Corporate Social Responsibility of Wal-Mart - Case Study Example

Ethical analysis reflection of a firm al Affiliation: Ethical analysis reflection of a firm Wal-Mart Stores, Inc. is the largest retail enterprise in the whole world, with approximate revenue of about $421.8 billion. The firm also earns an income of about $16.4 billion. Wal-mart is also the world’s largest employer as at 2011 Wal-mart had about 2.1 million employees across the world. Ethics and integrity Just like many other renowned firms around the world, Wal-mart has an ethics and integrity regulation that the employees have to adhere to. Wal-mart’s code of ethics is guided by three main core principles: -Respect for the Individual  -Service to our Customers  -Striving for Excellence  The Global Ethics Office has been mandated with promoting Wal-Mart’s culture of integrity. This comprises of developing and maintenance of policies for moral conduct among all the stakeholders in each of the countries that the firm operates in. Guiding principles In order to ensure that all the employees, as well as associates, acts with integrity and makes the right decision, the firm has a set of laid down guiding principles. At all times work with honesty. Show the way with veracity, moreover anticipate others to operate with integrity. Abide by the law all the time. Be straightforward and reasonable. Disclose all information candidly, exclusive of manipulation or distortion. Work, dealings, and associations should not create a conflict off interest. Respect and promote variety, and by no means discriminate against any person. If one is faced with an ethical question in regards to the statement, consult the manager at the global office. Swiftly report alleged contravention of the declaration of Ethics. Cooperate and also maintain the confidential aspects of any inquiry of a likely moral code infringement. Whilst involved in any moral code inquiry, you ought to disclose all information honestly. You must present all the particulars without opinion, prejudice, or conclusion. Even though Wal-mart has put down laid down principles to ensure the integrity and ethical behavior, there are some aspects that it has failed to put in place. Remuneration issue should be added to ensure that even the low ranked employees get a decent salary that can enable them to take care of their families. Wal-Mart’s Responsibility  The Wal-Mart company is a multi-billion dollar business; it owns about 6400 stores and has about 1.8 million sales acquaintances worldwide. One method that Wal-Mart has utilized so as to maintain a competitive edge over its other competitors is by minimizing of benefits to their employees. According to statistics, the full-time employees at Wal-mart makes about $8.Furthermore, it is only about 45% of the full-time employees who are entitled to medical cover. In order to ensure that the firm spent less money on health insurance, it has increased its part time employees from 20% to 40%. According to the philosopher by the name of Freeman each and every corporation, has the mandate of ensuring that it remains loyal to its mission statement as well as corporate values.”To give ordinary folk the chance to buy the same thing as rich people (Freeman, 1994). ” is Wal-Mart’s mission statement. Most of the employees at Wal-mart are ordinary people thus if they are not able to shop at Wal-Mart after receiving their pay then the company is not adhering to the mission statement (Freeman, 1994). The Wal-Mart Corporation has remained an attractive employer amongst Americans because it provides of abundant jobs all over the country. Even though Wal-Mart work policies do not directly violate the United States of America’s Labor Laws, regrettably Wal-Mart uses abusive labor practices at home and abroad. This is through paying their workers extremely low wages. Since the year 2005, in the United States alone Wal-Mart has paid approximately 1 billion dollars to some of its employees in about six different cases connected to issues of unpaid work. According to some employees Wal-Mart is opposed to whichever structure of joint action, even when workers are not of the opinion of forming unions (Freeman, 1994) .Wal-Mart unethical practices have also been alleged to have taken place abroad. Most of the workers at Wal-Mart workers take home an anticipated $8.00/hour with a 32-hour work week. The amount comes to about $256 a week that translates to about $13,312 a year. In the meantime, Wal-Mart CEO Mike Duke was awarded a 14 percent pay rise in 2012, bringing his pay to about $20.7 million. According to the national poverty level, for a family of about three members is $14,630. In that aspect many of the single parents working for Wal-mart can not be able to provide adequately for their families and also pay for the health insurance schemes. Thus, most of the workers have been forced to take on numerous shifts so as to enable them afford some of the necessities. According to Markkula Wal-mart, has also been charged because “of laying off most of the old workers do as to replace them with the young employees who are able to provide cheap labor (Markkula, 2007). According to “Utilitarianism and Kantian Ethics”, corporations ought to take action in ensuring that all employees are treated in a humane manner. Wal-Mart relationship with its employees is not ethical; the firm values the stockholders more than the firm values the employees. In that aspect it can be ascertained that Wal-Mart treats the stockholders much better than the employees an attitude that is not ethical at all (Shaw, William and Vincent Barry, 2001). Wal-Mart has also been alleged to have been implicated in various scandals abroad; a multiple of cases has involved bribery. Some of which were discovered by the public as a result of publications in magazines and newspapers. A story published in the New York Times in April of 2012 revealed dozens of fishy payments that had been made to Mexican officials of about $24 million. According to the New York Times, Wal-Mart obtain hundreds of internal reports of corruption and deception each year (David Barstow, 2012).” In order to investigate the allegations of fraud Wal-Mart has spent about $35 million from the spring of 2011 to hire lawyers and accountants (David Barstow, 2012). Disasters Wal-Mart, as well as other Multinationals companies, have been linked to various injuries as well as deaths in some of their workplaces especially in countries synonymous with low wages and skills. Most of these countries are in Asia where there is ready cheap labor available. The working conditions in those countries are also deplorable. Bangladesh is second largest garment exporter after China in the world. Between the year 2011 and 2012 the country earned about $19.1 billion this accounted for about 13 percent of the countrys GDP and 78 percent of the total annual exports. Wal-Marts guidelines to overseas suppliers So as to ensure, that the employees of Wal-Mart and overseas suppliers do not mistreat its employees in January of 2012, the firm put down some guidelines that the suppliers have to follow. The guidelines included compliance of local laws, working hours, health and safety, right to collective bargaining, ethical employment practices, conflict of interest and conducive working environment. Ironically Wal-mart has forbidden all its suppliers from disclosing any information that is linked to their relationship. Unfortunately since the inception of the guidelines dome disasters have been reported to have taken place. Bangladesh fire disasters Bangladesh is one of the countries that workers are exposed to the worst working conditions as well as pay. Garment industry workers earn about $37 a month, thus making it one of the lowest wages in the world. Workers from the sector have tried to have the wages raised but they have been successful due to the defiance from the most of the foreign buyers has made it impossible (Syed Zain Al-Mahmood, 2012). On November 24, 2012, fire razed down the Tazreen Fashions garment factory in Dhaka, burning to death about 111 people and injuring approximately 150 more. Even though the plant made garments for various multinational companies, it lacked some very basic amenities such as fire exits. A large portion of the garments produced by the factory belonged to Wal-mart. In that case it was unethical for Wal-mart to award such a factory the task of making their garments. After the incident, Wal-Mart and other multinational companies denied any knowledge of the factory producing their garments. However on the 26th of November of 2012 Wal-Mart severed its ties with the factory by stating. The reality that this took place is tremendously disconcerting; the firm will carry on with the quest of promoting safe working conditions. The firm will also carry on with the fire safety awareness education in Bangladesh (Syed Zain Al-Mahmood, 2012). Socially responsible and create a more ethical environment In order to make sure that Wal-Mart can achieve a more ethical environment, there are various issues that will need to be investigated. This will ensure that the firm itself and the suppliers follow the laid down rules and regulations that are ethical and not discriminatory. The firm should ensure that the firms itself comply with their own laid down code of conduct and that the compliance is maintained and verified from time to time. The firm should institute an independent auditing committee, which will ensure that all the employees comply with the rules. The audit committee should also be given the task of taking appropriate action in cases where there is poor or partial compliance of the laid down procedures. In order to avert then possibility of the firm being associated with some disasters such as the deaths associated with unhealthy working conditions, Wal-Mart should ensure that an inspection committee is introduced. The inspection committee will task with the responsibility of inspecting the working conditions of the potential suppliers before being given the mandate of producing the garments. The last aspect that the firm will have to address is the interest of the employees, even though the stockholders are of significance the firm should also look out for the interest of the workers. This can be made by making certain that the wages the firm (Wal-mart) gives to the employees is enough to enable them carry on with their day-to-day needs. References David Barstow, (2012) “Wal-Mart Hushed Up a Vast Mexican Bribery Case," The New York Times. Freeman Edward, (1994). A Stakeholder Theory of the Modern Corporation. Ethical Theory and  Business, (Englewood Cliffs, NJ: Prentice Hall,), 66-74. Syed Zain Al-Mahmood,( December 13, 2012) "Bangladesh Fire Raises Pressure to Improve Factory Safety," The Wall Street Journal,. Markkula Center for Ethics (2007): Santa Clara University. “Is it Ethical to Shop at Wal-Mart?” 09. Shaw, William and Vincent Barry (2001) “Utilitarianism and Kantian Ethics” in Moral Issues in Business, 8th Ed, Belmont: Wadsworth, 59-69 Read More