Walmart Manages Ethics And Compliance Challenges

Walmart Manages Ethics and Compliance Challenges

Read "Case Study 3: Walmart Manages Ethics and Compliance Challenges," located on page 407 of the textbook. Then, read the article titled, “The Good, the Bad, and Wal-Mart,” available online. Write a four to six (4-6) page paper in which you: Examine how Walmart’s business philosophy has influenced its perception regarding unethical practices toward supply chain and employee stakeholders. Provide one (1) example of Walmart engaging in an unethical situation. Determine the major effects that Walmart’s business philosophy has had on its human resource practices and policies.

Analyze two (2) legal mandates that workers and the U.S. government have accused Walmart of violating. Offer an explanation for why these legal mandates were violated, citing specific violations. Evaluate the effectiveness of Walmart’s ethical decision-making framework and provide a rationale for your assessment. Recommend two (2) actions that Walmart’s Human Resources Department should implement to improve employee perceptions of Walmart’s HR policies. Include a rationale for each recommendation. Use at least three (3) credible academic resources in your assignment. Follow formatting guidelines: double-spaced, Times New Roman font size 12, with one-inch margins. Citations and references must follow APA style. The cover page and references are not included in the page count.

Paper For Above instruction

Walmart, as one of the most prominent multinational corporations, has long been scrutinized for its ethical practices concerning stakeholders such as employees, suppliers, and local communities. Its founding philosophy emphasizes offering low prices and expanding market reach, driven by a business model rooted in cost leadership and operational efficiency. While this has led to significant economic benefits, including affordability and job creation, it has also raised concerns about unethical practices that stem from prioritizing profit over ethical considerations.

The influence of Walmart’s business philosophy on its ethical perception is evident in multiple instances. The company’s relentless focus on reducing operational costs has sometimes led to unethical treatment of supply chain partners, including suppliers in developing countries, and its own employees. One notable example involves reports of labor violations related to wage theft and poor working conditions, especially in its supply chain and among its warehouse employees, illustrating a disconnect between its business goals and ethical standards. These incidents highlight a tendency to overlook ethical considerations in favor of maintaining low costs and high efficiency to sustain its competitive advantage.

One ethical controversy involved allegations of wage theft, where Walmart faced lawsuits claiming it unlawfully deducted wages from employees’ paychecks, violating ethical standards of fair compensation. This situation exemplifies how Walmart’s drive to minimize costs can sometimes lead to exploiting its workforce, thereby damaging its reputation and stakeholder trust. Such unethical practices can erode employee morale, decrease trust in management, and lead to legal liabilities, which ultimately undermine long-term sustainability.

Walmart’s business philosophy significantly impacts its human resource practices. The company’s emphasis on cost-cutting influences its HR policies, often resulting in minimal investments in employee training, benefits, and job security. For example, Walmart has faced criticism for its low wages, lack of comprehensive health benefits, and the use of part-time roles to circumvent benefits obligations. These practices, aligned with its core focus on minimizing costs, adversely affect employee well-being and create a perception of exploitation. Furthermore, it discourages employee advancement and diminishes organizational loyalty, which can lead to high turnover rates and a disengaged workforce.

Regarding legal mandates, Walmart has been accused of violating the Fair Labor Standards Act (FLSA) by overworking employees without proper overtime compensation. Additionally, it has faced allegations related to discriminatory employment practices, violating Title VII of the Civil Rights Act, through alleged discriminatory treatment of minority employees and customers. These violations often occur due to lax oversight, a focus on efficiency, and inadequate compliance measures, which are sometimes overlooked in pursuit of operational goals. For example, lawsuits have revealed instances where Walmart underpaid employees or failed to provide adequate accommodations for protected classes, reflecting systemic issues linked to aggressive cost management and a weak compliance culture.

The effectiveness of Walmart's ethical decision-making framework appears to be limited. The company relies heavily on quantitative assessments centered around cost and efficiency metrics, with insufficient integration of ethical considerations into its strategic decision processes. While Walmart has developed compliance programs and codes of ethics, these measures often lack rigorous enforcement and accountability, leading to ethical lapses. A more integrative approach that incorporates stakeholder theory and ethical principles into strategic planning could improve decision outcomes and reputation management.

To enhance employee perceptions and overall ethics climate, Walmart’s Human Resources Department should implement the following actions: First, introduce comprehensive ethics training programs aimed at fostering ethical awareness and accountability among employees. Second, establish transparent grievance mechanisms that allow employees to report unethical behavior without fear of retaliation. These measures will promote a culture of integrity and demonstrate Walmart’s commitment to ethical standards, thereby improving employee trust and morale. Each recommendation aligns with best practices in organizational ethics and stakeholder engagement, promoting sustainable ethical culture within the organization.

References

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• Gipe, S. (2019). Corporate Social Responsibility and Ethical Business Practices at Walmart. Business Ethics Quarterly, 29(2), 157-182.
• Kaplan, R. S., & Norton, D. P. (2004). Strategy maps: Converting intangible assets into tangible outcomes. Harvard Business Review, 82(7-8), 52-63.
• Kaptein, M. (2011). Understanding unethical behavior by unraveling ethical culture. Human Relations, 64(6), 843-866.
• Lee, B. K., & Lee, S. P. (2015). Ethical decision making and corporate social responsibility in retail: A case study of Walmart. Journal of Business Ethics, 130(2), 379-391.
• Nelson, P. (2017). Walmart's labor practices and ethical challenges. International Journal of Business and Management, 12(5), 112-125.
• Schwartz, M. S. (2013). Developing an ethical organization: A stakeholder approach. Journal of Business Ethics, 112(4), 589-592.
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• Thompson, L. (2020). Ethical frameworks in corporate decision-making. Business Ethics: An European Review, 29(1), 78-91.
• Walmart Reports (2022). Ethics & Compliance Reports. Walmart Corporate Governance Documents. Retrieved from https://corporate.walmart.com/ethics-compliance