Part One: Information on the Company Walmart
Walmart is one of the most successful retail companies in the United States and is the largest enterprise in the world that is tech-driven that began in the state of Arkansas. The company has very humble and unlikely beginnings in the state of Arkansas and has grown into one of the most influential organizations in mankind’s history. In addition to being the largest retail company across the globe, Walmart has also had an influence on the broader worldwide retail, as well as fast-moving consumer goods, commonly abbreviated (FMCG) industries that is immeasurable. As a result, as a company, Walmart has been able to reshape distribution across the globe. Currently, Walmart account for large amounts of the annual revenue earned by a significant number of the largest consumer goods suppliers across the globe (Roberts & Berg, 2012). The performance of the company can be attributed to various factors such as the human resource posture, as well as its vision, mission, and set goals.
At Walmart, the fundamental principles guiding its performance and operations are founded within the mission and vision statements. The corporate mission at Walmart Inc. is “to save people money so they can live better.” The statement is a reflection of the Company founder, Sam Walton's ideals. The mission statement is also a reflection of the company's performance as it is the basis upon which strategic decision making is conducted. The corporate slogan, “Save money. Live better” is synonymous to the Company mission at Walmart, showing its strategy of using competitive pricing to attract its customers. The initial vision statement at Walmart was “To be the best retailer in the hearts and minds of consumers and employees.” However, it was changed to "Be THE destination for customers to save money, no matter how they want to shop.” The success of the retail Guru is reflected in the significant observations made by the company, which are reflected in changes such as that of its vision. Overall, the company vision and mission statements are a reflection of what the company has been doing in order to establish the success it currently has as well as what it seeks to achieve in the future.
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At Walmart, the culture of integrity is among the ways in which the company depicts its observation of global ethics, thus the Company’s ethical culture. The company has alongside developing and upholding company policies on ethical, raised awareness of ethics policies. Similarly, the company provides a platform where its stakeholders can address issues of ethics within the organization. Among the manner in which ethical culture is evident at Walmart is based on some of the ethics policies set by the multinational retailer. One of the global ethics practiced as the Company’s ethical culture is serving as a guide and resource with regards to ethical decision making (Walmart, 2017). At Walmart, there is the provision of a confidential and anonymous reporting system, thus the feasibility of the company’s ethical culture. Similarly, the ethical culture at Walmart is characterized by leading in ethics education and communication system that is continuous. At Walmart, the employees continuously undergo education sessions on ethics and ethical conduct, thus promoting an environment in which ethics are practiced regularly (Walmart, 2017). Among the programmes at Walmart developed to promote ethics in the organization is the Integrity in Action Award program. The program recognizes associates who demonstrate integrity and uphold ethics within the organization, which has been ultimately reflected in the company’s performance.
The Company displays social responsibility in a number of ways with its main attribute being that of providing employment opportunities. Walmart is one of the largest employers not only within the retail industry in the United States but also across the globe. Therefore, by providing numerous employment opportunities, Walmart contributes to the wellness of those employees, as well as their families, thus displaying social responsibility (Prieto, Phipps & Addae, 2014). Similarly, the company displays social responsibility in the manner in which it treats its employees as assets, thus has ensured it creates a conducive environment in which the employees work. For instance, since 2015 up to date, employees can dress casually in denim, making them very comfortable at work.
Owing to the nature of Walmart’s operations, locations as well as commodities sold, it has a wide range of customers as anyone can shop at Walmart, whether in wholesale or retail. Walmart provides retailing service, which enables it to have a variety of commodities that it sells to consumers across its nationwide and international branches. Other services provided by Walmart include money transfers, check printing, a trade-in program, a Walmart protection plan, as well as photo services. Some of the internal trends that are likely to influence Walmart’s performance include employee development, incorporation of technology, as well as benefits and compensations (Walmart, 2017). Among the external trends that are likely to influence Walmart’s performance include comparator competitive positioning, technology, as well as changes in taste and preferences of consumers.
Internal trends can be manipulated in a manner that promotes the excellent performance of the company. For instance, employee development promotes the improvement of employee performance, thus increasing productivity and profitability. On the other hand, external trends can influence a company’s performance negatively or positively depending on how the organization approaches the trends. For instance, if Walmart’s competition achieves a better competitive position, it is likely to negatively influence the performance of Walmart. The leading aspect at Walmart with regards to leadership is centered on price leadership (Holzer & Schwester, 2015). Walmart has some of the lowest prices for its services and commodities making it a favorite among many Americans.
Part Two: Addressing Unsustainable Sourcing in Wal-Mart
When carrying out an ethical analysis of Wal-Mart, especially in its business practices, one key area that is a problematic source is sourcing. Considering that the company is a leading brand in the United States and stocks a high volume of commodities across its outlets, sourcing plays a major role for Wal-Mart. However, on numerous occasions the company has failed to uphold proper standards, leading it to be accused of unsustainable sourcing practice. The literature on the subject matter, such as (Manner-Bell, 2017), identify the importance of establishing a strong Supply Chain Ethics (SEC) in organizations, especially in the retail sector. Doing so has an overall impact on the corporate ethics standards of the select organization. This, then shows the critical importance of supply chain ethics as well as why it would be an important concern if a negative issue is raised under this category.
Further discussing the issue of Wal-Mart and Unsustainable sourcing practices, several events have taken place that shows the organizations as being culpable of these claims. A source that extensively highlights the numerous instances in which the company has demonstrated unsustainable sourcing practices is (Chen, 2015). Several events in which the company, showed poor practices including, resource straining, human resource discriminatory practices, and unfair labor practices among others are extensively discussed by (Chen, 2015). The main reason discussed that seems to be contributing to the problem of unsustainable sourcing is that of its main market strategy price leadership, which aims at cutting cost, using any means possible. Therefore, there is a strong viability that this issue can be viewed as a major ethical concern for the big retailer. Various stakeholders are affected by the companies supply chains, such as farmers, manufacturers, labor union, workers (both local and foreign) among others, thus showing the importance of addressing this concern.
Another important aspect to also analyze is the financial implications of the event or ethical issue on the company. A close analysis of the company’s financial performance, before and after the highlighted events of unsustainable sourcing, show that they have not had a major impact on Wal-Mart. The company has maintained the consistent growth of their profits for the last decade as derived from their financial statements (Wal-Mart, 2017). This demonstrates that while they have encountered the issue of un-ethical sourcing practices, it has not affected their financial performance. In response to the raised issue concerning unsustainable sourcing, the company drafted standards for supplier manual in order to institute ethical sourcing in its supply chain. The manual stipulates the requirements that suppliers must uphold in order for their products to be stocked in Wal-Marts outlets. Thus, it could be seen that they have sought to rectify the problem of unsustainable practice.
There are several questions that are raised by the issue of unsustainable sourcing having taken place in Wal-Mart. In particular, the main challenge lies in whether the company can find a proper balance between its low-cost approach and sustainable sourcing. It employs aggressive tactics in its sourcing in order to be able to acquire and sell goods at low prices. However, as highlighted in the above, this approach has major ethical implications for numerous stakeholders, which are mostly negative. Therefore, a key question is to how to balance these two factors in order for all stakeholders to benefit. It also poses a key issue on whether companies should consider the key implications of their operational strategy regarding ethical practices and standards. For instance, on this issue, Wal-Mart is highly dependent on aggressive sourcing approaches to maintaining its price leadership (Kaelberer, 2017). Thus, changing the approach could have implications for its financial performance. These are some of the questions that are raised by the issue of unsustainable sourcing practices by the company.
Concerning how the company might have handled the situation differently, a possible viable approach would simply be taking a collaborative approach with its suppliers to identify methods that can be used to lower costs (Teller, Kotzab, Grant, & Holweg, 2016). For instance, in the case of trying to lower production costs for supplier’s Wal-mart can be involved directly in aspects such as packaging as well as transportation. Additionally, enhanced stock level management, especially when it comes to stock replenishment could be another approach that the company can use. Overall, increased collaboration between the company and its suppliers could help address the ethical issue of the company being accused of unsustainable sourcing. This approach will lead to more dialogue and aid suppliers raise concerns as well as solutions concerning this problem.
Finally, it is important to go ahead and discuss, the possible lessons that managers can learn from such events. Concerning the issue of Wal-Mart, it is important for their managers to understand that their corporate strategy could have key ethical implications especially since there is increasing scrutiny on the issue. It is important that they highlight the instances in which key ethical supply chain standards were faulted by the company in its overall objective of being a cost leader. Thus, approaches that do not lead to adverse outcomes for their suppliers must be instituted as alternatives so that both good supplier relationships are established. Thus, managers must learn the important link between strategy and outcomes. Additionally, they must learn to revise business strategy, in order to forecast its outcomes regarding ethical standards. Doing so will prevent future business strategies from yielding negative outcomes such as those that have been discussed above.
References
Chen, M. (2015, June 5). Here are all the Reasons Wal-mart’s Business is not Sustainable. The nation . Retrieved September 8, 2018, from https://www.thenation.com/article/here-are-all-reasons-walmarts-business-not-sustainable/
Holzer, M., & Schwester, R. W. (2015). Public administration: An introduction . Routledge.
Kaelberer, M. (2017). Wal-Mart goes to Germany: Culture, institutions, and the limits of globalization. German Politics and Society , 35 (1), 1-18.
Manners-Bell, J., (2017). Supply Chain Ethics: Using CSR and Sustainability for Competitive advantage. Kogan Page.
Prieto, L. C., Phipps, S. T., & Addae, I. Y. (2014). Is Wal-Mart a social enterprise? An exploration of the relationship between corporate reputation, corporate social responsibility & financial performance. Academy of Strategic Management Journal , 13 (2), 51.
Roberts, B., & Berg, N. (2012). Walmart: Key insights and practical lessons from the world's largest retailer . Kogan Page Publishers.
Teller, C., Kotzab, H., Grant, D. B., & Holweg, C. (2016). The importance of key supplier relationship management in supply chains. International Journal of Retail & Distribution Management , 44 (2), 109-123.
Wal-Mart (2017). Ethics & Integrity. Wal-Mart . Retrieved September 8, 2018, from https://corporate.walmart.com/our-story/ethics-integrity
Wal-Mart (2017). Financial Information. Wal-Mart . Retrieved September 8, 2018, from http://stock.walmart.com/investors/financial-information/annual-reports-and-proxies/default.aspx
Wal-Mart (2017). Services. Wal-Mart . Retrieved September 8, 2018, from https://www.walmart.com/cp/walmart-services/6163033
