Discuss about the Consumers and Sustainability at Walmart.
In this report Walmart, which is one of the well- known retail industry of Australia is selected. The main aim of the organization is to save the money of the people by offering products at lower prices (Lukic 2013). The report covers the evaluation of sustainability activities on the employees, society and environment, ethical issues related with the organization and ways to improve the ethical issues, discussion about the corporate social responsibility of the organization, stakeholder’s key and ethics in communication and practices. The report also contains some recommendation in order to make Walmart more ethical organization in the future.
The main goal of Walmart is to supply products entirely by renewable source of energy without creating any waste and sell those products that help in sustaining both the people and the environment (StankeviÄÂiÅ«tÄ— et al. 2012).For achieving its goals, the organization has built its relationship with influential people in the companies of the suppliers, NGO’s and government (Lukic 2013). With the help of those associations the company has built and created Sustainable Value Network in order to integrate and evaluate its effort in the practices of renewable energy.
In the year 2012, Walmart has implemented “115 onsite rooftop solar installations” in different “seven countries” that help in providing “71 million kilowatt of electricity”(Hyatt 2012). The company has completed almost 26 installations of fuel cells in the United States. Walmart low cost practice of sustainability helps in translating the renewable energy endeavours by signing the contracts with the help of renewable energy providers.
This contract that was offered by the organization at low cost was provided to the different clients. All the activities of the organization are beneficial for the employees of the organization (Waller et al. 2015). With the development of sustainability in the organization, the employees of the organization have to work in environmentally sustainable environment of the organization. The green products supplied by the company are beneficial for everyone including the organization. For measuring sustainability, Walmart has launched Sustainability Index.
The organization is in the goal of zero waste and therefore the company has successfully converted 1.2 millions of pounds of cooking oil into biodiesel soaps (Malhotra et al. 2013). The organization is also testing recycling methods that aims to allow the company to reduce its use of global plastic bags by 35% (Carter and Jayachandran 2012). In addition the organization has stated installing micro-wind in different sites for reducing the use of non0renewable energy. For conserving non- renewable energy for the future generation, the company has become the third largest purchaser of green power in the world and second largest onsite green power generator.
The organization has financed its own renewable energy projects. In order to reduce the consumption of energy, Walmart has facilitated conservation of energy by following two major methods (Chekwa et al. 2014).The company has implemented new stores with the “daylightning” features that help in enabling the stores to turn off light as the “daylightning” feature helps in reducing the demands of electricity.
Secondly the organization have managed the energy consumption by having control on the heating and cooling of the stores of Walmart (Vanleer and Squires 2016). The company has opened a store with LED lightning that helps in opening freezes with the help of the secondary refrigerator system. This helps in reducing the greenhouse gas emission (Foley and Havice 2016). The organization is in the attempt of reducing the fossil fuel use. With the help of green products the organization has reduced the emissions of carbon by 41000 tons.
Ethical issues faced by Walmart
Walmart have faced many ethical issues. In the year 2005, Thomas Coughlin who was the board vice chair was forced to resign. This is because he has stolen more than $ 500 000 from the organization in the form of expenses, compensation and unauthorized gift vouchers (Martin 2015). In the year 2006, Coughlin has decided to beg as he was guilty to “wire fraud and tax evasion charges”. He have taken away millions of dollars in the name of compensation and gift vouchers, he has secretly used the organization’s fund for paying the personal expenses including the expense of haunting vacation (Ferrell and Fraedrich 2015). Coughlin dishonesty was discovered when he has asked one of his subordinates to approve his $2000 expense payment without providing him any receipts. For this crime Coughlin was sentenced to 27 months of home confinement and a fine if $ 440 000 and 1500 hours of service towards the community.
The confidence level of Walmart leadership rises when the CEO became the next CEO as the organization was warned by next bribery case. In the ear 2012, a specific number of Walmart non-family shareholders vote against the re- election procedure of Mike Duke (Weiss 2014). They have also voted against the re-election procedure of other members including the former CEO Robert Walton. The people were against but this does not stop the members of the board in re-electing them but it proves to be a signal of disappointment and lack of confidence I the leadership process (Nygaard et al. 2015). This is because they have prevented the store from getting involved in the matter. For reassuring thee investors it is very much necessary for Walmart to demonstrate a renewed commitment by ensuring ethics and compliance standard of the company.
Walmart have faced many ethical issues in the year 2012, therefore in order to avoid such kind of situations in the company, Walmart follows some ways in order to minimize the situations that arises ethical issues (Collins 2015). Walmart is working in order to improve the ethical reputation of the company. In the year 2004, Walmart has formed its Global Ethics Office and helps in releasing a revised statement on Global Ethics (Mick 2015). The main intent of the Global Ethics Office is to spread a corporate ethical culture among the stakeholders of the company. It also helps in providing guidance and in making ethical decision.
The Global Ethical helpline is one of the confidential ways for the associates for contacting with the company in order to avoid ethical issues. The organization has an Ethical Standard Team for monitoring the obedience of the provider factories with the help of the company’s typical for contractors and local laws (Biong et al. 2015). Walmart claimed that in a shorter time period the organization have interviewed 1000 markets personnel of different countries and this is dedicated to $ 53 million of new processes and procedures. The organization is also providing ethical training to more than 19000 associates for avoiding as well as reducing the ethical issues.
Corporate Social Responsibility is a form of corporate self-regulation that is integrated into the business model. A business corporate social responsibility encompasses a huge number of tactics from giving away a portion of organization’s proceeding to charity in order to implement greener business operations (Barnett 2016). A Four type of CSR model contains economic responsibility, legal responsibility, ethical responsibility and philanthropic responsibility. The four models of the CSR are discussed below:
Economic Responsibility: This field is amply fulfilled by Walmart. The company is profitable as the total sales assemble in the year is $256.3 billion in the year 2004 (Hopkins 2012).Therefore, the foundation for all other different aspect of CSR is set well.
Legal Responsibility: Walmart has a rather poor showing in the area of legal responsibility. It is embroiled in number of different lawsuits and the organization has number of questionable practices (Elder and Dauvergne 2015). The organization is reputed due to low wages and discrimination. It is inevitable for Walmart to get sued by many parties on the same ground.
Figure 1: Diagram of Corporate Social Responsibility
(Source: Glavas 2016)
Ethical Responsibility: The ethical responsibility is partially met by Walmart. Walmart “Buy American” and “Environmental Awareness” are the best examples of company’s attempt at ethical responsibility (Vracheva et al. 2016). The employers of the organization are offered stock options in order to enable their share in the wealth of the organization.
Philanthropic Responsibility: In this section the organization has fared well. Walmart have huge number of corporate initiatives which includes college scholarship, fund raisers and many more (Prieto et al. 2014).It has established The “Walton Family Charitable Support Foundation” in order to provide facility of their philanthropy.
The greatest complainant about Walmart is that it puts other organizations or small companies out of business. The low price strategy of Walmart had created a difficult situation for small companies to compete in the market (Orlitzky 2015). The organization is often accused of being responsible for the downward pressure on salaries and benefits in areas where the company is located. Small organizations have filed lawsuits against Walmart, claiming that the organization uses predatory strategies and procedures in order to put other small companies or organizations out of business (Tian and Slocum 2016). In order to compete against Walmart, other companies have to reduce their wages. Studies revealed that the payroll wages including the wages offered by the company is reduced by 5 per cent after it enters the market of Walmart. Due to this, many citizens have refused to allow Walmart to take residence and this creates another social responsibility issue.
Walmart entry can be made detrimental to the environment of the company and its people that causes sprawl, traffic congestion and unwelcome changes to the landscapes. One of the greatest concerns that are associated with Walmart is the urban Sprawl. The construction of Walmart has taken acres of land and as a result the construction procedure created stress on the constructions of roads, parking and many more (Elder and Dauvergne 2015). There is a concern about the number of acres of land that is used for the construction purpose. The construction of Walmart has also created the problem of traffic congestion. The constructions have Walmart attract more number of customers towards the area creating traffic congestion in the areas (Vracheva et al. 2016). The resources used by the organization have also raised any environmental problems like pollution and excess use of resources. The organization is trying to compensate the damages by promoting green products.
The responsibility of Walmart towards their competitors is fair. The organizations have contributed greatly to the community by following the methods of volunteerism and donations. This has also increased the efforts of reducing the cost if the commuting by working with the help of the local government for improving the issues related with traffic (Orlitzky 2015). The organizations have promoted the use of green products that minimizes the use of non- renewable resources and also help s in reducing environment pollution. Therefore, Walmart is trying its best by becoming responsive towards the community where it enters.
The stakeholders key or the three attributes helps in identifying the groups of the stakeholders. The three attributes are as follows:
Power: It is defined as the power of the stakeholders for influencing the organization. For achieving the goals and objectives of the organization, customers are very much important. Without their support it is impossible to flourish the organization. The organization has provided products to the customers at lower prices by maintaining the quality of the products (Carter and Jayachandran 2012). This helps in influencing the customers more towards Walmart. The communication process between the organization and the customers are done in an ethical manner and as a result it will create a positive impact on the customers (Malhotra et al. 2013). The employees re treated well in Walmart by providing them facilities so that they will became loyal towards the organization. Business partners and suppliers of Walmart collaborate with other business organization properly in order to increase the interest of other company.
Figure 2: Diagram showing the attributes of stakeholders key
(Source: Martin 2015).
Legitimacy: The second attribute legitimacy helps in identifying the relationship and actions of the stakeholders in terms of properness and desirability. Legitimate power is also known as positional power. It is required in Walmart for exercising different activities in the organization. For positional power to be exercised effectively Walmart have associates or employees that wield it must have deemed to have earned it (Chekwa et al. 2014). In Walmart there are power structure and every employee of the organization having some power. The power flows towards the one who readily achieves it in the sense that a leader will exercise more power than the legitimate power by accepting additional acceptance (Ferrell and Fraedrich 2015). Walmart uses the legitimacy power in order to flourish its business and for achieving its goals and objectives. The organization uses various strategies and practices in order to use the attribute of legitimacy within Walmart.
Urgency: It is the requirement being set of any organization by stakeholders in terms of the criticality and time sensitivity. Walmart uses the methods of urgency in critical situations. Urgency of any organization is related with the people (Waller et al. 2015). It is comprised of two elements. The first element of urgency is criticality or how importance is it to that organization and person (Lukic 2013). Time sensitivity is known as the second element. Walmart uses the urgency attribute during two situations, either in the critical situations or at the time of sensitivity.
On the basis of analysis, the above three attributes are considered as the key of the stakeholders of Walmart. The organizations have created relationship with both the suppliers, customers and the employees of the organization. The stakeholders of Walmart have influences the strategic direction of the organization. Some of the stakeholders have created a positive impact on the organization (Chekwa et al. 2014). The organization uses information in order to guide decisions for achieving a satisfactory leadership position in the management of the stakeholders. Walmart aims at expanding and dominating the market for serving the goals of the employees.
It is very much necessary to have proper ethical communication as well as practices in organizations like Walmart. Ethics concern an individual’s moral judgement towards a decision. Ethical practices and behaviour means that Walmart must behave and communicate in an ethical way (Vanleer and Squires 2016). It is important for the organization as it provides number of advantages to them. It helps in attracting customers towards the product of Walmart, thereby increasing and boosting the profits of the organization. It makes the workers less stressed as they have received ethical environment for work which is very much beneficial for them (Nygaard et al. 2015). The leaders and the employees of Walmart who adhere the code of ethics will help in creating an environment that will be suitable.
It will be beneficial for both the customers and the employees of the organization. It helps in improving the morality among the employees of Walmart. It can also be helpful in increasing the productivity of Walmart (StankeviÄÂiÅ«tÄ— et al. 2012). For example: The ethics helpline implementation led the employees of the organization to communicate with the company’s ethical issues. This has helped in minimizing the number of cases that are ethical related. The Walmart ethical standard team helps in monitoring the compliance of supplier’s factories which has increased the production of the organization (Nygaard et al. 2015). Walmart has interviewed more than 10,000 employees in different countries for promoting proper ethical communication and practices in the organization that has increased the internal ethical issues in Walmart.
Walmart can adopt more strategies that would help the organization to be more ethical company in future. The recommendations include:
Passion: It is very much important for Walmart to adopt policy that would motivate the employees towards avoiding ethical issues in organization. Organizations like Walmart are comprised of number of people, it is very much necessary to excite them towards implementation of new strategies in organization so that they will provide extra effort towards Walmart.
Focus on Customers: Organization like Walmart must focus on the communication. The communication process between the customers and the organization must be done in a ethical way so that more number if customers get attracted towards the organization, thereby increasing the profitability of Walmart.
Implementation of new strategies: Walmart must re-implement or implement new strategies in order to avoid the ethical issues that it had faced. The organization must adopt strategies and practices that are ethically sound.
Result-oriented: Ethics matter a lot in the result of an organization. Walmart should not aim at the results at any cost. Results must be attained in the context of developing something that the customers need and producing and delivering products at cheaper prices. Walmart uses this practices but the organization needs to promote this strategy in such a way so that other small organization does not get out of business.
Risk Taking: Walmart must take risks for innovating new technologies and practices within the organization. The organization needs to use ethical innovative ideas for promoting new technologies and practices within the organization.
Conclusion
It is concluded that the main aim of Walmart is provide products and services at lower prices for saving the money of the customers. The organization uses sustainable methods in order to minimize the uses of non- renewable resources. It is analysed from the study that the organization have implemented certain strategies that have reduced the ethical issues,. Walmart uses ethical practices and way of communication for achieving its goals and objectives.
The main weakness of the study is that it does not illustrate the ways of avoiding the ethical issues and bribery in the organization. The strategies that were implemented in the organization minimize the ethical issues but in order to avoid them, Walmart needs to implement some necessary strategies.
References
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