Walmart was established in 1962 by Sam Walton in Arkansas. Throughout the years, the company has expanded to the international space and now operates in 28 countries globally. The company's success is attributed to the low prices that make it difficult for other organizations to compete. Despite its success, Walmart has had to deal with many ethical issues involving its stakeholders and shareholders. This paper seeks to evaluate how Walmart manages ethical and social responsibility issues and its contribution to enhancing the social and economic wellbeing of the society.
How Walmart is Managing Ethics and Social Responsibility as one of the Largest Corporations in the World
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At the moment, Walmart is seeking to improve its ethical reputation, social responsibility, and corporate governance activities. In 2004, Walmart created the Global Ethics Office that sought to enhance an ethical culture within its establishments. The office also directs stakeholders on making ethical decisions in their business activities (Case 7: Walmart juggles risks and rewards). The helpline offers an anonymous platform where employees can contact the organization regarding ethical issues. The organization also created an Ethical Standards Team that seeks to assess the organizations' compliance with the company standards and local laws.
Besides, the organization instigated various measures in response to the bribery scandal, such as making an overhaul of its global compliance program, creating a compliance training program, improving the communication channels, establishing ethics and compliance committees, and committing to a bribery free culture. Additionally, the organization adopted an anti-corruption compliance standards program to prevent any future misconduct (Case 7: Walmart juggles risks and rewards). Walmart is also involved in disaster management projects and economic empowerment among women. For example, the organization partnered with other organizations in offering bottled water to the people of Flint, Michigan, when the drinking water was contaminated with lead. Walmart has also partnered with other organizations in offering poor women survival skills that enhance their economic status.
Various Ethical Issues Walmart has Faced and how the Company Responded to Stakeholders
Walmart has received criticism for offering low compensation and benefits packages to its workers. The company responded in 2006 by raising employee wages based on performance. The organization also improved its health benefits package (Case 7: Walmart juggles risks and rewards). Walmart also received negative publicity by decreasing the workforce after increasing the number of stores causing consumer dissatisfaction. In response, Walmart raised the minimum wage to 9-10 dollars per hour across the US.
Walmart has also been accused of providing poor working conditions and facilitating discrimination in its stores. For example, in December 2005, Walmart was sued by 100, 000 employees in California since they were denied meal breaks, rest breaks, and overtime. Similar accusations were leveled against Walmart in other states leading to the payment of 640 million dollars to 63 complainants.
Walmart has also been accused of enforcing gender discrimination against women. For example, while women account for about 2/3 of all the Walmart employees, less than 10 percent of them are included in the management. Besides, the company pays female employees less compensation as compared to men in the same positions. In 2004, a San Francisco judge granted a class action lawsuit to 1.6 million female employees based on pay, promotion, training, and job assignments (Hart, 2006). Just like other class action lawsuits, the case demanded that the defendant take responsibility for enhancing cultural stereotypes in the workplace. However, Walmart argued that any discrimination on promotions occurred in specific stores; hence the whole organization could not be held liable for unethical behavior.
Walmart’s Contributions to Improving the Wellbeing of Consumers and the Economic Sustainability of the Society
Walmart has been involved in sustainability initiatives across the world. Walmart’s long-term sustainability goals include using renewable energy, creating no waste, and selling sustainable products. Currently, Walmart has invested in renewable energy projects. Further, the organization has enhanced energy conservation by managing its heating and cooling systems and controlling temperature in its stores. Besides, following the bribery allegations leveled against the organization, Walmart replaced many top executives in Mexico and the United States (Case 7: Walmart juggles risks and rewards). Walmart is also involved in corporate social responsibility (CSR) activities. For example, the organization has invested about 100 million dollars in helping employees advance in their careers and train farmers who supply their products to the company (Macri, 2018). The organization is also committed to addressing issues concerning human trafficking and unfair labor practices in the supply chain. Engaging in CSR initiatives has enabled Walmart to maintain a positive brand image and reputation.
Conclusion
With an estimated 2.3 million employees, Walmart is arguably the largest employer in the US. Over the years, the company has evolved from a small store in Arkansas to the multinational company it is today. Some of the ethical issues the company has had to deal with include paying low wages and minimal benefits to employees and providing poor working conditions, and promoting gender discrimination in the workplace. Despite these setbacks, Walmart has invested in CSR initiatives such as advancing employee careers, training farmers, using renewable energy sources, selling sustainable products, addressing human trafficking and unfair labor practices.
References
Case 7: Walmart juggles risks and rewards. Pp. 398-411
Hart, M. (2006). Learning from Walmart. Employee Rights and Employment Policy Journal. 10: 355- 394
Macri, K. P. (April 25, 2018). Walmart’s improved social responsibility efforts begin with supply chain. Supply Chain Dive. https://www.supplychaindive.com/news/walmart-corporate-social-responsibility-efforts/521961/
