Corporate Social Responsibility In Wal-Mart

Corporations make decisions daily, of whether or not they choose to be socially responsible. The main purpose of businesses is to gain profits, but it does not go unnoticed when they consider the good of our economy, its consumers, and stakeholders. With corporate social responsibility being adopted by many as the means of assuring values based corporate governance, the quality community now has the opportunity and responsibility to take leadership in promoting ethical business practices and driving corporate social responsibility to regain consumer confidence.

To everyday consumers, there are times we consider the background and beliefs of businesses and organizations we choose to support. Wal-Mart, known to many as a huge discount, one-stop-shop, was founded in 1962 by Sam Walton in Rogers, Arkansas, and they became the largest corporation in the world by 2001. When the stores first opened, At the time when the Wal-Mart stores started in the year 1962 it was focused only in small rural cites and town which had a population of 5,000 to 25,000.

One of their taglines, “Everyday low prices”, has been a slogan that drives people despite some of the unethical practices and trouble the corporation has seen. Today Wal-Mart servers around 130 Million people worldwide and it has employees over 1.3 million people across the globe. There has been increased in growth of sales over 11% which amounted $6.4 billion US dollars. In the early 2000’s the corporation seemed to be getting hit with major lawsuits because of ethical issues.

The way Wal-Mart decided to handle and respond to the allegations and cases brought up against them is paying out money, but has there been change in the culture and ethical behavior of the corporation? Wal-Mart’s treatment of employees, suppliers, the environment, and the overall economic impact on communities. As humans, we expect businesses to treat their employees fairly and with respect. And we expect those invested in it to have integrity An unjust way involving most businesses and their employees is unequal pay. It has been proven that women salaries are sometimes significantly lower than men among other types of discrimination in workplaces. Wal-Mart was exposed for showing discrimination to their female employees in pay, positions, promotions, and trainings. This led to a lawsuit filed against Wal-Mart in 2004 was the largest class-action lawsuit and involved 1.6 million female employees, both former and current. There were also claims of Wal-Mart not allowing employees to take lunches or breaks during their shift. There were also cases brought against them because of not allowing employees to receive overtime pay. Not only is this unethical, it is illegal. They have also hired illegal immigrants, while also operating sweatshops. This too, resulted in a class-action lawsuit. Because a pattern exists, we can assume Wal-Mart is acting in a way to produce the greatest possible balance of good over dissatisfaction for their stockholders. Big corporations and Wal-Mart alike also play vital roles in the harm of our environment. Wal-Mart was once criticized for contributing to urban sprawl by forcing out of business local merchandisers, many of whom were unable to compete with the company’s economy of scale. Because the corporation continues to grow, they also sometimes relocate. Wal-Mart has grown so much over the past two decades there are over 26 million square feet of vacant Wal-Marts and this is astronomical because this does not allow for effective usage of land, nor does it do good for our environment. Through a utilitarian perspective, we acknowledge or at least assume that Wal-Mart is acting in a way to produce the greatest possible balance of good over dissatisfaction for their stockholders. Does Wal-Mart uphold the fiduciary obligations to their stockholder?

Research shows that Wal-Mart believes that by making these changes now, it would help them come closer to the company’s main objectives of respecting the individual, servicing the customers with superior and excellent customer service. And recently, Walmart Inc.’s corporate mission is “to save people money so they can live better”. On average, they save families around $2300 a year, according to a study that analyze the national and regional economic impact of Wal-Mart. June 4, 2004 was the day Wal-Mart began putting ethical businesses into practice when their “Global Statement of Ethics” was tweaked. The “Guiding Ethical Principles” was created to assist Wal-Mart associates and suppliers with making the right decision and doing the right thing. It was asked that they follow the law at all times, be honest and fair, not manipulative; avoid conflicts, not to discriminate or act unethically, to seek assistance, report ethics violations, and to cooperate with investigations should they come about. Some stockholder relationships with Wal-Mart are severely damaged and it takes a solid turnaround for these things to be fixed. If they were more ethical, not as many people would boycott them, and their business would grow even more. Instead, they violate regulations and restrictions, and end up having to pay large sums of money and settlements. To develop an improved ethical culture and respond more positively to its diverse stakeholders, Wal-Mart should first try practicing the aforementioned ethic principles. Not just Wal-Mart, but all corporations, alike, because Wal-Mart is the world’s largest retailer.

In 2005, Wal-Mart introduced a website to counter claims made by critics, and lists facts that not many are aware of, trying to shed light on the corporation and some of the right business choices they make. In turn since, they have contributed greatly to the economy, actually made a more positive impact on our environment, and have given back to the community. Hopefully the opening and abandonment of stores will be eradicated, because they have committed money for the next ten years to conserve at least one acre of priority wildlife habitat for every acre developed for company use through “Wal-Mart Acres for America”. This is huge, and not only shows initiative for change, but this contributes to the National Fish and Wildlife Foundation. They have made significant donations and contributions through hurricane relief funds, and their contribution to the economy, and have provided jobs for thousands. To develop an improved ethical culture, they simply need to promote good governance. Their reputation goes hand in hand with the growth of the business, because ethical business practices are extremely important. A possible way of improving this corporate vision is to include information about other stakeholders, such as employees, in addition to target customers. This recommendation aims to make the vision statement holistic.

Wal-Mart is future oriented, and is always looking for ways to reach a more broad target audience, as well. They are continuing to move into new areas, increasing its focus on organic foods and even moving into more expensive products for upscale clientele. If Wal-Mart can commit to better ethics and integrity, as well as heavily engage their stakeholders and lead initiatives, their sustainability will be a great asset as they continue to grow.