Research Paper On Walmart

Submitted By jillfreeland
Words: 512
Pages: 3

1-4 Ethics and Business Paper In the Spring 2012 it came to light that Wal-Mart paid about $24 million in illegal payments (ie bribes) to expedite the opening of stores in Mexico. While in some countries and cultures, such payments may just be the way business is done; it is still illegal. The Foreign Corrupt Practices Act (FCPA) allows the Justice Department and SEC investigators to charge a US Company for bribing overseas officials. It does create a real dilemma for the company that wants to do the right thing but yet compete on a “level” playing field. (Brown, 2012) Wal-Mart management in Mexico was surely under extreme pressure to get the stores up and running. If those store’s sales were forecast in the “numbers” given to Wall Street, failure to hit the mark would likely have a negative impact on the company’s stock price. Taking the moral high-ground is often not easy; especially when, as noted above – “everyone is doing it!” An alternative might have been to provide “legal” incentives in construction contracts for beating completion deadlines. With as big as Wal-Mart is and the weight it generally throws around with vendors, one would think they could exert similar pressure if some low-level government official has their hand out. After all, not only is Wal-Mart the largest retailer in the world but they are the largest private employer in Mexico. (Brown, 2012) While in the short-run, getting the new stores opened, at any cost, may have seemed like a prudent business decision; it is anticipated that Wal-Mart could be hit with a $4.5 Billion penalty and when the news became public its share price was down by 4.7%. But therein lies the rub. The bad behavior only has temporary consequences and the capital markets have a short memory. I am afraid some businesses may weigh the cost/benefit of unethical behavior