Comparison of Walmart and Target Policies and Practices - Term Paper Example

Introduction Ethical and environmental policies and practices have undergone radical changes. Around fifteen years ago, companies assumed that environmental and ethical polices only adherence to legal standards. However, things have taken a turn for the better; businesses have now become more vigilant about environmental compliance and business ethics. This shift occurred after the realisation that one ought to acquire confidence and respect from their clients. Today, consumers are expecting so much more from business. They require businesses to depict business ethics in their practices. (Ethics scoreboard, 2006) Numerous firms- whether big and small- are responding to this growing pressure. The retail chain sector (especially supermarkets) is one of the most scrutinised sectors of the economy. Companies under this category are required to be accountable for their actions. On top of that, companies are also required to improve their corporate responsibility both to society and to the environment. This essay shall look at the ethical and environmental practices and polices of the top two retail chains in the United States of America; Walmart and Target Corporation. Comparison of environmental and ethical policies within Walmart and Target Walmart has one of the most elaborate ethical polices within the industry. Part of the reason for this is that Walmart has a tendency of issuing new ethical polices after facing a legal crisis or a new challenge. For instance, in the year 2005, the company issued a lengthy policy statement after ousting seven mangers that had been working for the company. The company's policy statement outlined some of the obligations that employees are required to adhere to when dealing with clients. Walmart is very strict about the personal conduct of its staff members within the employee-customer relationship. Employees are required to exercise honesty, respect and good judgement. The company usually informs its employees that they are not supposed to receive any sort of gifts from their employees, vendors or other vested parties. On top of that, the company is very strict about the issue of conflict of interests. Associates are not expected to have any social relationship with vendors. (Smith, 2005) Walmart's ethical polices also stretch to the accounting practices of the firm. This area is especially sensitive because other firms in the retail sector have spent millions of dollars in lawsuits doe to non-adherence to accounting ethics and practices. The company asserts that accountants who fail to hold utmost accounting practices will be ousted out of their positions with immediate effect. Walmart also covers ethics in staff employment practices as the company also extends its social responsibility to employees within the company. For instance, all workplace benefits relating to marital couples have also been extended to gay unions. Additionally, the company believes in the fact that no employee should be discriminated upon. The same policy also applies to clients. All clients in Walmart ought to be treated in manner that is sensitive and respectful; the company will not tolerate any cases of racism, gender bias or any other sort of discrimination. On top of this, the company believes in meeting its obligations towards its employees by giving them their due payments and benefits. Walmart firmly believes that all of its stakeholders should exercise corporate responsibility and share many similar values. The company's representatives assert that Walmart is keen on its suppliers and how they produce their goods. Supplies who engage in unethical practices such as child labour, poor payment of staff members and use of hazardous materials can result in discontinuation of business. All these policies also apply to Walmart itself. Similarly Target also expresses similar sentiments. However, Target is more vigilant about these policies than Walmart. This is because Target Corporation has signed a Supplier compliance Statements created by the National Retail Federation. By doing this, Target is demonstrating a commitment that is not only adheres to these supplier ethical principles in writing but also in actions. Target firmly believes that their suppliers, vendors and manufacturers should adhere to strict ethical standards. The company has laid out the following requirements for its suppliers All suppliers must pay their employees fair wages They must comply with safety standards at the workplace They must not engage in any forced labour They must not force their employees to work They must be non-discriminatory with fair working hours (Wilson, 2008) In line with Walmart's assertions, Target also declares that they can terminate a supplier's contract if they do not adhere to any of the following rules. However, Target has demonstrated a commitment to business ethics over and above Walmart by forming an organisation to deal with the issue specifically. The company formed the organisation so that it could educate all its vendors about the importance of adhering to ethical principles. Unlike Walmart, Target takes ethical principles to another level by sensitising others and then following it up to endure that they comply. When its comes to environmental matters. Both companies are committed to environmental protection polices. Target Corporation normally disseminates a quarterly newspaper that gives sustainability measures to employees. It also looks for ways to minimise waste, recycle products and it avoids products that are harmful to the environment. Walmart environmental policy is also quite comprehensive. The company has asserted that it will give precedence to environmentally friendly packaging material. On top of that, it has also asserted that it will do its best to eliminate excessive waste into the environment. (Fishman, 2005) Comparison of Target and Walmart practices Walmart has been the target of numerous demonstrations in the news. On such example was a protest organised by the Pennsylvania University students in the year 2005. At that time, the university students argued that Walmart is one of the most profitable organisations within the country yet they were not reflecting this in their employment practices. The students asserted that fifty two percent of Walmart's' staff members had no access to health insurance. Consequently, Walmart was not following its assertions about giving employees their rightful entitlements. Closely linked to this report was a lawsuit against Walmart about sexual discrimination. Some female employees from the giant retail chain asserted that women were paid less than men. They also claimed that Walmart managers rarely consider women for key positions within the company. Consequently, it was not sticking to its ethical obligations. (Santiago, 2005) Target has also received some criticisms for its employee practices. While the company asserts that it respects all of its employees regardless of their gender, race, age and other traits, it has failed to show this commitment to minority group employees. A group known as the NAACP asserted that Target Corporation is one of the retail chains that has performed very poorly in terms of recruitment and treatment of minority groups such as African Americans. In a scheme that normally rates companies in terms of employee diversity and respect, Target Corporation received grade F. This indicates that the company still has a long way to go. Compared to their Walmart counterparts, Target Corporation lags behind in the area of diversity management. Walmart has adhered to its ethical policies on employee behaviour. The company is very strict about engaging in practices that cause conflict of interest. Therefore in 2007, the company fired a senior manager within the firm called Julie Roehm. The latter manager had accepted gifts from vendors and other interest groups. Additionally, this lady also had a secret affair with a subordinate within the company. This was in breach of Walmart's code of ethics thus causing her termination. Walmart's practices may be just a tiny segment of their polices. This was brought to bear in the year 2007 when the company fired one of its employees in the communication department. On the day of her recruitment, this employee underwent rigorous training about the importance of ethics in Walmart. Her superiors even told that when she sees anything that resembles an ethical breach, she should report it. However, when the latter employer found out that one of her seniors was doing something unethical; he had signed a form that would allow stock buyouts to the tune of fifteen billion dollars; she decided to forward the case. Instead of doing something against the unethical employer, Walmart turned the blame on the reporter; Chalace Lowry. The company asserted that the form she saw was mistaken for something else and that she should look for another position within the company. Since Lowry did not find any position within the company, she lost her job. This was a step back in Walmart's' ethical practices. The department that had been campaigning about ethical principles in Walmart ended up firing an employee for adhering to those ethical principles. This was very unfair. Walmart has a larger pool of critics than Target when it comes to ethical practices. (Target Corporation, 2008)Part of the reason for this could be that Walmart is much larger than Target. However, another reason could be that Walmart has just not been serious about their ethical polices. The company has critics like Wake up Walmart and Walmart watch who have labelled it as an anti-union company. On top of that, Walmart's' critics have also asserted that employee's wage labour requirement are lagging behind. Target has also faced a few law suits but all of them, cannot surmount to the number that Walmart has had to deal with over the past few years. This means that Walmart must step up its game. In response to some of its criticisms, Walmart opted to hire an ethics manager within the company. The company created this job so that it could demonstrate to the world that it was indeed listening to some of their criticisms about poor ethical practices within the company. The company asserted that the person to fill up that position had to respond to an established ethics hotline to be set up the company. Additionally, the person also had to deal with the company's chief executive officer directly. These measures were put in place to demonstrate to the world that Walmart was serious about ethical practices. Target Corporation has a sound environmental policy but they failed to demonstrate this commitment to environmental policies through their pesticide products. The company is governed by strong environmental policies that are geared towards future protection of the environment. These include products that may affect the environment in one way or another. The company, as a member of the EPA, was required to disclose the level of pesticides found in its commodities. However, Target did not oblige to this requirement and this indicated that they had something to hide. If their commodities have pesticides, then this could be detrimental to the consumer and also to the environment when disposed off. (Besafenet, 2008) Both Walmart and Target Corporation have been criticised for their waste management programs. The companies assert that they would incorporate environmental management practices in waste management; this is yet to be done. Target has committed lesser evil than Walmart because Target has engaged in a Waste Wise program which made it give a commitment of reducing its municipal wastes. However, the company has not translated this into action. The same may be said of Walmart, the company's level of environmental sprawl and community degradation is still very high. The issue of sweatshop labour has affected both Target and Walmart. The US Labour Education in the America's Group actually condemned the actions of Target in 2005. The company had suppliers in Guatemala. The supplier under consideration was a clothing factory offering services to the latter company. The company revealed that this clothing factory was using sweatshop labour in production. When Target was notified about this, they still continued getting those garments from the factory. Walmart has also faced similar accusations. This was especially in terms of some toys that the company was offering. It was reported that these commodities were made using sweatshop labour. By bridging their ethical rules, these two companies have indicated that they are not very committed to their ethical polices which clearly state that they cannot do business with companies offering sweatshop labour. Both Walmart and Target have not indicated their commitment to their environmental policies and ethical rules by offering dangerous products. Target has been accused of selling shower curtains made of vinyl. Additionally, it has been accused of selling toys made of polyvinyl chloride. Similarly, Walmart has also been on the hot seat for selling some dangerous commodities. For instance, the company has a substantial of in store brands and external commodities containing PVC. These range from toys, to home appliances and others. These chemicals are found either in the product itself or also in the packaging. Walmart has been especially careless about the packaging. Both companies have demonstrated that their environmental practices still need improvement. (Besafenet, 2008) Comparison of Walmart and Target management systems Walmart is widely known for its everyday low prices. While so many retailers may be dashing off to the company because of that arrangement, very few of them understand that there is a price to pay for this kind of arrangement. It has been reported in many internet blogs that Walmart pressures most of its suppliers to meet their unrealistic targets. This company makes its very difficult for its suppliers because it expects them to offer goods at a price that will be fitting with Walmart's everyday low prices. The overall result of this is that producers have to close down some of the manufacturing plants. This is because they cannot afford to offset production costs with revenues from Walmart. The side effect of this is that many Americans loose their jobs owing to this. Walmart's suppliers are forced to offshore most of their commodities just so that they could meet these targets. Additionally, Walmart makes hefty demands from its competitors. For instance, the company usually requires that suppliers change their marketing strategies, their packaging and sometimes even the constituents in the products just so that the supplier can continue doing business with Walmart. Walmart dictates prices to its suppliers thus making their supply management system biased towards their side. One can therefore conclude that Walmart is not being ethical in its supply management systems. (Gogoi, 2007) In contrast to this, Target Corporation has not been very vigilant about their supply management systems. While Walmart may take a heads-on-approach to their supply management systems, Target Corporation takes on a rather relaxed approach. The company does not direct their suppliers about their packaging and product presentation even in instances when this packaging may harm sales. Such an approach has put Target in tough positions with regard to their clients. For instance, one consumer sent a petition in media outlets about Target's depiction of infant rompers as a 'cool' thing to do. The client asserted that Target was trying to discourage mothers from breastfeeding and instead telling them to use formulas for their children. This kind of problem would have been avoided if Target had been stricter with their suppliers. Although it is not advisable for Target to adopt a hard stance such as the one that Walmart uses, it would be better if the company noted some potential hazards or problems and then informs its suppliers about it. The company should intensify its level of alertness in its supply management systems owing to the fact that it could cost them in the future. (The 3 minute activist, 2006) One should not dismiss the top retailer Walmart as an unwavering and insensitive company. Actually, some suppliers have testified that Walmart is like a tough mother. The company is very strict about the observance of time and quality. However, it never goes back on its word; what Walmart says, Walmart delivers. This shows that Walmart's' ethical policies can be indicated in the company's management practices. Walmart never falls behind on payment of its bills. Additionally, the company's employees rarely cheat their suppliers. This has gone a long way in building an image of integrity. These are some of the areas that Walmart's sound management practices have paid off; Groceries supplies Electronic supplies Clothing suppliers Conclusion Overly, Walmart and Target Corporation both have very comprehensive ethical and environmental polices. In terms of the environmental policies however, Target Corporation is more committed than Walmart owing to the fact that it has formed an organisation to deal with sustainability issues. In terms of practices however, Walmart has solicited much more criticism than Target for breaching its ethical polices. The company is not sensitive to female employees, offers poor employment benefits, exerts too much pressure on its suppliers and still disseminates a substantial amount of waste into the environment. These and many more issues make Walmart much worse than Target. However, Target is still not free from accusations, as it still offers PVC packaging, has not reduced its waste dissemination and is still doing business with companies that offer sweatshop labour. (Coop America, 2007) Recommendations Walmart as the US's largest retailer ought to lessen its grip on suppliers. As there are so many other companies to choose from, Walmart should not push certain companies against the wall. Additionally, Walmart needs to takes it's ethical manager seriously and should listen to employee's complaints. It is failure to disregard employee's complaints that has brought on these intense criticisms. Target on the other hand needs to put into practice its sound environmental polices. The company should avoid PVC packaging and should accommodate ethnic minorities. Additionally, Target Corp. should take control of their supply management systems to avoid future problems with the consumer. Reference: Wilson, S. (2008): Target Corporation, retrieved from http://www.mde.state.md.us/index.asp accessed on 8th August 2008 Fishman, C. (2005): The Walmart you don't know, Fast Times, 2nd June 2005 Ethics scoreboard (2006): More Ethics of Honest Mistakes; retrieved from http://www.ethicsscoreboard.com/list.html accessed on 8th August 2008 Santiago, J. (2005): Protesters Slap Walmart Ethics, The Collegian, 14th November Smith, B. (2005): Walmart sets new policy on ethics, USA Today; Gannett Incorporated Gogoi, P. (2007): Walmart's Latest Ethics controversy; Business week, Free Press Target Corporation (2008): Global sourcing; retrieved from http://sites.target.com/site/en/corporate/page.jspcontentId=PRD03-004425 accessed on 8th August 2008 Boyle, M. (2006): Walmart desperately seeking ethics; http://money.cnn.com/magazines/fortune/index.htm l Target Corporation (2008): Policies regarding the sale of certain products at Target, retrieved from http://www.target.com/ accessed on 8th August 2008 The 3 minute activist (2006); Baby formula promotions at Target, retrieved from http://www.promom.org/3min/index.htm accessed on 8th August 2008 Coop America (2007): Campaigns against Target, retrieved from http://www.coopamerica.org/programs/responsibleshopper/index.cfm accessed on 8th August 2008 Besafenet (2008): Companies with PVC products, Free Press Read More