Analysis of Ethical Issue

The actions taken by Wal-Mart’s top executives were doubtless a show of unwanted ethical behaviour. This unethical behaviour could be traced back to five different groups. Each of these groups are responsible in some ways or another for orchestrating this dirt and should all earnestly consider seting their moral compasses to guarantee that this does non go on once more. These five parties include:

* Associates at Wal-Mart de Mexico
* Upper Management at Wal-Mart de Mexico
* Top Executives at Wal-Mart central office
* Former Executive Sergio Cicero Zapata
* Third parties



The Guiding Principles. outlined early on in Wal-Mart’s Statement of Ethics illustrates merely how damaging this graft dirt was. compared to Wal-Mart’s desirable ethical behavior. These Steering Principles served as the nucleus values that Wal-Mart associates should establish their behaviour on. The fact that these rules were clearly violated is a cardinal index that this codification of moralss is non being enforced decently if it is being enforced at all. The Steering Principles that are most applicable to this ethical issue are the undermentioned:

* Follow the jurisprudence at all times
* Be honest and just
* Reveal and describe all information truthfully. without use or deceit
* Promptly study suspected misdemeanors of the Statement of Ethical motives


It is slightly equivocal when measuring whether or non the associates at Wal-Mart de Mexico were really go againsting their Statement of Ethical motives. This is because throughout the statement. whenever there is a inquiry sing moralss in a foreign state. the statement ever advises an associate to confer with with their in-country’s general advocate. This comes up several times throughout the statement and is really applicable in Wal-Mart’s instance because of their planetary prominence. In the instance of Wal-Mart de Mexico. the general advocate was corrupt and the associates may hold been incognizant of what was traveling on. If they were cognizant of what was traveling on. the associates were in clear misdemeanor of the rule the requires an single to quickly describe suspected misdemeanors of the statement. This is an issue that must be addressed in the Statement of Ethics because of the fact that Wal-Mart has so many subordinates in so many different states.

Merely reding to confer with with the in-country general advocate is non specific plenty and will frequently take to state of affairss like this. This is because it can be assumed that general ethical criterions in other states are immensely different from the ethical criterions in the U. S. where the central office of Wal-Mart are located. To avoid this from go oning once more. Wal-Mart should be less obscure and indicate specific ethical criterions to follow in respects to operations in foreign states. From the point of view of Wal-Mart de Mexico’s top direction. they clearly demonstrated unwanted behaviour based on the rules outlined in the statement. Not merely did they fail to move with unity and honestness they besides failed to follow the Torahs. By corrupting city’s general advocate to obtain licenses and cut down environmental fees it is clearly utilizing tactics that are illegal and unethical. This is clearly unjust because these executives are paying off these 3rd parties in order to acquire an advantage in shop and warehouse location.

By developing a relationship with these 3rd parties it besides creates a struggle of involvement where certain associates will give moral rules in their ain best involvements. The consequences of the graft dirt allowed Wal-Mart de Mexico to acquire significantly more exposure and be able to cut costs. which perfectly gives them the upper manus against competition. The ground behind this unethical behaviour is a consequence of a struggle of involvement that encompasses both fulfilling these 3rd parties and besides the general desire to accomplish a higher portion monetary value and positive imperativeness coverage. Harmonizing to The Times article. these top executives were non punished for their actions and in some instances they were even promoted. This ethical issue so expands to Wal-Mart’s top executives who chose to hide this issue.

If the people responsible for this graft run are non held accountable and disciplined so Wal-Mart will neglect to put a case in point and issues like this will go on to happen. Wal-Mart’s top executives at their central offices in Bentonville. Arkansas were besides exposing unwanted ethical behaviour. It would be expected that top direction in any company are most in melody with their company’s ethical policies. nevertheless. they were clearly showing behaviour that contradicted their ain Statement of Ethical motives. The fact that even the top executives at Wal-Mart were in on this dirt indicates the badness of the issue. In this illustration. the top executives at Wal-Mart knew about this issue long before it surfaced publically. This indicates that even the top executives violated the rule of uncovering and describing all information truthfully which later violated the federal jurisprudence. Wal-Mart failed to describe the narrative in order to salve their repute of being a company with strong moral criterions and to restrict the harm on their stock monetary value.

In add-on. the rapid growing of Wal-Mart de Mexico was a bright topographic point in the company and was to function as an illustration of perfect growing for future subordinates. If Wal-Mart did a proper probe and this narrative was made public all of this would be ruined. Alternatively. Wal-Mart’s leaders halted the internal probe and put the general advocate of Wal-Mart de Mexico in charge. which was the advocate responsible for carry oning the graft in the first topographic point. In add-on to this. the executives besides failed to train any of the persons responsible for this. In order to guarantee that this does non go on once more. Wal-Mart should set some serious consideration into some internal testing whereby all of the associates are tested to guarantee their moral compass is absolutely aligned with that of the company’s. It may even be questioned that the former executive of Wal-Mart de Mexico is genuinely ethical in this sense.

Asides from really taking portion in the graft dirt it can be believed that the actions of describing this unethical behaviour is unethical in itself. Although his actions revealed the graft dirt and seemed like a genuinely moral action. it can besides be argued that he reported this to cover his ain trail. Possibly he knew that it would be a affair of clip before this dirt was revealed and he merely wanted to guarantee positive imperativeness coverage and good relationships with Wal-Mart’s top executives. This brings up a struggle of involvement and is hard to observe. but could be valid concluding for his behaviour. With that being said. his whistle blowing technique did uncover a monolithic blip on Wal-Mart’s ethical radio detection and ranging and could forestall many issues like this from happening in the hereafter. In Wal-Mart’s Statement of Ethics it clearly states an outlook of Third party affiliates of Wal-Mart from an ethical point of view. This indicates that any contractor. provider or other service supplier must move with a strong moral compass and with unity. The class of Third parties besides extends to political associates which is much more relevant in this instance as Wal-Mart de Mexico was organizing their payoffs chiefly with metropolis councils and city managers.

This indicates that the choice procedure for any provider must affect an ethical cheque to guarantee that they are staying by similar ethical criterions. In this instance. Wal-Mart clearly violated this demand by tie ining themselves with unethical Third parties that are willing to accept payoffs. Although. it is ill-defined in the article as to which party initiated the payoff. the act of taking portion in a payoff itself is unethical and should be condemned. It is clear that Wal-Mart does non hold an appropriate procedure for choosing Third parties. nevertheless. they may hold to first set their ain Statement of Ethical motives before tie ining themselves with any Third party in the hereafter. This would be to guarantee that the Third party’s ethical criterions are in line with ‘proper’ ethical criterions and non the 1s antecedently laid out by Wal-Mart taking to this graft dirt.

Ethical Theories

Under the belief of utilitarianism and more specifically. ‘Rule Utilitarianism’ . it is a common apprehension that the rightness of an action can be determined by whether or non it provides the greatest good for the greatest sum of people. At first glimpse. it appears that the orchestrators of this graft dirt followed a useful attack when supporting this graft run from an ethical point of view. This is because ; the consequences coming from the payoffs genuinely did profit the greatest sum of people. The stakeholders who benefited from these actions were the consumers who were passed on the low monetary values because of Wal-Mart ability to accomplish cost efficiency through the acquisition of these licenses.

In add-on. a batch of stockholders benefited from this dirt because the stock monetary value increased dramatically following Wal-Mart de Mexico’s successful enlargement. Therefore. under a useful belief. even though a few of Wal-Mart’s rivals suffered from this. the bulk of consumers and stockholders benefited ensuing in the greatest sum of good for the greatest sum of people. Deontological moralss does non co-occur with this graft dirt even though the effects ( benefits ) of the action benefit everyone. Kant would still oppugn the motivations behind those actions and province that Wal-Mart’s illegal actions failed to carry through their responsibility to follow the Torahs implied by society.

Through the ‘Theory of Justice’ outlined by John Rawls. we can see that Wal-Mart’s actions failed to carry through the chief two rules. This is because Wal-Mart created a state of affairs where equal rights were non available to everyone involved because of the fact that Wal-Mart illicitly obtained the licenses through graft. In add-on. Wal-Mart’s actions did non ensue in a state of affairs that resulted in everyone’s advantage because their rivals were left buttocks in the race to procure market presence in Mexico. Therefore. the rules outlined in the ‘Theory of Justice’ were non considered during the class of this graft dirt.

Personal Learning

One of the chief key larning points that I took from this concern instance was the importance of carry throughing one’s personal moral responsibility. In the instance of Wal-Mart de Mexico’s graft dirt. there is a good possibility that many other companies were involved in other signifiers of graft to acquire in front of the competition. Although this may be considered a ‘norm’ in certain countries of the universe and really might be a needed action to take to remain competitory in the market. concern leaders must still be aware of the Torahs and basic moralss that should regulate just and equal competition. That means. regardless of any damaging effects on a portion monetary value and net income by non rip offing the system. a company should ever maintain their moral compass in the head as the effects will finally come back to them as was seen in this instance. At the terminal of the twenty-four hours. I believe the celebrated quotation mark by Henry Kravis puts it absolutely. “You can hold all the money in the universe. but if you are non a moral and ethical individual. you truly have nil. ”

Plants Cited
Barstow. David. “Vast Mexico Bribery Case Hushed Up by Wal-Mart After Top-Level Struggle. ” The New York Times. The New York Times. 22 Apr. 2012. Web. 23 Nov. 2012.
& lt ; hypertext transfer protocol: //www. nytimes. com/2012/04/22/business/at-wal-mart-in-mexico-a-bribe- inquiry-silenced. hypertext markup language? pagewanted=all & gt ; .

“Fortune 500 2007: Full List 1-100. ” CNNMoney. Cable News Network. n. d. Web. 23 Nov. 2012. & lt ; hypertext transfer protocol: //money. cnn. com/magazines/fortune/fortune500/2007/full_list/index. hypertext markup language & gt ; . “Walmart Statement of Ethics” . Walmart. Web. 25 Oct 2012. hypertext transfer protocol: //ethics. walmartstores. com/

“Walton Family Ownership Reaches 48. 2 % Level | RetailingToday. com. ” Walton Family Ownership Reaches 48. 2 % Level | RetailingToday. com. N. p. . n. d. Web. 23 Nov. 2012. & lt ; hypertext transfer protocol: //www. retailingtoday. com/article/walton-family-ownership-reaches-482-level & gt ; .

Get instant access to
all materials

Become a Member
unlock