During the process of selecting a company to focus on in this paper, I found that I was torn between two areas of interest: one was based on the pharmaceutical industry, which I did not choose; the other choice was to examine a major retailer, which seems to be quite popular among the public, but also has had more than its share of ethical issues and accusations in recent years than many other major companies. Going through the potential literature to be used for this paper served to make my decision easier, given the amount of material written about the company I have ultimately decided on: Walmart. Walmart is a company that is just about as well-known for complaints against them as it is championed for its clearance sales and money saving opportunities. Walmart’s public persona seems confusing at times, which has been amply documented in the press and business literature. The goal in this paper, therefore, is to examine Walmart’s continuing ethical dilemmas in the context of the arguably favorable reputation that the company seems to enjoy across most, if not all, of the United States.
It is important to begin with a very brief synopsis of what Walmart is all about. A five- and-dime store was opened by Sam Walton in 1950 in Arkansas. By 1962, Walton’s business evolved into the first Wal-Mart store in 1962, also based in Arkansas, which has grown into what is considered ‘the world’s largest retail company’ (Farfan, 2013). Wal-Mart’s mission statement, advertised on their website is both simple and concise: ‘We save people money so they can live better.’ Founder Sam Walton expands a bit on this when describing his company’s purpose, ‘If we work together, we’ll lower the cost of living for everyone…we’ll give the world an opportunity to see what it’s like to save and have a better life’ (Farfan, 2013). Given the amount of bad press that Wal-Mart has received throughout recent years, the reality has been viewed perhaps a bit differently from that envisioned by its founder. The Wal-Mart reputation
‘has taken repeated hits in the press and, just last month, Wal-Mart’s top image shaper, Leslie Dach, has resigned after a 7-year stint with the company (Clifford, 2013).
Given that Wal-Mart has faced repeated issues of an ethical nature, it will help to provide a clear picture of how they go about handling with these matters. Essentially, what is called into question here is in determining what kind of corporate neighbor Wal-Mart is when placed in such situations. How does Wal-Mart handle its obligations to the community, to its stakeholders, and in general to the larger social environment in which it operates. It seems likely that, in light of the cloud of negative press that tends to hang over Wal-Mart, the people in charge might take a bit more effort to care about the environment in which Wal-Mart carries out its day-to-day business operations.
With respect to its major stakeholders, Wal-Mart points out that they are always attempting to evolve and adapt to the respect needs of their stakeholder groups. Different groups, not surprisingly, have different issues that are likely to require attention. Wal-Mart breaks down its key stakeholders in the following components:
Associates: In the interest of being engaged and maintaining consistent communication with its associates, Wal-Mart utilizes multiple channels, such as the company’s mywalmart.com website, an open door policy, as well as a montly associate magazine that elicits and promotes associate opinions through surveys. Wal-Mart states it also has a global policy by which, on a yearly basis according to date hired, every associate has the opportunity to have an evaluation of their performance provided to each employee.
Customers: Wal-Mart has created, among other channels, their walmartgreenroom.com website, which is their blog about sustainability issues. Surveys to assess customer satisfaction are also
‘used on a regular basis. These initiatives are in addition to the daily contact and interaction that occurs throughout their clubs, stores, and social media outlets (Wal-Mart GRR, 2013).
NGOs: Wal-Mart is engaged in a number of initiatives in an effort to expand their efforts and to target goals that might otherwise be beyond the company’s scope. In order to carry out such objectives, Wal-Mart has regularly scheduled meetings with NGOs (non-governmental organizations) during which issues such as strategy development, execution, and best practice sharing are discussed. Collaboration with NGOs has been responsible for the creation of:
GlobalSocialComplianceProgram
InternationalLaborOrganization/InternationalFinanceCorporationBetterWork
Program
Business for Social Responsibility
EthicalTradingInitiative
SustainableApparelCoalition(Wal-MartEthicalSourcingPartnerships,2012).
Shareholders: To ensure that our shareholders are consistently apprised of company activities, quarterly as well as annual financial reports are provided. Yearly shareholder meetings are held, utilization of an individualized mailing program and conference calls allow for clear and continuous communication. Included in this communication loop are investors, senior management staff, as well as rating firms and analysts. Three yearly day-long interactive strategy conferences allow for engagement with the investment community to discuss new strategies for the company.
Suppliers: With a focus on sustainability issues, Wal-Mart regularly confers with its suppliers in order to promote possible solutions. The 2012 agenda yielded a number of major projects: the Sustainability Index, Supply Chain Greenhouse Gas (GHG) program, and sustainable agriculture
‘(Wal-Mart GRR, 2013).
Although Wal-Mart seems to have made advances in bringing their stakeholders into the focus of changing aspects of the company, Wal-Mart is still confronted with challenges. Indeed, it is in the social environment area that Wal-Mart is likely to have to devote the most effort and energy in developing new strategies for doing business. Dixon asseses this situation:
Business provides many benefits to society, but also plays a major role in the decline of environmental and social conditions… As corporate impacts increase in a finite system, environmental and social problems are becoming business problems. This is especially true for a company of Wal-Mart’s size. As the largest retailer of many types of products, supply constraints driven by environmental and social problems seriously threaten Wal-Mart’s ability to prosper (Dixon, 2006).
This might actually appear to be a fatal flaw in a company’s future viability. But this is Wal-Mart we’re talking about. Dixon explains that Wal-Mart has always been quite creative in the ability to ‘think outside the box.’ He points out the revolutionary strategies Wal-Mart made use of in serving rural regions of the country. Dixon contends, ‘Now Wal-Mart is capitalizing on the sustainability opportunity. By using business power to improve environmental and social conditions, it will enhance its own prosperity’ (Dixon, 2006). Wal-Mart does not consider sustainability issues to be separate from its other strategies; indeed, Wal-Mart has actively been integrating sustainability strategies into all of its overall business planning. Moreover, Dixon provides a list of Wal-Mart’s sustainability initiatives in the social area:
Sourcing:establishindependentmonitoringofWal-Mart’sfactorycertificationprogram; separate the factory certification and buying functions; cease doing business with supplier factories that fail to meet Wal-Mart’s ethical standards; collaborate with industry, government and NGOs to improve sourcing in developing countries.
‘ Healthcare: make healthcare insurance available to all employees for $23 per month or less and their children for $15 per month; put healthcare clinics in stores for employees and customers; provide volume discounts on healthcare insurance to small businesses; collaborate with business, government and others on US healthcare reform with the goal of lowering costs by as much as 25 percent.
Wages: support an increase in the US minimum wage; continue paying market wages.
Communities:enhanceexistingcommunityengagementprocesseswiththegoalof
building mutually beneficial partnerships and better meeting community needs.
Diversity:increasethepercentageofwomenandminoritiesinmanagement;tie management compensation to achieving diversity goals; use Wal-Mart scale to assist and grow minority-owned businesses (Dixon, 2006).
Wal-Mart is arguably a prime corporation to examine, especially with respect to ethical issues, how the company has succeeded and failed, how they are viewed in the community and, despite the hits that they have taken in the media, continue to grow at an almost unprecedented pace. Many people have, and are likely to continue to question and denigrate some of Wal- Mart’s corporate philosophies and business practices. The thing that seems to hold steadfast throughout is the success that Wal-Mart has earned and continues to maintain with passing years.
Some of the previous issues that have been held against Wal-Mart include unfair and poor treatment of its employees. Many people view Wal-Mart as the Goliath type of store that puts smaller independent David-like entities out of business. Last year Wal-Mart increased the health insurance premiums for its full time workers by some 120%, while employees who are working less than 24 hours per week lost their health care benefits (Rogers, 2012). Bribery charges and unwise business decisions have put Wal-Mart’s upper management leaders under suspicion. For example, according to a number of union groups, some of Wal-Mart’s policies are negatively impacting the economy in the United States. Rogers explains, ‘According to Making Change (one of the union groups), the company’s race-to-the bottom corporate culture
‘cost the U.S. 196,000 jobs between 2001 and 2006, as it relied more and more on imports from low-wage countries like China to provide merchandise for its shelves’ (Rogers, 2012).
Clearly, as a business enterprise, Wal-Mart knows how to do certain things effectively and efficiently, thus stimulating the company’s continued growth around the world. They seem to be held in high regard for their work with NGOs and for the creation of numerous charitable and assistance programs. And their views on sustainability are likely to be held up as a role model for future improvements among other companies. What this indicates is that the company has strengths and knows how and why to do the right thing. But, despite those positives, Wal- Mart continues to carry around ‘ and even add to ‘ it ethical violations baggage. In fact, if the press releases published on the Making Change website are any indication, new problems are continuing to surface.
Since the beginning of 2013, several major press releases document the nature of the ethical issues that continue to threaten Wal-Mart’s reputation as being a socially responsible corporate neighbor. In January of 2013, worker organizations were calling an end to Wal-Mart’s part-time scheduling practices, claiming that Wal-Mart can certainly afford to provide better work schedules for their American employees. No less than 80 charges have been filed against Wal-Mart by the group OUR Wal-Mart, citing the company’s efforts to silence their own workers who were questioning their practices. February of 2013 saw situations in which workers walked of the job, and subsequently filed unfair labor practice charges against Wal-Mart.
In summary, Wal-Mart seems to be trying to do some of the right things in order to shift focus away from the things that they continue to do in less than acceptable ways. Being able to take the lead on such things as sustainability is worth a certain amount of value. But Wal-Mart seems to have bigger issues, ones that are internal in nature that warrant the attention of those in charge. It seems likely that no matter what good examples Wal-Mart attempts to put up as a means of defending their reputation, they need to acknowledge and accept the things that are somewhat foul within their upper management levels. Moreover, Wal-Mart needs to think about how they got to be as big as they are, and share some of the credit with the employees that serve as the backbone of their organization, and the force that drives the company to its levels of success. Frankly, to neglect their own workers while making considerable effort to polish their image and reputation around the world is nothing less than being ungrateful and completely out of touch with the very foundation of their business. It seems that what Wal-Mart needs to do for the time being is to engage in some self-reflection and get their own internal affairs in order. Only after this has been sufficiently resolved should they concern themselves with taking credit for their more public successes on the global stage. How good can Wal-Mart truly be if they continue to neglect their own employees who struggle with their own pressing needs and concerns on a daily basis?