Founded back in 1962 by an innovative businessman from Arkansas called Sam Walton, Wal-Mart Company is an incorporation that has got business ventures both in America and overseas. The Wal-Mart Company ventures into departmental stores and warehouses. Wal-Mart Company is renowned for its pocket-friendly prices, its opposing footing on unions, little salaries, mighty expansion and forceful purchase demands onto the supplies although the company’s management has greatly refuted and brushed off the claims as critics, defending itself as using union contracts when employing. The Wal-Mart Company is managed under three ethical principles namely: responsive principle, fairness principle and transparency principle (Fisherman 2006).
The Responsive Ethical Principle
The Wal-Mart Company has exhibited this ethical principle in the way it has responded and proved the wrong the claims that have been hurtled in its direction by some critics. When the critics castigate it for its low prices, the company management has refuted the claims as baseless and instead claimed that the Wal-Mart company is known far and wide in for nits tendency to go through the EDLP, the initials of Everyday Low Prices and that it reinstates sales that are made weekly with the steady and stumpy prices on quite a number of their items. Yet, the Wal-Mart company doesn’t undersell its business rivals (Hemphill 2008).This can be proved as in the way the Mexican Attorney General that is concerned with the consumers’ affairs traces lots of items’ prices. The Wal-Mart Company has also refuted claims that it pays its employees low earnings. If the word of the company is anything to go by, the company pays a constant wage to its employees or wages that are slightly higher in the case of some employees. When defending its stand upon claims that it opposes unions, the company management voiced out that he had carried out a surveillance of other companies that offer the same services as that of the Wal-Mart and deduced that compared to them, the union coverage in the Wal-Mart was at least.
Whilst responding to the “aggressive expansion” critic, the management said that the business rivalry tactics was based on the range of the company and that the company wanted to solver the riddle and the agony that the company endured when shopping and that it cannot be com pared to other grocery stores that only gravitate in particular areas but the Wal-Mart company being present in other more than fourteen countries (Tilly 2007).Though the Wal-Mart company doesn’t have a complaint handling policy, it posses a Statement of Ethics that delineate its whistleblower strategies, and it involves confidentiality, independence of investigators and non-retaliation.
The Fairness Principle
The management of the company has said that its working elite there are workers’ unions that dominate in the most of the places that it holds a footing like Mexico, Brazil among others (Marios 2006).The company also says that it offers fairer wages when their payment strategies are held in comparison to its business rivals that are of its caliber. Also, it claims that when compared to other international departmental chains, it slots way long behind them. The company also says that it eyes the middle class and thus doesn’t set low prices on the price tags of their items. Also the management of the Wal-Mart doesn’t depict the ugly slur of gender prejudice as reports from a reliable source, United States Department of Labor, an article that was released on May 2005, showed that the women were found to have been at helm of the company in various fields that ranged from managerial positions to other professional positions. Statistics were also dug and that showed that the percentage incomes of women from 1979 to 2004 had increased by 18 % and thus women were not marginalized whatsoever.”…since Wal-Mart is now going global, it is the opinion of the authors that the first strategy it needs to utilize is the promotion of women in the United States before going global…committed to the inclusion of women who are a vital component” (Spangler 2008).
Transparency principle at Wal-Mart
Transparency principle is majorly where information about a particular organization is shared openly to the public. It is a crucial principle especially to Wal-Mart which is an organization used by people world wide (Hemphill 2008). This principle provides that the activities of an organization should be clear to the whole population directly and indirectly associated with it. Transparency principle can be used to explain that Wal-Mart does not do well according to this principle. In terms of transparency, Wal-Mart is very poor since it has been found to lack an information disclosure policy.
It has been ranked the ninth among the ten corporations/organizations which were assessed on transparency (OWT Charity No. 210180 2007). For their transparency capability, they had a score of fifteen percent. Although is has a commitment to transparency in its statement of ethics, this has been found just like a theory but very little have been put in to practice. Its transparency is just in papers and reports but does not go beyond that. In this statement of ethics, it states that it will have accurate and fair transparency with its information but this has been found not to happen practically. This is seen in reports to Security and exchange Commission (SEC) and when making public presentations. This means that in terms of transparency, Wal-Mart is not doing too well. For transparency to be effective, Wal-Mart must commit itself to being transparent in all its activities and operations (OWT Charity No. 210180 2007). For the company to be considered as one which does well in terms of transparency, it should devise a transparency policy which should state vividly how, what and when information will be made available. The transparency policy should have principles of good practice in which a commitment to respond to all information requested at a specific time. Due to lack of this transparency policy, the organization is said not to do well according to the transparency principle.
Wal-Mart only aspires to have an information disclosure policy in its statement but literally, it does not have any. Not only to the public has information dissemination at Wal-Mart been an issue even among those working for the company. It has been discovered that most of Wal-Mart employees do not know what happens in the company (OWT Charity No. 210180 2007). There has been a lot of criticism to Wal-Mart due to its lack of transparency. Transparency at Wal-Mart lacks when it is dealing with the public, the news media and even with the employees. Some of Wal-Mart’s internal documents and court fillings have leaked to the public. These documents and fillings have been able to reveal more information than what Wal-Mart has revealed to the public. Some of this information was new to every body even the internal employees (OWT Charity No. 210180 2007). There have been so many shareholder resolutions aimed at addressing transparency issues affecting Wal-Mart. Another warning is given by Wal-Mart Watch which advises the company to improve its transparency on business practices it carries out together with its corporate policies.
As an evidence that Wal-Mart is not doing well in its transparency principle, Lee Scotts in his speech promises that the company will try and be more transparent especially when it comes to matters of product sourcing (Bavaria 2005). He advises that for Wal-Mart to avoid its criticism, it has to be more transparent. The company needs to join other companies who can assist in developing transparency systems. It can also improve transparency by adopting the global reporting initiative (GRI) (Bavaria 2005). All these arguments, criticisms and recommendations are a clear indication that Wal-Mart is not doing well in terms of transparency.
Out of the three principles there are those which do well at Wal-Mart and others which do not do well. The responsive principle has been found to do well. Despite the fact the company lacks a policy to be used for handling complaints; it has succeeded in this part. It has good principles like assurance of confidentiality, and a clear description of how a complaint will be investigated. It has been found to be responsive to the public by all the actions which are taking place in the company. Incase a complaint is raised concerning the company; time will be taken just to ensure that if there if any mistake, it is corrected. Another issue which has been done well at Wal-Mart is fairness principle. In the past, there were a lot of complaints about gender inequality and unfairness in compensation and wages. This is one issue which has been tackled to ensure fairness. Health issues have also been tackled. The principle which is not doing well at Wal-Mart is transparency principle. The company does not have a transparency policy showing how information about the company will be disseminated. The transparency problem is affecting even the employees. The company has been advised to come up with a policy which can help to solve the transparency problems affecting the company in order to avoid criticism.
Bavaria, J, 2005, Wal-Mart: Twenty-First Century Leadership, viewed on May 24, 2011 from http://www.globalreporting.org/nr/rdonlyres/f282cf5d-66d2-4b98-9491-b7cc264e7895/0/bavariawalmartleadershippdf.pdf
Ferrell O, 2008, Marketing Strategy, Connecticut: Cengage Learning
Fisherman, C, 2006, The Wal-Mart Effect and a Decent Society: Who Knew Shopping Was So Important? Journal Article, Vol 20, No 3, pg. 6-25.
Freeman E. 2007. Managing For Stakeholders: Survival, Reputation And Success. Connecticut: Yale University Press.
Hemphill, T, 2008, Demonising Wal-Mart: What Does the Facts Tell us, The Journal of Corporate Citizen ship, Iss 31, pg. 26
Marios, K, 2006, Strategic Management: Global Culture Perspectives for Profit And Non-Profit Organizations. Oxford: ButterWorth-Heinneman.
OWT Charity No. 210180, 2007, Wal-Mart Corporation: Organization Information
Spangler, M, 2008, Wal-Mart and Women: Good Business Practice or Gamesmanship, The Journal of Applied Management and Entrepreneurship, Vol 13, No. 2
Tilly, C, 2007, Wal-Mart and its Workers: Not the same All Over the World, Journal Article, Vol 39, No. 4
Zelizer, V, 2011, Ethics in the Economy, viewed on May 24, 2011 from http://www.princeton.edu/~vzelizer/zfwu_1_07_Zelizer.pdf