A few decades ago business ethics was not a major concern to many organisations. However, in the last few years, many companies have undergone a complete overhaul. As a result, many people have been left wondering whether companies should have a code of ethics which govern orgnisations and treatment of employees.
Different companies have come up with different codes of ethics, Wal-Mart included. However, they all revolve around the established principles under the umbrella the Global Business Standard Codex (Ethics Scores Board 2006).
This essay shall evaluate the employment practices of Wal-Mart using among three of the most common principles which are the fiduciary, fairness and the transparency principles. Wal-Mart upholds the fairness principle and violates fiduciary and transparency principles. Wal-Mart should be aware that ethical issues such as fair treatment of employees, sex discrimination and good wages are being observed by all the employees.
Firstly, Wal-Mart violates fairness principle especially concerning employees treatment; there have been allegations through out the media that the company mistreats its employees (Bhatnagar 2004). The company’s code of ethics stipulates that any employee who engages in activities which can result in conflict of interest, interfering with the company goals and objectives will be dismissed. However, this requirement has been found to apply only to some employees.
In 2007 a junior employee from the communication department reported a senior manager for conspiring to steal money from the company by signing a pay out check which could have resulted in the company losing money. To the employee’s surprise, instead of the management dealing with the senior employee who was not following Wal-Mart employee guidelines, the company asserted that what the employee had reported was a misconception.
On returning to the communication department, the employee was informed that the department no longer needed her services and was thus advised to look for a vacancy in another department within the same company. As expected, there was no department with a vacancy and as a result, the employee was made redundant and subsequently dismissed. It is unfair for employee to lose her position for defending the company code of ethics by ensuring they were being followed (Gogoi 2007).
In contrast, the company upheld the fairness principle when it fired a manager who was caught accepting gifts from people who had vested interests. In the same year, a senior employee was fired for having a relationship with a subordinate employee and accepting gifts from people with vested interests. The employee was fired for breaking one of the Wal-Mart codes of ethics.
Improper business ethics also means gender based discrimination. A company discriminates people based on their gender when it comes to hiring, compensation, promotion and so on. It has been reported that Wal-Mart had in some instances mistreated female employees (Werther& Chandler 2010). In 1999, women were more than two thirds of the total numbers of employees at the company but only occupied a third of the managerial seats (Bhatnagar 2004).
This made many people argue that Wal-Mart used unfair labor practices on its employees and that it was gender biased. There have also been allegations that the company’s process of hiring, promotion and pay rise was discriminatory whereby, women are always paid less than their fellow male employees in the same position (Spangler, Britt & Parks 2008).
Proper remuneration practices entails reducing the wage gaps between the men and the women. It also entails making all the employees feel comfortable that the money they are making is justifiable when compared to the work they do for the company. Wal-Mart is among the lowest paying companies in the US a characteristic which goes against its reputation.
A study in the Berkeley Women’s Law Journal (2004) indicated that the company’s slogan of “everyday low prices” was a major cause of the company’s continued unethical behaviors when it comes to wages. The journal stated that Wal-Mart employees earned approximately a third of what other unionized employees in other company’s did. The company is able to keep the wages low by resisting efforts by unions to make their employees union workers (Worth 2007).
Transparency entails engaging in honest dealings on behalf of the company. In the instances where Wal-Mart employees have engaged in dubious activities which might violate the company goals, the company always takes stern action. In 2005 the company fired several managers due to their acceptance of gifts and dealing with rival companies (Stout& Pickel 2007).
The company ethics dictates that good judgment, honesty and respect for all the stakeholders is paramount if anyone is going to remain as an employee with Wal-Mart. Issues about conflicts of interest are also not allowed within the company and social relationships between associates and vendors are never expected (Smith 2005).
The company also has detailed ethical requirements when it comes to book keeping. Accounts are informed well in advance that while working at Wal-Mart, any accountant who fails to follow the accounting laid guidelines will be dismissed from their job immediately (Freeman 2006).
Wal-Mart is also sensitive when it comes to the rights of their customers. The company makes sure that all the established guidelines are observed by their suppliers. The company can terminate contract with any supplier who fails to follow the laid guidelines. The problem with Wal-Mart is it forces its suppliers to sell their products at very low prices (Tilly 2007).
With the employees becoming increasingly aware of their rights, companies have been forced to follow the established codes and ethics if they are to retain employees. As a result, companies have introduced ethics and guidelines which everybody is supposed to follow. Wal-Mart, though it claims to follow its code of ethics strictly, doesn’t always as illustrated in the mentioned case studies.
There is also the gender imbalance as regards to how the company hires, wages paid and issue of gender balance managerial positions which favors males over female employees. Therefore Wal-mart despite asserting its commitment top fair business practice has been found time nd again to be in violation of its own fair trade practices.
Bhatnagar, R. 2004, Dukes vs. Wal-Mart as a catalyst for social activism. Berkeley Women’s Law Journal. Vol. 19, pp. 246-258.
Ethics Scoreboard: 2006, “More Ethics of Honest Mistakes”. [Online] Available at: http://www.ethicsscoreboard.com/list.htm [Accessed on May 11 2011]
Freeman, E. 2006. The Wal-Mart effect and the business ethics and society. The academy of management perspectives. Vol.20,Iss.3, pp.38-40.
Gogoi, P. 2007, Wal-Mart’s Latest Ethics controversy; Business week, Free Press
Smith, C.2010, “Comparison of Wal-Mart and Target Policies and Practices” [Online] Available at:
http://www.experiencefestival.com/wp/article/comparison-of-walmart-and-target- policies-and-practices. [Accessed on May 11 2011]
Spangler,M, Britt, M. and Parks, T. 2008, Wal-Mart and Women: Good Business Practice or Gamesmanship? Journal of Applied Management and Entrepreneurship
Stout, J. and Pickel, J. 2007, The Wal-Mart Waltz in Canada: Two steps forward one step back. The Connecticut Law Review. Vol.39, Iss.4, pp. 1495-1511.
Tilly, C. 2007, Wal-Mart and its workers: Not the Same All over the World. Connecticut Law Review. Vol.39, Iss.4, pp. 1807-1821.
Werther, W. and Chandler, 2010, Strategic Corporate Social Responsibility: Stakeholders in a Global Environment. 2nd Edition. SAGE Publishers, New York.
Worth, R. 2007, Workers’ Rights, Volume, 27. Marshall Cavendish publishers, New York.