Analysis of Ethical Issues Faced by Wal Mart Company

Walmart is a global company that many people are familiar with. Walmart has been known to have many ethical issues in the past. The mission statement that was created was to help people save money and live better. With these many controversies, Walmart has been trying to restore its image focusing on diversity, charitable giving, and support for nutrition, and sustainability. Walmart had been accused of bribery in Mexico in which created significant ethics and compliance challenges. Walmart’s goal is to once and for all become socially responsible as a retailer.

Walmart’s Ethics and Social Responsibility

Walmart started out not having a formal ethics program in place. Mr. Walton had always relied on his own personal ethics, and he believed that it would not affect anything without the ethics program. Walmart started implementing the Sustainability Index which was used so that they could assess and share information about their products, also it was used as a model for the United States private brands. Walmart also uses this to apply new evaluative criteria for key sourcing merchants to encourage sustainability to become more of an important consideration in buyers’ daily job. The Sustainability index showed rates products and suppliers on various issues like sourcing, chemicals, and more. Walmart took the initiative to have products made in America. Walmart increased US purchased good by $50 million in only 10 years.

It has been said that Walmart does not take care of their employees. It has been said that Walmart has failed to provide health insurance for more than 60 percent of its employees. With these rumors, Mr. Walton took things into his own hands. Walmart began to improve employee relations. Not only did they increase pay tied to their performances, but they increased minimum wage. Walmart also created better health benefits, but one factor that was a down fall is that fewer employees are and were eligible. To be eligible for their insurance you had to work more than 30 hours a week or you weren’t eligible.

While Walmart was expanding, they decreased their workforce by 1.4 percent and increased their retail stores by 13 percent. With Walmart not having enough employees to fit their customers’ needs, it was harder for them to have the best customer service and implement the 10-foot rule. Walmart had an increase of lawsuits against them for denying meal breaks to employees, in which they had to pay out $172 million to more than 100,000 employees in California. Walmart has struggled with ethical leadership issues over the years. Hillary Clinton was one of the leaders that served on Walmart board before her husband’s presidency. Thomas Coughlin was forced to resign from his position because he stole around $500,000. Walmart did recover from this horrific situation by hiring CEO Lee Scott from 2000-2009, until it suffered another serious blow in 2012. Since these incidents have occurred, Walmart invested a large amount of time to implement a renewed commitment toward ensuring the company adheres to ethics and compliance standards.

Ethical Issues Walmart has Faced

Walmart had incurred many different scandals throughout the years. Walmart had many wire frauds, and tax evasion charges throughout the years. Even with dealing with these they are still the most valuable retail brand in the world. As the years go by, Walmart’s brand is continuing to lose their value. When a supplier cannot sell Walmart a product for the right price, Walmart will stop carrying that item and find another supplier. Walmart has responded to stakeholders by offshoring their products. Walmart finds it cheaper when they have their products made from outside of the United States.

Corporate governance establishes fundamental systems and processes for preventing and detecting misconduct, for investigating and disciplining, and for recovery and continuous improvement. Walmart needs to apply an effective corporate governance, with this it creates a compliance and ethics culture, so employees feel integrity is at the core or competitiveness.

What are Walmart’s contributions to improving the well-being of consumers and the economic sustainability of society? Walmart is trying to contribute in different ways to improving the well-being of consumers and the economic sustainability of their society. They have reached out to customers of higher income to buy products that are organic food and trendy clothes. Walmart has also brought in e-commerce with the hopes that they will compete with Amazon and other online retailers. They are in the process currently of trying to run the stores off nothing but renewable energy. They intend to create no waste and create many different products that will sustain people and the environment. Walmart has contributed to society by giving $1.5 million to victims of Hurricane Sandy, that included money, foods, and much more. With these actions that Walmart has done, they are starting to take their Steps of Social Responsibility. The steps of social responsibility starting with their economic responsibility. This is considered to deal with the maximization of each stakeholder’s wealth or value. The next step that needs attention is the legal responsibility, this means that Walmart as a company needs to make sure that every employee or leader is abiding by all the laws and government relations. The third step is ethical responsibility, in this case Walmart is on the right road to following standards of acceptable behavior that is judged by stakeholders. The last step that creates social responsibility is Philanthropic, which means that the company is giving back to society in which Walmart has already began to do.

For Walmart to be successful and reach the top of the chain where they started, they need to focus on the right things to do. If Walmart were to look at their reputation now and base, it off their very own mission statement they would see that something just doesn’t add up. To be successful companies like this need to evaluate their values on corporate citizenship. Corporate citizenship is used for businesses to strategically meet the economic, legal, ethical, and philanthropic responsibilities that are placed on them by stakeholders. There are four dimensions that create a successful company. They are strong sustained economic performance, rigorous compliance, ethical actions beyond what they law requires, and voluntary contributions that will advance their reputation and stakeholder commitment of the organization. If Walmart were to look at these few things and make corrections, they once again will make there way back to the top. A supervisor can use and apply what I have learned from the case, is to study the steps needed to obtain social responsibility. With studying these steps he/she can create detailed objectives, regulations, develop systems, and instill the vision of their company so that they can reach their goal.