Walmart Manages Ethics and Compliance Challenges
Kimberly D. Nash
Professor James Ziegler
Ethics and Advocacy for HR Pros
April 26, 2015
Wal-Mart prides itself on having one of the strictest and most stringent ethics policies in the industry. Employees are not allowed to accept any type of gift, including a cup of coffee. And its 1.3 million employees are encouraged to report any ethics violations that they might suspect or see. With having such a strict policy, Wal-Mart faces around 5,000 lawsuits a year from unethical business practices. Wal-Mart's rating as a company that consumers trust and respect has steadily declined in the last few years. Their image is declining due to negative press giving the perception that Wal-Mart is bad for the economy and is unfair to workers.
Wal-Mart Ethical Analysis
Wal-Mart was established in 1962 when Sam Walton, who had operated stores in Arkansas and Missouri, decided to open a discount store. In fifty years Wal-Mart has grown to be the largest retail chain in the world. Wal-Mart Stores, Inc. is not only the largest retailer in the world; it is now also ranks as the largest corporation in the world. Wal-Mart operates over 6,000 stores in the US and 13 international markets including the UK, Canada, Japan, Mexico, Brazil and China. It also retails products through its online site. The company is headquartered in Bentonville, Arkansas and employs around 1.3 million people.
A business Code of Ethics (COE) is a written set of guidelines issued by an organization to its workers and management to help them conduct their actions in accordance with its primary values and ethical standards. Wal-Mart has three basic beliefs which are relevant to their business practices; respect for individual, service to the customer, and striving for excellence. These three beliefs were the foundation of Wal-Mart’s ethical belief created by founder Sam Walton. Along with their basic beliefs Wal-Mart has ten guiding ethical principles which associates and directors are expected to follow.
1. Always act with integrity.
2. Lead with integrity, and expect others to work with integrity.
3. Follow the law at all times.
4. Be honest and fair.
5. Reveal and report all information truthfully, without manipulation or misrepresentation.
6. Work, actions, and relationships outside of your position with the company should be free of any conflicts of interest
7. Respect and encourage diversity and never discriminate against anyone.
8. Ask your manager or the Global Ethics Office for help if you have questions about this Statement of Ethics, or if you face an ethical problem.
9. Promptly report suspected violations of the Statement of Ethics.
10. Cooperate with and maintain the private nature of any investigation of a possible ethics violation.
Wal-Mart’s ethics policy, known as their statement of ethics, is considered to be one of the most elaborate due to the constant updating they do as the business faces new ethical and legal challenges. Ethical consideration has changed considerably since Sam Walton managed the company. The negative publicity receives a high amount of consideration from high stake holders which results in questioning the continuous sustainability with their current business practices. Associates are expected to adhere to many policies, which pertain to; conflict of interest, financial integrity, assets, trading practices, etc. Disciplinary actions, including termination, could be enforced towards any associate that violates or chooses to not follow their principals. They state that when bringing in third parties there should be reasonable steps taken to insure that they are provided and made aware of Wal-Mart’s ethical statement as well their reputation for integrity. As the nation’s largest retailer, second-largest corporation, and largest private employer, Wal-Mart made headlines this past year at an unprecedented rate.
Wal-Mart faces around