Theoretical ethical approaches
Business ethics refers to concepts applied by a company in promoting good behaviour within its workforce. It explains the duties of businesses to conform to legal, environmental, economic, and social requirements (Frederick, 2008).
Wal-Mart stores have a very strong and effective policy on ethics. The company has been promoting moral behaviour within its workforce since inception. The company is applying five theoretical approaches in meeting the needs of its workforce, clients, partners, and the society.
First, there is the theory of ethical objectivism. This approach focuses on making moral judgments based on an individual’s attitude and manners. Wal-Mart believes that individual employees should be held accountable for their mistakes. Second, there is the ethical relativism theory.
This approach focuses on making moral judgments based on the beliefs of individuals in a business (Shaw, 2007). Wal-Mart has a highly diverse workforce characterized by individuals from different cultural backgrounds. The company promotes the need for equality among different cultures.
Third, there is the teleological ethical theory. This theory argues that moral judgments should be based on the kind of consequences experienced out of an action. The consequences of an action can easily tell whether an action was morally right or wrong (Frederick, 2008). Wal-Mart applies performance appraisal on its employees, as a way of cautioning them against engaging in unethical and unproductive activities.
Fourth, there is the deontology ethical theory. This theory states that moral judgment should be based on the duties and responsibilities of an individual to a business. Moral judgments should consider whether an individual or a business meets duties and responsibilities assigned to them.
Employees at Wal-Mart have duties and responsibilities to fulfil towards meeting organizational goals. Ethically, the employees should ensure that they remain committed to meeting the responsibilities given to them by the employer.
Absolute ethics vs. Relative ethics
Studies have shown that moral actions in a business are influenced by factors such as the environment, believes, and society. Cultural and religious beliefs of employees at Wal-Mart often influences their moral decisions. Social perceptions also influence an individual’s judgment about things that are right or wrong (Shaw, 2007). The corporate culture at Wal-Mart focuses a lot on respecting the cultural and religious beliefs of its employees.
Absolute ethics states that there is a collective ethical custom for everyone to follow. At Wal-Mart, there are certain ethical codes of conduct that all employees ought to follow.
For example, employees at Wal-Mart should promote the company’s policy on ethics by reporting all cases of unethical behavior regardless of the position held by a victim in the organization. On the other hand, relative ethics argues against the existence of a collective code of conduct (Frederick, 2008).
Ethics and operational activities in a business
In the contemporary work environment, businesses have numerous ethical responsibilities that can influence their operations. Organizational leaders and employees at Wal-Mart are very aggressive in promoting ethical practices through their work (Shaw, 2007). Ethical responsibilities that can affect business operations at Wal-Mart include building diversity in the workforce, promoting equality, implementing employment laws, and employee regulation.
It is important for Wal-Mart to apply employment laws effectively. Wal-Mart has been very effective over the years in ensuring the safety and good welfare of employees. The company has also promoted equality and diversity within its workforce by applying effective employee regulation strategies (Cory, 2006). The strategies include the effective application of the recruitment and selection process, as well as employee retention strategies.
Ethical considerations and business objectives
Promoting ethical practices has helped Wal-Mart to achieve its objectives faster. Ethical considerations have always influenced the kind of objectives developed at Wal-Mart. Ethical considerations help a business to develop objectives that will make it profitable, and are in a position to give back to the community (Shaw, 2007).
Ethical considerations at Wal-Mart have helped the company to develop objectives that focus on meeting the needs of all stakeholders. Ethical considerations have also helped Wal-Mart to focus on building a reputation by adhering to employment laws.
Ethical conduct and business stakeholders
Stakeholders at Wal-Mart have a crucial role to play in the success of the business. Implications when the business and its stakeholders act ethically include gaining a competitive advantage in the market, high employee retention rate, a good reputation, high growth rate, and faster achievement of business goals (Frederick, 2008).
On the other hand, the implications when Wal-Mart acts in an unethical manner include having a bad reputation, high employee turnover, few customers, lack of development, and slow growth due to lack of investments.
Companies as moral agents
Companies can act as moral agents because they have ethical responsibilities to meet. For example, Wal-Mart has responsibilities towards its employees, shareholders, customers, partners, and the society (Cory, 2006).
The company has been promoting ethical practices through its corporate social responsibility activities. Wal-Mart also promotes ethics through its workforce management strategies, and the corporate culture. Providing customers with quality goods at competitive market prices is also an effective strategy that Wal-Mart uses to promote ethics (Cory, 2006).
Employee involvement and empowerment
Studies have shown that human resources are valuable assets that organizations can use to achieve a competitive advantage and prolonged success. Businesses should apply effective strategies for managing their human resources as a way of empowering and involving them in crucial processes such as decision-making (Shaw, 2007).
Some of the mechanisms that Wal-Mart can apply include using a high performance work system, changing the organizational structure, reorienting the corporate culture, promoting employee training, and increasing access to information.
A high performance work system is a combination of numerous workforce management strategies that help organizations to implement and manage change (Cory, 2006). All these mechanisms help to empower employees and increase their involvement in business activities.
Current ethical issues affecting Wal-Mart stores
Since last year, the company has been dealing with a corruption case involving executive members of its management team. According to investigations, the executives totaling to over thirty were involved in bribing officials in foreign countries in order to facilitate the issuance of permits to operate (Viswanatha, 2014). The Wal-Mart executives in question allegedly bribed top government officials in Mexico, Brazil, China, and India.
According to an article published by the New York Times in 2012, the top management team of Wal-Mart stores in Mexico engineered bribing activities geared towards promoting the company’s business operations in the country (Viswanatha, 2014). Apart from bribing foreign officials, the executives attempted to sabotage an internal investigation that was seeking to validate whether the alleged payments had occurred.
By March this year, the United States government had already questioned a number of senior executives at the company over the allegations (Viswanatha, 2014). Former executives at the company who have been linked to the corruption case are expected to be questioned about their role in the saga.
Those expected to make an appearance in the course of the case include former vice chairperson, Eduardo Castro-Wright and former Chief Executive Officer H. Lee Scott Jr. (Viswanatha, 2014). Reports indicate that Wal-Mart is currently carrying out its own internal investigations regarding the allegations.
The seriousness of this matter was visible when the company announced that it had engaged the services of private firms to help with various aspects of the investigations (Viswanatha, 2014).
Reports indicate that the company is facing serious financial challenges because of the huge legal fees involved in the case (Viswanatha, 2014). According to the company’s spokesperson, investigations into the corruption allegations are still ongoing (Viswanatha, 2014). Wal-Mart has stated that it will continue to cooperate with the DOJ until the case is finalized.
Although it is hard to predict the possible outcome of the case, Wal-Mart’s spokesperson believes that justice will prevail and the reputation of the company restored. The company has also promised to give the accused executives all the support they may need during the case (Viswanatha, 2014).
Improving the ethics of operations
It is important for Wal-Mart to improve the ethics of its operations because people will choose to shop in their stores depending on the way they will perceive their efforts to promote ethics (Frederick, 2008). For example, Wal-Mart could have easily avoided its current legal tussle and a dented reputation if it had engaged its executives thoroughly with the bidding process.
Wal-Mart should apply a number of strategies to improve the ethical reliability of its operations, especially in dealing with corrupt employees. First, they need to develop an inclusive decision-making process that allows employees and other stakeholders to participate in organizational processes (Shaw, 2007).
Involving employees in decision-making allows them to understand organizational values and avoid engaging in unethical practices such as corruption. The executives involved in the corruption scandal felt the pressure of securing operating licenses for the company instead of promoting its ethical values.
Second, Wal-Mart should increase the capacity of its workforce by giving them more training in the appropriate ways of securing rights to operate in a foreign market. Wal-Mart employees should receive more training on the implications of engaging in corruption, especially to the company’s reputation and ability to remain competitive.
Research shows that corruption within the workplace is an indication of greed, poor leadership, and disregard to the ethical code of conduct in business (Shaw, 2007). Wal-Mart has the responsibility to ensure that its employees understand the ethical code of conduct in business by training them on a regular basis, especially on the changing dynamics.
Third, Wal-Mart should improve their human resource management strategies to incorporate the values of their employees (Frederick, 2008). Wal-Mart should ensure that their employees feel appreciated and valued. The strategies applied in promoting employee welfare indicate their value to the company. They also indicate the expectations of the employer in terms of promoting the principles of right and wrong.
Corruption is one of the main unethical practices that ruin an organization’s reputation, especially if members of the management team are involved. Effective human resource management strategies at Wal-Mart should help employees in understanding their responsibilities towards each other. In addition, good remuneration helps in reducing the desire of employees to engage in corrupt activities as a way to supplement their earnings.
Corruption involving organizational leaders is very harmful because it influences on the ability of a workforce to promote ethics (Frederick, 2008). Wal-Mart should ensure that its corporate culture, work environment, organizational goals, and business operations promote a zero tolerance policy on corruption among its employees. Effective human resource management strategies help to promote the values of honesty, self-respect, responsibility, and accountability in a workforce (Frederick, 2008).
Regular market analysis is another strategy that Wal-Mart should use to increase the ethics of its operations. The contemporary business environment is very dynamic and highly competitive (Cory, 2006). Corruption is one of the elements that have changed the dynamics of doing business, especially in foreign markets.
Wal-Mart should analyse the dynamics of their target market before introducing their operations. This will help in establishing the factors that are likely to influence on crucial processes such as getting licenses to operate, gaining relevance in the market, and meeting market demands (Cory, 2006).
A suitable ethical code
A suitable ethical code for Wal-Mart is Living Our System of Beliefs. Wal-Mart needs an ethical code right now because there is an urgent need to restore its reputation and improve the reliability of its operations. This ethical code will help employees at Wal-Mart in dealing with challenges such as lack of self-belief, cohesion within the workplace, promoting teamwork, increasing responsibilities, accountability, and promoting ethical practices.
This ethical code will encourage various practices that promote the company’s vision, principles, values, and mission. These practices should embody the system of beliefs at Wal-Mart. The main practices that this ethical code seeks to promote are a need to build mutual trust, communal respect, effective communication, compliance, accountability, responsibility, and acknowledgement.
Wal-Mart should ensure that it wins the trust of its employees, customers, and stakeholders. This will help the business in promoting ethics in its operations. Mutual respect is another practice that will help Wal-Mart in promoting ethics.
Wal-Mart should be committed towards treating everyone, especially the employees with respect and dignity. This will motivate them to promote ethics in their activities, as well as allow them to fulfil their potential. Wal-Mart should also ensure that its work environment is free of any form of discrimination.
Effective communication is very important in promoting ethics at Wal-Mart. Wal-Mart should provide a workplace environment that encourages its employees to express themselves freely, especially on issues regarding ethics. Wal-Mart should also show its commitment towards investigating all kinds of unethical practices involving any of its employees.
Wal-Mart should ensure that its employees comply with the company rules and the general ethical code of conduct used in their industry. First, employees need to understand the rules before complying with them. Compliance will help employees in increasing their accountability and being more responsible for their actions. Wal-Mart should develop effective strategies that will help employees in upholding the laws.
Finally, Wal-Mart should ensure that they acknowledge its employees appropriately when they comply with the rules and promote ethics. Wal-Mart should develop strategies that will encourage its employees to promote ethical practices by upholding the company’s ethical code.
Cory, J. (2006). Activist Business Ethics. New York: John Wiley & Sons.
Frederick, R. (2008). A Companion to Business Ethics. New Jersey: Cambridge University Press.
Shaw, W. (2007). Business Ethics. New York: Cengage Learning.
Viswanatha, A. (2014). Wal-Mart is Paying Legal Fees for Big Number of Execs. Web.