Table of Contents
One of the Multinationals that has encountered a lot of ethical challenges with regards to its operation and association with stakeholders in the community is Walmart stores. Established in July 1962 by Rogers, the company has grown over the years to develop slightly more than 1, 600 stores around the world (May 189). Though the company’s business strategies have connections to its admirable success, critics point to numerous ethical code breaches that have offered leverage for its profitability. For instance, in 2016, it reported a net profit of $ 11 billion yet is accused of underpaying its workforce and capitalizes in exploitation. Also, there are approximately 5, 000 lawsuits filed against Walmart annually (Massengill 550). The management has been on the spot for issuing bribes towards its past employees and court officials to manipulate the decisions of the courts in its favor.
In other incidences, consumer bodies have accused the company of offering cheap products at the expense of quality, while some foodstuffs were considered harmful to their health. These and other incidences have actively brought to the limelight the company’s ethical code of conduct model and its implementation during its daily endeavors.
The major ethical issues that Walmart faces revolve around the manner in which the company treats its workforce regarding work conditions and remuneration issues. The company has been lucky to get away with illegal and unethical acts for an extended period (Buchholtz and Archie 45) Considering that it is the world’s highest employer with a staff level of over 2.4 million people across the globe, it has survived many random acts and policies (May 289). Some of the criminal incidences that it is associated with include fraud, mistreatment of its workforce, bribery, manipulation of market systems and prices since it is the controller of the market.
When it comes to manipulating the market unfairly, Walmart has been accused of setting low rates (a level that significantly hurts small dealers in the industry) that could tilt the forces of demand and supply towards its favor. As such, there is an unethical and aggressive way of acquiring monopolistic control over the market (Massengill 150). The company has been accused of inadequate compensation to its employees and withholding health care coverage. Hence, there are consistent lawsuits from its employees who accuse the company of failing to provide critical benefits.
There has been a mixed set of reactions from the critics and defenders of Walmart with regards to how it perpetrates ethical acts, as well as, the company’s response towards the various accusations. The firm has always adopted a defensive approach towards the allegations from its employees. When accused of exposing their employees to extended hours of service, its CEO stated that the company strives to pay its workers fairly. The top executive referred the media to Walmart’s Ethics & Integrity policy which clearly states the position of the company about ethical and integrity issues, including the legality on many of its actions (May 450).The CEO issued the statement in the wake of some cries from its workforce who accused the company of failing to honor its pledge of providing higher compensation for its night shift workers.
A look at Walmart’s website reveals that it has an established code of ethics that govern its acts, operations, policies, and approaches in the course of pursuing its organizational goals. Though it has applied the provisions of the model in various measures, analysts still find its performance score wanting when it comes to fulfilling its ethical codes of conduct (Massengill 194). Many legal suits have undermined the public image of the company, worst from its current and past employees.
The cases revolve around poor compensation, failure to honor pledges, lack of salary raises, employees working beyond stipulated hours and threats of dismissal, and others. Also, the company is a multi-billion enterprise that is expected to pay its employees sufficiently (by world standards) (Buchholtz and Archie 60). In this light, Walmart should improve its implementation of the code of conduct if it has plans for future expansion and sustainability. Subsequently, many fines paid by the company to settle court cases is a direct threat to its public image and future survival as it could lose considerable market share in case a new entrant with huge financial muscles enters the market.
The pursuit of ethics and integrity is critical for the long-term survival of any business. Walmart has faced various legal issues, revolving around workforce treatment, fraud, bribery, and other corporate irregularities.
- The leadership should develop its code of conducts and integrity model, including its application.
- The company should treat the workforce with respect to maintain a strong source of labor for the company.
- Buchholtz, Ann K, and Archie B. Carroll. Business and Society: Ethics, Sustainability, and Stakeholder Management. , 2014. Print.
- Massengill, Rebekah P. Wal-mart Wars: Moral Populism in the Twenty-First Century. , 2013. Print.
- May, Steve. Case Studies in Organizational Communication: Ethical Perspectives and Practices. Los Angeles: SAGE Publications, 2013. Print.