Describe about the Ethics For Managers for Wal Marts Sustainable Marketing.
1. In our opinion, Wal-Mart is doing enough to become more sustainable. From our research studies, we found that Wal-Mart carries out diverse, sustainable activities, with the aim of fulfilling the needs of its consumers, employees and the society at large. Wal-Mart is one of the leading American retail stores offers quality products at low prices. It also aims to provide sustainable and safe food items(Barnett, 2014).It gives priority to their consumers by providing home delivery services, taking orders online and maintaining relations with their consumers by different means. For example Wal-Mart follows the tradition of listening, by communicating with their consumers through social media sites like Instagram, Facebook etc. Wal-Mart does take action to improve the overall quality of their products considering feedbacks of their consumers and associates posted on such websites.
Wal-Mart considers its employees as an asset and so it provides them diverse facilities for up surging their satisfaction level. It supports its employees to develop their skills through training and skill development. We have found from our research that in last two years, Wal-Mart have invested almost $2.7 billion to provide training and education to their employees (Dodds, ,2015). It does provide scholarships to their associates for carrying out their studies while working. It aims at securing the future of their employees and so it provides the facilities like pension funds, insurance, retirement fund, medical compensation etc. Employees at Wal-Mart are trained to use latest technologies to make their work simple and agile. It does provide financial benefits to motivate and encourage their employees by offering discounts. For example Employees at Wal-Mart offers discount cards to their employees to get 10% discounts on fresh fruits and vegetables. Above all, it maintains healthy working culture in the firm by respecting their traditional values and cultures.
Wal-Mart does consider its responsibility towards the society. It has adopted zero waste policy to make the efficient use of resources and to protect the environment. For example Nowadays Wal-Mart has started charging for one time use poly bags to encourage their consumers to make use of reusable bags. Studies showed that Wal-Mart was able to reduce poly bags waste up to 38% by the end of 2013. Wal-Mart follows three R’s of sustainability, i.e. Recycle, Repurpose, Reuse and Rethink, which helps in fulfilling its responsibility towards the environment. In addition to it, it does invest in diverse social welfare activities (Ghemawat. & Mark, 2006).
2. Wal-Mart’s have to suffer due to several unethical activities such as encouraging child labor, avoiding pregnant women, poor working conditions, lower wages, etc. Wal-Mart’s creditability was affected by indulging in above unethical activities. About fifty percent of Wal-Mart products are produced in foreign countries to cutoff the costs of its products. It does encourage child labor in underdeveloped countries like Bangladesh for reducing its wage expenses. Apart from it, the company provides poor working conditions to their employees in underdeveloped countries. For example, in 2012 almost 111 people were killed in Wal-Mart factory due to fire, which have affected the credibility of the firm to a great extent. It was also found that it offers the monthly wage of just $37 to its employees in Bangladesh (Jensen, 2000).
In Wal-Mart, gender discrimination is found among employees. And so lower wages are paid to women employees and pregnant women are fired for no reason. Many lawsuits have been filed by the women employees of Wal-Mart, but conditions haven’t changed yet. Research shows that 57% of its workforce are women, but still women are forced to work at lower wages. It also forces its employees to work during meal breaks, which is quite unethical. In addition to it, in 2012 the company has cut down health insurance for their part time workers. These types of activities have discouraged many women employees and reduced their work satisfaction level.
In our research, we found that Wal-Mart have failed to fulfil its responsibility towards its employees working in Bangladesh. It haven’t even compensated to the relatives of the people killed due to fire in Tazreen factory of Bangladesh. Instead of compensating, Wal-Mart announced that Tazreen as an unauthorized brand of the company and they are not responsible for compensation.
While researching, we also found that the Wal-Mart hasn’t taken any action to improve the women’s position in the company. Women’s are still forced to work at lower wages and poor working conditions. Gender discrimination is also considered during promotions. The Company is forced to change its policy for pregnant women position by the Government due to lawsuits filed by its pregnant employees. Though the company have made several efforts to improve the working conditions of its employees, but it is not able to up surge the satisfaction level among employees. So we can Wal-Mart doesn’t value the precious assets of the company i.e employees.
3. Wal-Mart does follow CSR model to fulfil diverse responsibility of the society. Basically the CSR model divided corporate social responsibility into four parts. They are Philanthropic responsibilities, Economic responsibilities, ethical responsibilities and legal responsibilities. Philanthropic responsibilities are the humanitarian responsibilities of the companies towards its community. Wal-Mart has been generously investing time and money for the welfare of the local communities for many years (Kampf, 2007) It had contributed 11 non-profit organizations by donating certain percentage of its profits. It is also providing scholarships to students for availing higher education in U S. Wal-Mart is able to fulfil its economic responsibilities by providing high quality products at low prices to its consumers.
Ethics are basically concerned with what is right and wrong. And so we can say they are basically the principles of the company, which need to be fulfilled. In case of Wal-Mart, it has failed to fulfil its ethical responsibilities because numerous unethical activities such are child labor, gender discrimination, wage theft etc. are carried out by the company. It has affected the credibility of the firm to a large extent. So it becomes essential for the firm to restrict such unethical activities in the firm by taking several actions. Wal-Mart does comply with the legal restrictions imposed by the local government and there by fulfil its legal responsibilities.
From diverse researches, we found that Wal-Mart is ignoring its social responsibilities towards several communities. For example, Wal-Mart sells its products at low costs compare to small merchants. Because of it, these merchants are also forced to sell their products either at lower profit or no profits. So it is essential for the firm, to revise its pricing policies for fulfilling its responsibilities towards such communities. Apart from it, traffic congestion is quite common near Wal-Mart stores. So it is essential for the firm to take actions to reduce traffic problems near its stores. This can be done by appointing man force for managing the traffic near the stores. Wal-Mart has some responsibilities towards the environment and so it should make efforts to reduce pollution in the environment. Through research, we have found that nowadays Wal-Mart have adopted no waste policy and have encouraged their consumer to re-use the poly bags and bottle by charging extra. This is an appreciable effort by Wal-Mart.
4. Mitchell et al’s (1997) have discussed the three key variables or attributes of stakeholders. They are power, legitimacy and urgency. Power designates the extent to which stakeholder can influence the decisions of the firm. Usually power of any company can be obtained by materialistic or normative means. Legitimacy indicates the firm’s relations with the stakeholders. It indicates that the actions of the entity are appropriate according to the standards, principles or norms followed by the firm. Urgency is referred as the tenacity. It indicates the degree to which stakeholder claims are required immediate actions. It depends upon the time factor and stakeholder relationships with the company.
By considering the above three variable such as power, legitimacy and urgency, it is possible for firms to identify which stakeholders that should be given more importance. Basically, Wal-Mart does make use of the above variables to identify different types of stakeholders of the firm. There are seven different types of stakeholders, they are Dormant stakeholders, Dominant stakeholders, Demanding stakeholders, Dangerous stakeholders, Discretionary stakeholders, Definitive stakeholders and dependent stakeholders. After analysing different types of stakeholders, stakeholders are further analysed into a latent, expectant and high categories on the basis of priorities. Latent stakeholders are given least importance in the management of the firm. Expectant stakeholders are given moderate priority by the management of the firm. Lastly, high stakeholders are given the highest priorities by the firm (The World Bank,2015).
Diverse decisions of Wal-Mart is influenced by its stakeholders. Diverse Stakeholders of Wal-Mart are investors, suppliers, consumers and employers. Among them investors of the company is given the highest priority by the management of Wal-Mart. The main reason behind it is that without investors, it is impossible for the firm to carry out its business. They are interested in maximizing profits and so Wal-Mart make efforts to up surge the overall revenues of the firm.
Consumers and employees are considered as the expectant stakeholders of the firm. Consumer needs of Wal-Mart is usually satisfied by providing high quality products and services at low prices. In case of employees, satisfaction level among the employees is increased through motivation, encouragement, promotions, etc. Apart from it, employees work efficiency is increased by giving proper training. Above all, it provides job security to encourage their employees.
5. It is quite essential for the company like Wal-Mart to be ethical in its communication and practice. Ethics are basically the principle or norms formed by the firm to carry out its business activities in an ethical manner. Firms usually provide training to their employees to maintain an ethical behavior in an organization. In case of Wal-Mart, it has been in involved in numerous unethical activities such as child labor, gender discrimination, wage theft. In addition to it, it discourages its employees by forcing them to work in poor working conditions. Even age group discrimination is also found in Wal-Mart. Many employees of Wal-Mart has sent lawsuits to the company for such unethical activities. It is also criticized by the media for its unethical activities. Even today, the company is male-dominant and promotions are considering gender and age group discrimination. It doesn’t ensure the safety of its employees. For example, in case of fire accidents in Bangladesh, instead of helping and compensating the relatives of dead employees, firm had back out from its responsibilities by announcing it as unauthorized brand. It was found that about 111 people were killed in that incident due to the negligence of the firm. Above all, Wal-Mart has also failed to fulfil its responsibilities towards small communities.
It is essential for Wal-Mart to grow as an ethical company in future by fulfilling its responsibilities towards the consumers, employees and the society at large. It should make efforts to restrict child labor at its developing countries units. It should also try to up surge the satisfaction level among employees by providing proper training and providing better working conditions. Apart from it, it should try to reduce corruption, gender and age discrimination in the company. It should also take some actions to empower women’s position in their company. It should try to maintain equality in the firm. It should also try to fulfil its responsibility towards the society by providing scholarships and donations to the non-profit organizations. It can also maintain health relations with its stakeholders through social media and mobile applications like whtsapp, snapchat etc. Consumers should be a priority for Wal-Mart and so firm should check the quality of its products before selling it. It should also revise its pricing policies for benefitting small communities. Last but not the least, firm should also make effort to increase the security of its employees ( Lazonick, William& Sullivan Lazonick,2010).
References
Corporate.walmart.com. (2016). Walmart Corporate – We save people money so they can live better.. [online] Available at: https://corporate.walmart.com/ [Accessed 9 Sep. 2016].
Barnett, M. L. (2014). Why stakeholders ignore firm misconduct a cognitive view. Journal of Management, 40(3), 676-702.
Dodds, F. (2015). Multi-stakeholder partnerships: Making them work for the Post-2015 Development Agenda. United Nations.
Ghemawat, P., & Mark, K. A. (2006). The Real Wal-Mart Effect. Harvard Business School.
Jensen, M. C. (2000). Value Maximization and Stakeholder Theory. Harvard Business School.
Kampf, C. (2007). Corporate social responsibility: WalMart, Maersk and the cultural bounds of representation in corporate web sites. Corporate Communications: An International Journal, 12(1), 41-57.
Masouros, Pavlos E., “Corporate Law and Economic Stagnation: How Shareholder Value and Short-termism Contribute to the Decline of the Western Economies” Eleven International Publishing. pp. 6-9
The World Bank (2015). What is Stakeholder Analysis?
U.S. Department of Commerce (2015). The Retail Services Industry in the United States.
Wal-Mart Stores, Inc. (2014). Walmart CEO Outlines Growth Strategy at Annual Meeting for the Investment Community.
Lazonick, William; Mary O’Sullivan (2010). “Maximizing shareholder value: a new ideology for corporate governance”. Economy and Society. 29 (1): 13–35.
Wal-Mart Stores, Inc. (2015). Walmart Form 10-K, 2015.
Wal-Mart Stores, Inc. (2015). Walmart Human Resources.
Wal-Mart Stores, Inc. (2015). Walmart’s Official E-commerce Website.
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