The following report will discuss American retail giant, Wal-mart’s current ethical and business objectives. The report will look at Wal-mart’s employee relations in regard to discrimination and other various issues involving their employees. It will look at how their ethical stance contradicts with what has gone on in the past regarding associates (employees) and management. We will also look at their business objectives or as Wal-mart calls them – “comparable store sales”, where they measure the sales on a like for like basis from the previous year.
Included will be Wal-Mart’s sustainability report, and Wal-Mart’s ethical statement. The report will look at what Wal-mart does for employees and what has been reported by employees and watch-dogs and draw up conclusions. And what current legislative trend they’re reported to be ignoring or not practicing what they preach. Wal-mart’s ethical perspective on employee relations and their commitment to being ethical. In the workplace there are many issues on employee relations; Pay, sex, race, religion, disability and equal opportunities are a few of the issues Wal-mart will deal with.
For Wal-mart to embrace everyone in the workplace, they set out a social responsibility report on diversity for their employees. Wal-mart’s statement of ethics even encourages whistle blowing; “All of us should constantly work to maintain a working environment that encourages associates to raise concerns about possible violations of our Statement of Ethics. Often we hear stories of other companies where employees were aware of problems, but did not feel comfortable coming forward. No one should feel that way at Wal-mart. Please report possible ethics problems immediately so they can be resolved before more serious consequences develop”. Wal-mart statement of ethics) Wal-mart has three ethical basic beliefs – Respect for the individual, Service to our customers and striving for excellence. These beliefs are from the Wal-marts founding father, Sam Walton. Sam would never have realised Wal-mart would be posting quarterly net profits in 2010 of ? 2. 9 billion. Christine Seib, Times (2010). Wal-mart also has guidelines for all employees to follow: and •Always act with integrity •Lead with integrity, and expect others to work with integrity. •Follow the laws at all times •Be honest and fair Reveal and report all information truthfully, without manipulation or misrepresentation
• Work, actions and relationships outside of your position with the company should be free of any conflicts of interest •Respect and encourage diversity and never discriminate against anyone •Ask your manager or Global Ethics Office for help if you have any questions about this statement, or if you face an ethical problem •Promptly report all violations of the statement of ethics •Cooperate with and maintain the private nature of any investigation of a possible ethics violation •When involved in an ethics investigation, you should reveal all information truthfully, you should present all facts truthfully, without bias or judgement (Wal-mart statement of ethics) Wal-mart’s ethical perspective could be described a teleological as they work for the greater good for all their stakeholders. Community, suppliers, employees, shareholders and environment are the many issues Wal-mart tackles when striving for excellence. They believe in doing what’s right to achieve their company objectives. Wal-mart’s ethical statement covers directors, employees and third party associates like suppliers. They’re expected to abide by these have a basic understanding of the statement, since memorising the whole policy is not realistic. However, Wal-mart operates in many countries that have their own laws on business and Wal-mart recognises they need to adapt to each country’s laws.
Their statement of ethics is generic in that it’s issued to all stores and stakeholders around the world – but it is able to be built into other countries legislative laws. “Don’t compromise your reputation. It’s a precious commodity. Don’t compromise your integrity, have a good name” (Sam Walton). A defining quote from Wal-mart’s founding father on how he believes A person should live by in the work place. In dealing with ethical issues Wal-mart have an “open door process” where they encourage all associates to use if they believe to see unethical actions being taken by fellow colleagues or any other stakeholder in Wal-mart. Or they can contact The Global Ethics office to report any concern.
Various means of Harassment is not tolerated in Wal-mart and it’s considered a violation of one the three basic beliefs; “respect for the individual”. Harassment is defined as “Any conduct which inappropriately or unreasonably interferes with work performance, diminishes the dignity of any person, or creates an intimidating or otherwise hostile working environment “. (Wal-mart statement of ethics). One the main reasons people go to work is for their physicology needs (salary) and Wal-mart make it clear in their ethics statement that the comply with state or national laws regarding pay. Managers in the business are expected to carry this out fairly without discrimination. It’s also a violation for managers to forces colleagues to work off the clock. It is a violation of law and Wal-Mart policy for you to work without compensation or for a supervisor (hourly or salaried) to request that you work without compensation. You should Never perform any work for Wal-Mart without compensation”. (Wal-Mart statement of ethics). ?
At Wal-mart, the company takes conflicts of interest seriously and they expect you to tell your manager before if one might arise. The conflict could be for financial gain for yourself or the other party. Examples of conflicting financial investments are: •Financial interest in a vendor of Wal-mart, if you have direct or indirect involvement in our business with that vendor. Substantial financial interest in a competitor. •Receiving personal compensation from a vendor, if you have direct or indirect involvement with our business concerning that vendor. •Using confidential company information for personal gain. •Ownership of stock in a competitor with a market value in excess of $20,000 must be disclosed in writing to the Global Ethics Office. The Global Ethics Office will decide whether or not a conflict, or potential conflict, exists and how it should be handled. •Wal-mart encourages associates not to have social or other relationships with suppliers if the relationship would give the perception that a business influence is being exerted.
We believe in basing our relationships with suppliers on efficient, fair and lawful business practices (statement of ethics) Wal-mart will support and encourage any associate believed to be influenced by another party that may have interests in Wal-mart. Any colleague should report it to their manager or Global Ethics Office. At Wal-mart, the company expects personal relationships kept to minimum, that they don’t accept gifts from others for performing work that they’re paid to do. They have strict financial regulations so as any insider trading can be dealt with, and expect associates (employees) to “whistle blow” about possible poor financial practises.
Wal-mart will only hire a person that has the right to work in the country they’re applying to work in or have the relevant visas that gives them the right to work. “We strive to be good corporate citizens. Therefore, we may not hire, recruit, or refer for a fee, anyone not legally authorized to work in the country in which employment is sought. It is our responsibility to inspect, verify, and document the identity and employment authorization of every new associate, including associates who are international expatriates on assignment in a foreign country. We are also responsible for re-verifying the continuing employment eligibility of each associate by requesting further documentation when the initial work authorization has expired.
All persons we hire or send to a foreign country on an expatriate or transition assignment must provide proper documentation and verification of their authorization to work in the country where they are to be employed. In complying with immigration laws, it is important to follow our policy against employment discrimination on the basis of national origin or possible citizenship status. We require all employment agencies, contractors and others doing business with us to fully comply with all Immigration laws. ” (Statement of ethics). One of the big issues of today – is health and safety, and Wal-mart takes the health and safety of their associates seriously and conducts themselves in an ethical manner.
The company would be seen to act in a teleological manner as if they don’t just act lawfully, but for the greater good of their customers and associates. “We’re committed to the health and safety of our customers, members, and associates, because we care for one another. Conducting our business in compliance with all health and Safety laws are crucial to protecting each other from harm. As an associate of Wal-mart, always comply with all relevant health and safety laws and policies. By following these, we can create and maintain a safe shopping and working environment for our customers, members, and associates. ” (Wal-mart’s statement of ethics)
Providing associates with health cover is seen as important to the company and more importantly, their associates as health care in the States can be very expensive for people on the minimum wage. Wal-marts statement of ethics is for the employees of Wal-mart and expected it be followed at all times. Any violation of the statement will dealt with and can lead to dismissal from Wal-mart. Having read through Wal-mart’s statement of ethics, it’s clear they take the welfare of all associates importantly and work for the greater good of all their stakeholders. Their ethical approach would be described as ‘utilitarianism’. Mike Duke, President and CEO at Wal-mart has stated the importance of being ethical; “We also must continue assuming the later role that Lee helped us realize we can play in the world.
People have been asking me, “Mike, during these difficult times, can we afford to do things like sustainability, responsible Sourcing, associate opportunity and health care? ” Every time my response has been, “We can’t afford not to. ” At Wal-Mart, we have an opportunity and a responsibility to lead in the world. Sustainability is a permanent part of our culture. It helps us remove waste”. A very clear and concise statement from Wal-mart’s figurehead that Wal-mart must be ethical to compete and grow in today’s business world. Business Objectives: Like any multinational company, they have to plan for the future and draw up future forecasts on how the business will perform.
Stakeholders rely on these and in particular, shareholders, as they look for bigger return on their investment through share dividends. For 2010, Wal-mart has forecast their sales of a comparable store sales basis and due to their international business sector and the volatility of the international currency they draw up accruals of 10% each year so as they can continue to profit from all business sectors. Wal-mart realise the global economy is unstable but with continued investment of ? 12. 5 to ? 13. 5 billion pounds, they intend to grow and give the very best in service so-as customers can live their lives cheaper everyday. Wal-mart’s shareholders expect a fair return on their investment and in 2009; they received 19. 3% return on their investment.
Payments are split into four quarters and Wal-mart has said they’ll be paying out more dividends in 2010 because of the growth in profits. However, when key objectives are set, the pressure to achieve these goals can be intense and lead to stress and bullying from management. It can also lead to discrimination from managers because that individual manager might want short term success and will over look woman, older people, younger people or minority groups in favour of the your stereotyped American. Though, it’s stated that long planning is important, goals are generally short term with a year to achieve business objectives, this leads to poor decision making and bad man management of the colleagues at Wal-mart.
It’s very easy to delegate objectives and expectations but there must be a line drawn between what has to be done and what can be done! When dealing with people, there must a motivating factor above your normal everyday needs to strive to be the best, so at Wal-mart, the company has a share scheme that all employees are a part of and bonus structure that all employees can benefit from of they give that little bit extra. Victor Vroom stated that the bigger the reward the bigger the motivations to achieve objectives are. Bonuses and share schemes are two of the ways Wal-mart look to influence their staff to go the extra mile. Wal-mart sees its rewards schemes as another ethical behavioural objective that is done fairly and without prejudice.
If Wal-mart is to prevent any conflict between business objectives and employee relations, the objectives must be realistic – and the right people must be in the right place at the right time with the right tools to do the job. ? Wal-mart’s employee relations from a different perspective: Wal-mart comes across as very proud of their stance within the business ethics community and has taken steps over the years to improve on their statement of ethics. Business ethics continues to grow and evolve all the time and Wal-mart has to date, kept up with those. However, all is not gone according to plan, or in the case of Wal-mart, their statement of ethics. Countless lawsuits and bad press regarding many ethical issues has arisen due to Wal-mart’s conduct when doing business or managing their own colleagues (associates). There ave been many, many cases of poor relations between employees and management over the years and Wal-mart’s staunch anti-union policy has done the company no favours in the public arena. A quick Google of “Wal-mart’s employee relations” brings up literally thousands of cases where colleagues has felt victimised, bullied, harassed and discriminated against on the grounds of sex, race and religion. Firstly, we’ll look at a few cases regarding Wal-mart’s reputation with her colleagues, and then look at a case that will be the largest of its kind in American history. “Wal-Mart has a long history of opposing unionization. Sam Walton was notorious for trying to keep unions out of his stores. In fact, Walton hired union-busting lawyer John E.
Tate to quash some of the earliest efforts to organize stores in Missouri. Despite a successful unionization effort in China, Wal-Mart will not budge from its position in the United States and Canada. However, with the election of Barack Obama and the potential passage of the Employee Free Choice Act, Wal-Mart is clearly afraid that its anti-worker practices of the last half century might be coming to a close. Wal-Mart says its associates do not need a union. Wal-Mart Watch, however, believes that after years of low wages, expensive health care benefits, and poor working conditions, Wal-Mart workers can finally see a light at the end of the tunnel”. Wal-martwatch (http://walmart. 3cdn. net/0bd88c4e9b5666361b_okm6bnxer. pdf) “In February 2000, ten employees of the Wal-Mart meat department in a Jacksonville, Texas store elected United Food and Commercial Workers (UFCW) as their union. Wal-Mart immediately ended their entire network of in-store butcher departments. The company refused to recognize and negotiate with the meat cutters union, and instead traded the work of experienced employees for the convenience of pre-cut and pre-packaged meats”. [Occupational Health & Safety, 3/16/08] After taking the case to the US Court of Appeals for the District of Columbia, UFCW was faced with a test they simply could not pass.
The court ruled that UFCW failed the legal standard ‘community of-interest test’ and a unanimous three-judge appellate panel upheld Wal-Mart’s right to eliminate butcher departments ruling they had no particularly special skills. The court placed the incident as analogous to a typical closing, effectively cutting butchers out of the picture for good”. [Occupational Health & Safety, 3/16/08] A very damming report about how ruthless Wal-mart can be to keep the union out and keep control of employees. Another report goes onto say how they influence, or try to influence how colleagues vote: “More recently, it was revealed that Wal-Mart has been warning its hourly supervisors of the likelihood of unionization if Democrats won the November election. One supervisor said: “I am not a stupid person. They were telling me how to vote. Workers say they used intimidation by emphasizing all the negative effects of unionization and warning them if the Employee Free Choice Act passed, it would speed up the union process. [Wall Street Journal, 8/1/08] All of these reports and more are cited in “www. walmartwatch. com”, but what has to be realised is – these type of blogs usually come from people who have an axe to grind or have bad experiences in the past, resulting in bias reporting. What is interesting is the website cites all its information and they’re from major publications such as” The Wall Street Journo” and governmental websites. Yes. The site only picks up on the negative but the amount of bad press and lawsuits are quite surprising for a multinational company that preaches ethical businesses practices.
It’d be fair to say on the evidence of lawsuits and bad press, Wal-mart are taking a ‘relative’ approach to business. Wal-mart, a typical business that will cut costs to increase profits as much as drive sales, and Wal-mart’s way has been to force colleagues to work off the clock and skip tea breaks: Armijo v. Wal-Mart Stores, Inc. State: New Mexico Class Size: 10,000 estimated Current Status: Ongoing; Class Action Summary: On June 12, 2007, the Court of Appeals for the State of New Mexico upheld a district court decision certifying Armijo as a class action. According to the plaintiffs’ complaint, it is alleged that Wal-Mart’s corporate policies and practices are geared towards promoting the maximization of profits hrough the minimization of labor costs, creating an environment where hourly employees work off the clock and through meal and rest breaks. In addition to statistical analysis of clocking in and clocking out patterns, plaintiffs point to an internal Wal-Mart audit first referenced in Iliadis v. Wal-Mart (see below), known as the “Shipley Audit. ” The audit, prepared in July 2000, revealed numerous failures by Wal-Mart to comply with Wal-Mart’s own rest and meal break policies, and warned that “Wal-Mart may face several adverse consequences as a result of staffing and scheduling not being prepared appropriately. ”iv An interesting note on this case is the claim for breach of contract.
The plaintiffs will be required to prove that Wal-Mart was contractually obligated to provide rest breaks for its employees, that a missed rest break constitutes a breach of that contract, and that the breach resulted in damages to the employees. The Court of Appeals agreed that whether a contract actually exists is a question common to the class, and pointed out that Wal-Mart does have a written policy regarding rest breaks that applies to all hourly employees. At trial, under review will be the employee handbook, oral orientation sessions, and the uniformity of orientation sessions and employment policies from store to store. (http://walmartwatch. com/img/blog/wage_and_hour. pdf) ? Carter v. Wal-Mart Stores, Inc. State: South Carolina Estimated Class Size: 100,000 Current Status: Ongoing; Class Action Summary: On August 7, 2007, Charleston County Circuit Court Judge Perry M.
Buckner III ruled Wal-Mart must face a class of more than 100,000 South Carolina employees claiming wage and hour violations. Wal-Mart workers in South Carolina filed suit in 2001 claiming Wal-Mart forced them to work through breaks and off the clock. Similar to previous cases, the claims stem from complaints of understaffing, resulting in workers having to skip breaks and work before or past normal shifts in order to compensate. (http://walmartwatch. com/img/blog/wage_and_hour. pdf) Both these cases are a drop in the ocean and clicking onto the website you’ll find eight pages of class actions from employees against Wal-mart regarding pay, meal and rest breaks.
What it doesn’t state however, is the states own laws which leads me to believe, Wal-mart is relative in its approach to managing colleagues and conducts its self in a manner that `when in Rome do as the Romans do’. A classic relative approach to business ethics. Wal-mart need to be more `absolute’ in their ethical approach and practice what they preach! The most recent class action and potentially the biggest in American history is six women, who worked in 13 Wal-mart stores between them, are taking their case to the Supreme Court alleging systematic sexism by Wal-mart’s employers. The claim women are paid less for doing the same jobs and are un-favoured when it comes to advancement within the company.
Wal-mart have argued that Wal-mart is a great place for woman to work and that they encourage and foster great woman leaders. They’ve also argued the class action of one million women is too big and unmanageable. However, the court ruled that the size of the class action isn’t too big and that it must be heard as all companies, big or small, must comply with the law. The case can be found at: http://abcnews. go. com/WN/Business/wal-mart-sex-discrimination-case-trial/story? id=10480510&page=1 The case was submitted in 2001 and is now being heard nine years later in 2010. The potential cost of the case could run into billions of Dollars and the reputation of Wal-mart, worldwide, is now up for scrutiny. ? Solutions that Wal-mart should take:
Wal-mart would be wise to look up the history of poor ethical practices from other multinationals on how they come about a decision and action plan for going forward and becoming the teleological company they say they are. Firstly, Cadbury’s, who are renowned throughout the world for their ethical approach and virtue policies. Cadbury’s, in July 2007, the company was fined ? 1 million and lost trade and respect for not practicing what they preach. Cadbury’s soon came out and apologised for the food safety offence and soon after, gained back the lost trade and its reputation in a relatively quick period. The company has reaffirmed its virtue approach to business ethics. Then secondly, Toyota, one of the world’s biggest car manufacturers, was recently in the spotlight for producing cars with faulty breaks and clutches.
The company at first seemed to ignore the problem and refused to recall the cars made in the timeframe that had faults. But, after around two months, they started to recall the cars and make way to apologise, though at first the apology didn’t seem to heartfelt according to how the Japanese do apologies via the presidents body language. It seems Toyota have a long to before it she recovers her reputation and can put out its adds with the slogan “the car in front is a Toyota”. A phrase coined because of the popularity of the cars. Wal-mart can also look closer to home, as ASDA, their UK subsidiary, is continually listed in the top 10 companies to work for in the UK.
ASDA achieves this by taking the virtue approach to managing her colleagues and valuing the colleagues’ contribution to her success. If Wal-mart reflects back on its behaviour and realises it hasn’t been practising what it preaches, then Wal-mart can move forward and build relationships with its people. The workers are at the forefront of Wal-mart’s success because they’re in touch with customers and suppliers. Wal-mart needs to take an absolute or virtue approach to doing business and do what they claim to do in their statement of ethics. The policies and procedures are there, Wal-mart needs to use them appropriately. The company directors can easily blame their management team and due the size of the company, problems will exist but not on the scale of today.
Company directors are the figureheads of Wal-mart and need to recognise they’re responsible for what happens at ground level as well as board room level. ? What’s in it for Wal-mart? There is no doubting the success of Wal-mart and their standing in the world as the world’s biggest retailers. But how they go about it is questionable, with so many `horror’ stories, class action law suits, press and media reports the company has much to improve on. By building bridges and apologising for their actions, the company can be even more successful that it has been. The workers will want to do better for Wal-mart and show greater loyalty and enthusiasm that clearly doesn’t exist.
It’ll be easier to motivate the workers because they’ll feel appreciated. Shop floor workers are the first impressions customers get of Wal-mart and if they see happy, friendly and courteous staff, it’ll be even easier to retain customers than before. On the international stage, host countries will be keen to see Wal-mart in their country and would see Wal-mart as the leading light in business ethics. To be seen as a leader in your own industry can lead to bigger and greater things. It could see Wal-mart and all its associates across the globe, benefit! All stakeholders can benefit from Wal-mart changing their image through greater sales, income, share dividends, supplier prices and community events.
The environment will benefit too, as Wal-mart with nearly 5000 stores worldwide, there is the danger of their actions can help play their part in restoring the local environment. ?
Bibliography: Page 3: Wal-mart’s statement of ethics pdf file, Christine Seib, Times (2010) Page 4-7: Wal-mart’s statement of ethics pdf file, financial condition Wal-mart pdf file Page 8: http://walmart. 3cdn. net/0bd88c4e9b5666361b_okm6bnxer. pdf, Occupational Health & Safety Page 9: http://walmartwatch. com/img/blog/wage_and_hour. pdf Page 10: http://walmartwatch. com/img/blog/wage_and_hour. pdf Page 11-12: Business Ethics (Tom Sorell& John Hendry) 1994