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Business Ethics Assignment

This document contains an assessment for a critical review essay on business ethics at Walmart. It includes an introduction outlining that the essay will analyze Walmart's business ethics in relation to three stakeholders: employees, consumers, and competitors. The document then lists the assessment criteria that will be used to grade the essay, including knowledge and understanding, analysis and evaluation, research and enquiry, presentation and referencing, and communication. Finally, it provides the essay requirements and word count.

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0 140059924 Module Code 3BM150 Module Title Business Ethics Level BA Module Tutor Peter Watt Credit Value of Module 20 Feedback Process Type of Submission Electronic upload to Moodle using Turnitin Expected Feedback Date By 5PM, 26/1/17 Assessment Task A critical review essay Weighting 75% Word Count 3733 Due Dates (Published Deadlines) Formal summative assessed essay Deadline Thursday 5 January 2016, by 5pm Assessment Regulations
1 140059924 YORK ST JOHN UNIVERSITY 140059924 THE UGLY TRUTH: ETHICAL BUSINESS IN WALMARTS IN WALMART
2 140059924 Contents Introduction.................................................................................................................................1 Business Ethics- An Overview........................................................................................................1 Grey Area.................................................................................................................................2 Walmart Brief Overview................................................................................................................ 2 Stakeholder Analysis..................................................................................................................... 2 Employees................................................................................................................................ 3 Consumers................................................................................................................................ 3 Competitors.............................................................................................................................. 4 Ethical Challenges......................................................................................................................... 5 Employeesand Mistreatment....................................................................................................5 Consumers and Conservative Ways............................................................................................ 6 Competitors and Monopolizing..................................................................................................6 Recommendations........................................................................................................................ 7 Employee’s Recommendations...................................................................................................7 Consumers’ Recommendations..................................................................................................7 Competitor’s Recommendations ................................................................................................ 8 Conclusion ...................................................................................................................................8 References...................................................................................................................................9 I Eloise Shaw declare thatI am the sole authorof thisassignmentandthe workis a resultof my own investigations,exceptwhere otherwise stated.All referenceshave beendulycited
0 140059924 ASSESSMENTand gradingCRITERIA Assessed Components A* A B C D F (fail) F (fail) 0 (100-85) (84 - 70) (69 - 60) (59 - 50) (49 - 40) (39 -20) (19 - 1) F (0) Knowledge & Understanding Workofoutstandingperformance Excellent understanding of a w ide range of ideas Comprehensive literature review that makes a clear attempt to cover as much of the field as possible w ithin the constraints of space Excellent relevant, correct and comparative use of a range of theories w ith excellent ability to develop & support an argument lining to theory and academic discussions. Very good understanding of a range of ideas Literature review which covers main authorities and includes up to date sources froma range of authorities including recent journal articles. Very good relevant and correct use of a range of theories w ith very good ability to develop and support an argument lining to theory and academic discussions. Good understanding of relevant ideas Literature review appears to cover main authorities but lacks depth and not clearly linked w ith present study. Use of a few journalarticles Good relevant and largely correct use of a range of theories and models w ith good ability to develop & support an argument lining to theory and academic discussions. Fair understanding of a few relevant ideas Literature review lacking in range and scholarship. Limited to text books and w ebsites. Adequate use of theory/model but w ith many errors in understanding of the key principles. Subject know ledge is poorly demonstrated Literature review is limited and does not link to the assessment brief Limited use of theory/model, w ith demonstration of substantial errors in understanding Non serious attempt No or very poor Literature review or not related to study Fails to identify ANY relevant theory/models and principles to the selected organisations. Workofnoorlittlevalueoorrleveancetotheassignmentbrief Analysis & Evaluation Excellent ability to analyse, evaluate, compare and construct values Analyticaland comparative w ith substantive links to research data and Accurate analysis and very good evaluation Predominantly analyticalw ith good links to research data and Good analysis and sound evaluation Predominantly descriptive but some evidence of analytical thought, w ith good know ledge base, and good interpretation Fair analysis w ith some evaluation Complete but w holly descriptive, w ith adequate know ledge Weak analysis and evaluation Wholly descriptive and incomplete. Lacking in Non-serious attempt No or very limited analysis and evaluation Wholly descriptive w ith MAJOR key omissions, w ithout any understanding of
1 140059924 development of coherent academic discussions with excellent understanding and detailed know ledge base, and excellent interpretation and application of theory to evaluate the impacts and benefits of business ethics. development of coherent academic discussions with very good know ledge base, and very good interpretation and application of theory to evaluate the impacts and benefits of business ethics. and application of theory to evaluate the impacts and benefits of business ethics. base, and adequate interpretation and application of theory to evaluate the impacts and benefits of business ethics. understandin g. Poor know ledge base. Poor interpretation and application to given issue. the topic. No evaluation or evidence of critical thinking. Research& Enquiry Rigorous and sustained enquiry w ith excellent outcomes Excellent range of appropriate sources including journal articles, books and alternative sources Accurate and consistent enquiry using appropriate methods Very good range of appropriate sources including journal articles, books and alternative sources Consistent approach draw ing on a range of sources Good range of appropriate sources including journal articles, books and alternative sources Relevant methods of enquiry w ith some inconsistencies Range of sources used but over reliance on w ebsites and low er level sources or few sources used Little evidence of research or understanding of appropriate approaches Some sources used but over reliance on w ebsites and lower level sources Non serious attempt Too few sourcesused Presentation & Referencing Technically excellent, accurate referencing and presentation Excellent presentation and structure following guidance provided Excellent application of Harvard system w ith no missed citations and Accurate and consistent referencing and presentation Very good presentation and structure following guidance provided Very good application of Harvard system w ith few missed citations and complete bibliography / reference list Good referencing and consistent approach to conventions Good presentation and structure follow ing guidance provided Good application of Harvard system w ith some missed citations and limited bibliography / Fair understanding of conventions Adequate presentation and structure following guidance provided Poor application of Harvard systemw ith errors Poor referencing and little understanding of conventions Poor presentation and structure not follow ing guidance provided Failure to follow Harvard Non serious attempt No attempt to reference
2 140059924 complete bibliography / reference list reference list errors Communication Excellent ability to communicate ideas clearly and appropriately Excellent and fluent communication, follow ing a logical sequence of thought, w ell indexed and linking sections to produce a quality report. Very good ability to communicate ideas clearly Very good & fluent communication, follow ing a logical sequence of thought. Well- indexed and linked producing a very good quality report. Most Ideas communicated effectively Good presented and structured report that follow ssome sequence. Would benefit frommore definite links to sections. Ideas are communicated w ith some success Adequately presented and structured report, but w orklacks creativity in presentation and seems semi structured. Ideas are not communicated effectively Poorly presented w orkwith few evidence of any logical though or sequence. Unstructured report w ith no definitive sections Non serious attempt Failure to meet the key requirements of the assignment brief.
1 140059924 Introduction Ethical businesspractice isastandard societysetsforall businessestofollow. Ultimatelyhow businessespreformethicallyisuptotheirown definition of ethics.Thisessayisgoingtocritically lookat what businessethicsmeansandhow businesses preformunderit.Tobest examine atan example of businessethicsthisessayisgoingtofocuson the US corporationof Walmart. Thisessay will analyse Walmart’s businessethicswiththreeof itsstakeholders:competitors,employees,and consumers. The ethical issuessurroundingWalmartwill be shownthroughexamplesof challenges and issuesthatWalmarthas facedas a corporationinrecentyears.Aftercriticallylookingathow Walmart hasperformedethically,recommendationswill be made inthe formas advice for company inthe future. Business Ethics- An Overview Businessethicsare the principlesandstandardsthatdetermineacceptable conductinbusiness organisations(Ferrelletal,2015). Businessethicshasbeenstatedasbeinganoxymoron.the perceptionthatbusinessandethicsare contradictory isbasedonthe general acceptedviewof what managersare supposedtodoand therefore how theyare supposedtoact(Collins,1994). Business ethicsadaptsthe methodsandpurpose of normative ethicsto the specificrequirements of moral issuesinbusiness(Pratley,1995) To determineethical limits, businesses nolongerrelyon theirown moral values(De Cremer,2013). Businessesnow checkthe existinglawsandrulestosee whatisnot legallyacceptable(De Cremer,2013).The advantage of thisapproachis that if the law doesnot mentionthatitis notacceptable thenbydefinitionitshouldbe acceptable forbusinesses(De Cremer,2013). Businessethicsisprimarilyconcernedwiththose issuesnotcoveredbythe law,or where there isnodefinite consensuson somethingbeingrightorwrong(Crane andMatten, 2004). Most executivesfromtime totime are almostcompelled,inthe interestsof theircompaniesor themselves,topractice deceptionwhennegotiatingwithcustomers,dealers, labourunions, governmentofficials,orevenotherdepartmentsof theircompanies (Carr,1968). By conscious misstatements, hiddenfacts,orexaggeration,theseexecutives seektopersuade otherstoagree withthem(Carr,1968). A “responsibility perspective”onanyfieldof ethicscombinesaclaimof value withatendencytoevaluate the situations,policiesandpracticesthatfall withinthe fieldina certainthe way (Newton,2005). If the majorityof these companiesare actingunethical andnot takingresponsibility, whatisthe issue?Tocompaniesandemployers,actinglegallyandethically meanssavingbillionsof dollarseachyearinlawsuits,settlementandtheft(Weiss,2014). One way of businessesbeingethical isthroughcorporate social responsibility. Corporate social responsibilityreferstothe capacityof a corporationto respondto social pressuresethically (Crane and Matten,2004). Carroll (1979) defined the fourcategoriesof CSRincorporate social performance,depictingthemasorderedlayerswhichhe labelledeconomic,legal,ethical and discretionaryresponsibilities(Visser,2005). However,MiltonFriedmanarguesthatabusinessisnot responsible forbeingethical. The responsibilityof businesses istoconductthe businessin accordance withtheirdesires,whichgenerallywill be tomake as muchmoneyas possible while conformingtothe basic social rulesof the society,boththose embodiedinlaw andthose embodied inethical custom (Freidman,1970).The doctrine of social responsibilityisfrequentlyacloakfor actionsthat are justifiedonothergroundsratherthana reasonfor those actual actions (Freidman, 1970). All businessorganisationsface the challengeof meetingthe higheststandardsof ethicswhile also,remainingcompetitive andprovidingthe productsand servicesthe publicdemands(Boatright, 2014).
2 140059924 Grey Area BusinessEthicsissaidto begin where the law ends(Crane andMatten,2016). Businessethicsis primarilyconcernedwiththose issuesnotcoveredbythe law or where there isnodefinite consensusonwhethersomethingisrightawrong- a grey area as showninFigure 1 (Crane and Matten,2016). There are managementpracticesthatalsoappearto benefitmanagersatthe expense of stockholdersand occasionally othercorporate stakeholders(BowieandWerhane, 2005). Ethics Grey Area Law (Figure 1, authorown,adaptedfrom:Crane and Matten,2016) Walmart Brief Overview Today,nearly260 millioncustomersvisitmore than11,500 storesunder63 bannersin28 countries and e-commerce sitesin11countrieseachweek (Walmart,2016). The Walmart U.S. segment operatesretail storesinthe UnitedStates,includinginapproximately50states,WashingtonD.C. and PuertoRico (Reuters,2016). Ninety percentof USresidentslivewithin15milesof a Walmart (Fishman,2006). Walmart continuestobe the largestretailerinthe worldwithreportedrevenues of approximately$469 billion forfiscal yearendingJanuary2013 (Morilloetal,2015). Despite its publicrecognitionand prevalence throughoutthe U.S,Walmartisamongone of the least-admired corporations inthe world(Ghillyer,2008). The reasonbehinditsunpopularitycanbe lookedat throughthe stakeholderanalysis andbythe ethical challengesthiscompanymeets. Stakeholder Analysis Whenbusinesses actunethical,they riskstakeholder’sinterests.A stakeholderinabusinessisany groupor individual whocanaffect,orisaffectedby,the achievementof the organization’s objectives(CraneandMatten,2004). Three of Walmart’smost crucial stakeholdersare there employees,customersandcompetitors. A highlysalientstakeholderpossessesall three attributes: power,legitimacy,andurgency(Griseri andSeppala,2010). The attributesare dynamicinthe sense that a stakeholdermaybecome more orlessimportantfora companyas a resultof a change inthe extenttowhichtheyhave one or more of these attributes(Griseri andSeppala,2010). POWER LEGITIMACY URGENCY (Figure 2,author own,adaptedfrom:Mitchell etal,1997)
3 140059924 The model above isa representationof stakeholderimportance adaptedfromMitchell. Powerconcernsthe normative means thata stakeholderhasat theirdisposal toexertinfluence on management(Majochetal,2014). Legitimacyisgeneralizedassumptionthatthe actionsof anentity are appropriate withinasociallyconstructedsystemof norms,values,beliefs,and definitions (Mitchell etal,1997). Urgencyrefersto the degree towhichthe claimisperceivedbymanagement as callingforimmediate attention(Majochetal,2014). The yellow circle representscustomers,the blue circle representscompetitorsandthe greencircle representsemployees.Itwill be further explainedwhyeach stakeholderisplacedinthese sections throughoutthe report. Employees Labour isnot simplyacommoditytobe boughtand sold,eventhough ithasbeen arguedthat wages are defensiblydeterminedbythe market,inasystemwithproperandjustbackground institutions (DeGeorge,1995). Labourderivesfromhumanbeings,andhumanbeingsholdrights,whichtheydo not give upby becomingemployees(DeGeorge,1995). Walmart employs2.3millionassociates worldwide –1.5 millioninthe U.S.alone,makingtheiremployee stakeholdera significantly large groupof people (Walmart,2016). Over300,000 associateshave been employedby Walmartfor10 yearsor more (Walmart,2016). Two thirds of Walmart workers cannotaffordto participate inthe companyhealthinsurance plan,whichcostsabout20 percent of a worker’spaycheck (Brownstein, 2004). Walmart employeesare notallowedtobe a part of unions(Clark, 2007). Walmart’spolicyisto oppose unionsand fighteffortsof unionization(Rosen,2006).To keepWalmartnon-union,when employeesare hiredtheyare immediatelyshownananti-unionvideo(Rosen,2006). Thisis a factor inwhy employeeshave suchalow wage (Crofoot,2013). The unionizedretailworkersinthe United Statesthat do notwork at Walmarton average make 25 percentmore annuallythanthose employeesthatworkthe same jobat Walmart (PBS,2010). Consumers In orderto trulydeveloptrustwiththeircustomers,companiesmust “walkthe walk”(Knauss,2010). For example,anyactivity engagedinwithcustomerswill be fairanddefensible,noexceptions (Knauss,2010). Demographics of consumers at Walmart A studyin2000 by AndrewFranklin,showedthatWal-Martoperatedprimarilyinpoorandworking- classcommunities,finding,inthe bone-drylanguage of hisdiscipline,"asignificantnegative relationshipbetweenmedianhouseholdincome andWal-Mart'spresence inthe market” (Featherstone,2005). Accordingto the data, the average Wal-Mart shopperisa white,50-year-old female withanannual householdincome of $53,125 (Peterson,2014).Only37% of Walmart consumersownedapassportbut 54% owneda gun (Zogby,2015). 1 outof every5 Walmart shoppersusesfoodstampsinorderto meettheirbasicneedsinsome way(Gaille,2014).
4 140059924 Political Party of Walmart Customers Republican Democrat Independent Race of Walmart Customers White African American Hispanic (Figure 3, authorown, adaptedfrom: Zogby, 2015) (Figure 4, authorown, adaptedfrom: Zogby, 2015) ConsumerSatisfactionwith Walmart In 2015, Walmart scoreditsworst customersatisfactionratingsince 2007, securingthe bottomspot on AmericanCustomerSatisfaction Index’sretail customerservice ranking(Hill,2015).In 2011, 2012 and 2013, Walmart was the single lowest-scoringdepartmentanddiscountstore onthe list (Hill, 2015). (Figure 5,source:Hill,2015) Competitors Walmart dominatesthe retail industryasitofferssome of the lowestpricesforproductsand servicesothercompaniescannotaffordtooffer(Pyle,2014). PBS Frontline (2004) reportedthatSam Walton’sformulawasbuycheap,sell lessthanthe otherguy,andmake yourprofitonhighvolume and fastturnover. It doesmore businessthan competitorssuchas Target, Sears,Kmart,J.C.Penney, Safeway,andKrogercombined (Fishman,2003). As a store,Walmartis notjust the largest;itno longerhasany nearrivals. Walmartis as bigas Home Depot,Kroger,Target,Costco,Sears,and Kmart combined (Fishman,2006).Target, whichisconsidered Wal-Mart’snearestdirectrival issmall by comparison (Fishman,2006).Each year Walmartsellsmore bySaintPatrick’sDay,March 17, than Target sellsall year(Fishman,2006).Inmany categoriesof productsthatit sells, Walmartisnow 30
5 140059924 percentor more of the entire market(Fishman,2006). Walmart sellsmore than30 percentof the skincare andhaircare products usedinthe UnitedStatesandmore than30 percentof small kitchen appliances,housewares,andtoyssold inthe country(Fishman,2006). Ethical Challenges An ethical issue isanidentifiableproblem, situation,oropportunitythatrequiresapersontochoose fromamong several actionsthatmaybe evaluatedasrightorwrong,ethical or unethical (Ferrellet al,2015). Inbusiness,suchachoice ofteninvolvesweighingmonetaryprofitagainstwhataperson considersappropriate conduct(Ferrell etal,2015). The bestway to judge the ethicsof a decisionis to lookat a situationfroma customer’sorcompetitor’sviewpoint,asthisfollowingsectionwill explain(Ferrelletal,2015). Employees and Mistreatment One ethical issue Walmartiscriticizedforisthe compensationtheypay workers.The average annual salaryfor a Walmart salesassociate in2001 was US$13,861 and the average hourlywageswas US$8.23 (Ghillyer,2008). The primaryreasons for Wal-Martlow wagesis because theywanttocut operatingcostsand theywant to continue offeringlow prices(BusinessPractices,2015). Walmart employeesare sopoorthat theyare skippinglunch,sharingitor,insome cases,stealingitfromtheir co-workers,some of the company’sworkersclaimed(Kasperkevic,2015). While itseemsrespectable thatWalmartemploysmore thananyotherprivate employerinthe UnitedStates,itisunfairthat 90% of the store’s managerpositions are heldbymen (Ghillyer,2008). In the UnitedStates, since 2005, Walmarthas paidabout $1 billionindamagestoU.S.employeesin six differentcasesrelatedtounpaidwork (Sethi,2013). In 2013, itwas notedthat eventhough womenaccountfor 57% of Walmart’sworkforce inthe US theywere still gettingpaid$1.16 lessper hour (Osterndorf,2015).Alsomultiplefemale workershave come forwardsayingtheywere overworked,firedorputindangeroussituations byWalmartwhile beingpregnant(Osterndorf, 2015). These casespointtowardWalmart takingmore of the “Friedman”approachinthat itsmain responsibilityistomake a profitnomatter the cost. Asof 2016, aftermanyprotests,Walmart agreedto payemployees $10 an hour (Owens,2016).But a full-time employee working34 hoursa weekfor$10 an hour still onlyearns$18,000 a year,below the national povertyline foranaverage familyof four(Owens,2016).Howeverdue tothe company’sstronganti-unionstance itmakesit harderfor employeestofightback(Kasperkevic,2015). Thisis whyemployeesfall underthe under the urgentand legitimatepartof the salience model.The poorwage,lackof benefits,andsexism reportsand legitimatecausesof concernwithanurgentneedtobe addressedbyWalmart. Same Sex Couple VS WE A case of discrimination occurredin2015 whena Walmart employee suedthe retailer,sayingits previouspolicyof denyinghealthinsurance tothe spousesof gayemployeesviolatedgender discriminationlaws(Reuters,2015). Employee,Jackie Cote,whohasworkedatWalmartstoressince 1999, saidinthe lawsuitthatherwife developedcancerin2012 and the denial of insurance ledto more than $150,000 inmedical debt (Reuters,2015).Ms. Smithsonisnow inhospice care,Ms. Cote said(Reuters,2015). A Walmartspokesmansaidthatthe company’sbenefitscoverage before the 2014 change was legal,howeverthisdoesnotmake itethical,thisputsitina greyarea. Walmart set aside $7.5 million,tocompensate employeesaffectedbythe denial of spousal benefitsduringthe three yearsbefore Jan.1, 2014, whenthe companychangeditspolicy(Schieber,2016). Walmart expected “nomore thana fewthousand”people to be eligibleforthe settlement(CNN Wire,2016).
6 140059924 Consumers and Conservative Ways Today, 56 percentof citizenspolled believe that“Walmartisbad forAmerica”(Morilloetal,2015). Residentsof statesthat votedMittRomneyinthe 2012 Presidential Electionwere more likelyto patronize one-stopshopssuchasTargetand Walmart (Wells,2015). Due to Walmart’samountof RepublicanandIndependant customersasshowninfigure 1 part of Walmart’ssalesstrategyisto protectthe image of itsstoresas “familyorientated”(Brunn,2006). Alsoof all the donationsmade by bothWalmart’sPACand the Waltonfamilysince the 2000 Presidential Election,nearly70percent wentto Republicancandidatesandcommittees (Berman,2013). RecentlyWalmartstoppedthe sellingof confederate flags,however theykeep sellingguns(Lee,2015).It isnotoriously knownfor protectingconsumersfromproductsthatthe managementdeemsoffensive,astrategytokeepwith the conservative campaignto“protectfamilyvalues”(Brunn,2006). A Christianorganisation, The TimothyPlan,showedoutrage atwhatWalmart wasselling(Brunn,2006). The TimothyPlan PresidentArthurAllydemandedWalmartremove copiesof the magazine Cosmopolitancallingit “most blatantlyaggressive soft-core pornographicmagazine inAmerica”(Curry,2002). Allysaidhe foundWalmart'spositiononCosmopolitanmagazine incongruouswithitsWebsite-statedpolicies regardingitsrefusal tostockmusicwithparental guidance stickersanditsrestrictionof the sale of "mature-rated"videogamestocustomers17 yearsof age and older(PRNewswire,2002). Walmart has implementedpoliciesagainstliterature itdeemsoffensive,takingaway men’smagazineslike Maximand Stuff fromthe storesracksalongwithgay publicationssuchas Out(Brunn,2006). With magazinessuchas Glamour,MarieClaire andCosmopolitan theyare obscuredwithbinders(Brunn, 2006). By Walmart now coveringthese magazines,showsthe powerthatconsumershave overthe companyand whytheyare placedinthe powersectionof the salience model. Competitors and Monopolizing That kindof dominance Walmarthas at bothendsof the spectrum— dominance acrossahuge range of merchandise anddominanceof geographicconsumermarkets—meansthatmarketcapitalismis being“strangledwiththe kindof slowinexorabilityof aboa constrictor”(Fishman,2006). Although Walmart providesjobsformore than1 millionpeople inthe UnitedStates,ithashelped putlocal drugstoresandgrocers onthe brinkof bankruptcy (Frick,2006). While ina lot of ways,people see Walmart as an oligopoly,the way theydrive outcompetitionismonopolistic(Basker,2007). Walmart implementsastrategicpredatorypricingtacticinthattheydrop pricestoolow and drive away competition,thusgainingamonopoly(Starvos,2014).Many local communities criticize Walmart as a majorfactor in the dissolution of local businesses(Ghillyer,2008). WhenWalmart starts sellinggroceriesinanewarea, it brings lowerpricestoitsownshoppersand through competition,drivesdownthe pricesof establishedgrocerystores(Fishman,2006). Itisclear that Walmart can run smaller,family-runretail storesinthe areaout of business(Crofoot,2013). The so- called"Walmarteffect"iswhenWalmart,orany similarbig-boxretailer,movesintotown,reshapes shoppinghabits,anddrainsthe viabilityof traditional local shoppingareasor"mom-and-pop"shops (Fishman,2006). The average difference inWalmart’spricesverses competitor’s pricesvaryfrom8- 27% (Basker,2007). However,if someone securesajobwithWalmart,onaverage the individual will be are paid18 percentlessthanhe or she wouldbe at a family-runretailstore (Crofoot,2013). This wouldrepresenta“greyarea” forWalmart.This isalsowhy competitorsare placedinthe legitimate sectionof the salience model.Whiletheydonothave muchpower,andare not verypowerful,they have legitimatereasonstobe upsetwiththe wayWalmartis performingethically.
7 140059924 Recommendations Whenlookingatthe short term,ethical behaviourmayprove costlytoa company’s bottomline (Stark,1993). But accordingto the advocatesof corporate social responsibility,ultimatelythe marketwill rewardsuch behaviour,suchaswitha goodreputation(Stark,1993). Employee’s Recommendations As of now, Walmart hasmade in its effortstoofferbetterwagesandbenefitstoitsworkers (The AssociatedPress,2016). All of the evidencesuggeststhatWalmartcaneasilyaffordthisastheir minimumwage (Owens,2016).A $15 minimumwage wouldbe goodbusinessforWal-Mart(Owens, 2016). ResearchersatThe WhartonSchool findthat foreveryadditional dollarspentonpayroll ata givenstore,salescanincrease anywherefrom$4 to $28 (Owens,2016).This increase wouldalso helptaxpayersaswell asemployees(Owens,2016).Whenworkerscannot affordtomeettheirbasic needsdespiteworkingfull time,theyare forcedtoturn topublicassistance (Owens,2016). This meansthat companiesrelyontaxpayerdollarstosubsidize rock-bottomwages(Owens,2016). Walmart istrying, to incorporate physical exercise intoeveryemployee'sjobdescription,nottohelp the overweightgetinshape,buttostopthemapplyingforjobsinthe firstplace - intheirown words,"to dissuade unhealthypeople fromcomingtoworkat Wal-Mart",whichwouldsave them an estimated$1bna year inbenefits (Dowling,2005). Therefore, agoodwayof incorporatinghealth intoan employeesworklifeisbyrewardingthem, ultimately savingWalmartmoneyinthe longrun by nothavingto pay as muchfor healthcare (Dowling,2005). One companyWalmartcouldreallydo withmodellingitself afterisHallmark.Hallmarkisa$3.7 billionbusiness withmore than 40,000 retail storesacrossthe U.S. (Hallmark,2016). One ethical tactic Hallmarkdoes ishave an employee rewardsystem.Makingitpossible foremployeestoearnan additional $400 a year bythe Hallmark HealthRewardsProgram(Hallmark,2016). Employeesearnpointsformaintaininghealthyweight, bloodpressure andcholesterollevels(Hallmark,2016). Consumers’ Recommendations While alarge segmentof consumersof Walmartare republican,Walmartshouldappeal more toits liberal crowd.Withthe example of the organisation“The TimothyPlan”,itwouldbe more vital to expandtoa liberal crowdbyignoringthe cries of Christiangroupsandthe conservative consumers. LiberalsputWalmartas the No.1 companyonthe Fortune 500 that isthe worst forAmerica (Matthews,2016). Theyalso rankeditas firston a listof companiesinthe Fortune 500 theywould like shutdownInsteadtoadd more of a liberal crowd,theyshouldappeal tothese consumersand add more storesinmore liberal states (Matthews,2016).However,the amountof liberal democrats that shopat Walmart has risenanimpressive 18percent,makingthemanew targetto appeal to. One majorplace to appeal to is San Franciscois the mostliberal cityinAmerica(Forbes, n.d).There isalso noWalmart locatedinSan Francisco(Ausick,2014). The closestWalmartto the liberal cityis half an hour awayinSan Leandro(TripAdvisor,2005). Alsoto appeal more to liberal customers, and to fitinwiththeirviews,itwouldbe recommendedtostopthe sellingof guns.Asa part of Walmart's goal of sellingfirearmsprimarilyforthe purposesof huntingandsports,itdoesnotsell handguns,a policy thatdatesback to 1993 (Lee,2015). However,anysellingof goalsdoesnotfit intothe liberal agenda.Inorderto getconsumersof all demographics,andnotjustconservative onesitis recommendedthatWalmartopensstoresinmore liberal placesandstopsthe sellingof huntingguns.
8 140059924 Competitor’s Recommendations Whena Walmart comesto town, the local economicframework thrownintoturmoil (Wolf-Mann, 2016). Many small and regional businessesgettrampledbythe low pricesmade possiblebythe massive economiesof scale of the giantretailer (Wolf-Mann,2016).It’snearlyimpossible forthese small businessestocompete (Wolf-Mann,2016).However,whateveryarticle thatmentions Walmart monopolizingtalksaboutin“small towns”.WhichiswhyarecommendationforWalmart wouldbe to stopgoingintosmall townsandmonopolizing,butinsteadmove tobiggercitieswhere there isalreadya highcompetition anyway. Thisrecommendationwouldalsofitintoexpandinginto more liberal cities,suchasSanFrancisco. Conclusion Despite Walmart’ssuccessitisevidentfromthisreportthatithas takena lotof unethical approacheswhile beinganestablishedbusiness. While itisupto eachbusinesshow theyperform ethically,itisclearthatWalmart’sperformance ismostlybasedonunethical practices.These unethical practiceswere showninthisreportthroughalook at stakeholdersandethical challenges. ThisreportconcludedwithrecommendationsthatWalmartcouldfeasiblymake if theychose amore ethical approachto theirfuture success.
9 140059924 References Ausick,P.(2014) Eight LargestCities WithoutWalmart [Internet].Available from http://247wallst.com/retail/2014/06/16/eight-largest-cities-without-walmart/ [Accessed3rd January 2017]. Basker,E. (2007) The Causesand Consequencesof Walmart’sGrowth. University of Missouri,1 (1) pp.2-26. Berman,J. (2013) WalmartPAC,Walton Family Political ContributionsFavorConservatives:Report [Internet].Availablefrom http://www.huffingtonpost.com/2013/06/18/walmart-political- contributions_n_3461267.html [Accessed2ndJanuary2017]. Boatright,J.(2014) Ethics and the Conductof Business.Harlow,PearsonEducationLtd. Bowie,N.andWerhane,P.(2005) ManagementEthics.Malden,Blackwell PublishingLtd. Brownstein,B.(2004) Is It Ethical to Shop atWal-Mart?[Internet].Available from https://www.scu.edu/ethics/focus-areas/business-ethics/resources/is-it-ethical-to-shop-at-walmart/ [Accessed2nd January2017]. Brunn,S. (2006) WalmartWorld. NewYork,Routledge. BusinessPractices(2015) Walmart UnethicalBusinessPractices [Internet].Available from http://cnbc-tvn-biznes.com/unethical-business-practices/walmart-unethical-business-practices/ Carr, A. (1968) IsBusinessBluffing Ethical? [Internet].Availablefrom https://hbr.org/1968/01/is- business-bluffing-ethical [Accessed30thNovember2016]. CNN Wire (2016) Walmart to Pay $7.5 Million Settlementin Discrimination Suit [Internet].Available fromhttp://ktla.com/2016/12/02/walmart-to-pay-7-5-million-settlement-in-discrimination-suit/ [Accessed22nd December2016]. Collins,J.(1994) Is BusinessEthicsAnOxymoron? BusinessHorizons. Crane,A.and Matten, D. (2004) BusinessEthics. Oxford,OxfordUniversityPress. Crofoot,A.(2013) Wal-Mart: RollingBackon Ethics. Nueman Edu. Curry,E. (2002) Investorgroup chargesWal-Martwith promotion of pornography [Internet]. Available fromhttp://www.bpnews.net/14074[Accessed 19thDecember2016]. De Cremer,D.(2013) BusinessEthics: Black, White or Grey? [Internet].Available from https://www.london.edu/faculty-and-research/lbsr/business-ethics-black-white-or- grey#.WD6rSuaLSUk [Accessed 30th November2016]. DeGeorge,R.(1995) BusinessEthics. 4th ed.New Jersey,Prentice Hall. Featherstone,L.(2005) Wal-Mart'swomen -- employeesand customers -- in unhealthy relationship [Internet].Availablefrom http://www.seattlepi.com/local/opinion/article/Wal-Mart-s-women- employees-and-customers-in-1162992.php [Accessed3rdJanuary2017].
10 140059924 Ferrell,O., Hirt,G.,and Ferrell,L.(2015) Business.4th ed.New York,McGraw Hill Education. Financial Times(2016) Definition of ethical decision making [Internet].Available from http://lexicon.ft.com/Term?term=ethical-decision-making[Accessed19th December2016]. Fishman,C.(2006) The Wal-Mart Effectand a DecentSociety:WhoKnew ShoppingWasSo Important?Academy of ManagementPerspectives, 20(3). Fisherman,C.(2003) The Wal-MartYou Don'tKnow [Internet].Available from https://www.fastcompany.com/47593/wal-mart-you-dont-know [Accessed16thDecember2016]. Forbes(n.d) TheMostand Least ConservativeCitiesin America [Internet].Available from http://www.forbes.com/pictures/gmli45egf/the-most-and-least-conse/#bfce10ac3975 [Accessed3rd January2017]. Frick,A. (2006) IsWal-Marta corporatemonopoly? [Internet].Availablefrom http://www.the- dispatch.com/news/20060126/is-wal-mart-a-corporate-monopoly [Accessed3rdJanuary2017]. Friedman,M.(1970) The Social Responsibilityof BusinessistoIncrease itsProfits.TheNew York Times Magazine. Gaille,B.(2014) 41 Interesting WalmartShopperDemographics [Internet].Availablefrom http://brandongaille.com/41-interesting-walmart-shopper-demographics/ [Accessed30th December 2016]. Ghillyer,A.(2008) BusinessEthics: A Real World Approach.New York,McGraw-Hill Irwin. Goodpaster,K.(1991) BusinessEthicsandStakeholderAnalysis. CambridgeUniversity Press,1(1). Gustafson,K.(2016) Wal-Martis gobbling up its competitors'lunch—and itisn't going to stop [Intnernet].Available from http://www.cnbc.com/2016/09/12/wal-mart-is-gobbling-up-its- competitors-lunch-and-it-isnt-going-to-stop.html[Accessed30thDecember2016]. Hallmark(2016) AboutHallmark [Internet].Available from http://corporate.hallmark.com/Company [Accessed29thDecember2016]. Hartung, A.(2016) The 10 Telltale SignsThat the FutureLooksBad forWal-Mart[Internet].Available fromhttp://www.forbes.com/sites/adamhartung/2016/02/24/the-10-telltale-signs-that-the-future- looks-bad-for-walmart/#51084e483f1d [Accessed19th December2016]. Hill,C.(2015) 4 reasonsWalmartis the most-hated retailerin America [Internet].Availablefrom http://www.marketwatch.com/story/4-reasons-walmart-is-the-most-hated-retailer-in-america- 2015-02-18 [Accessed22ndDecember2016]. Is WalmartBad for America(2004) PBSFrotline. UnitedStates,PBS,16 November. Kasperkevic,J.(2015) 'Povertypay' leadsWalmartemployeestoskiplunch –or steal it from coworkers[Internet].Available from https://www.theguardian.com/business/2015/nov/12/walmart-workers-protest-wages-fast-for-15- stolen-lunches [Accessed2ndJanuary2016]. Kelley,B.(1999) Ethics atWork. England,GowerPublishingLtd.
11 140059924 Knauss,D. (2010) The Role Of BusinessEthics In RelationshipsWith Customers [Internet].Available fromhttp://www.forbes.com/2010/01/19/knauss-clorox-ethics-leadership-citizenship-ethics.html [Accessed12thDecember2016]. Lee,M. (2015) Why Walmartwill keep selling guns [Internet].Available from http://edition.cnn.com/2015/06/25/politics/walmart-guns-confederate-flag/[Accessed3rd January 2017]. Majoch, A.,Hoepner,A.andHebb,T. (2014) Sourcesof StakeholderSalience inthe Responsible InvestmentMovement:WhyDoInvestorsSignthe PrinciplesforResponsibleInvestment?. Henley Discussion PaperSeries, pp.2-33. Matthews,C.(2016) Here Are the Fortune500 CompaniesLiberalsand ConservativesHatetheMost [Internet].Availablefrom http://fortune.com/2016/06/06/fortune-500-conservatives-liberals-love- hate/ [Accessed3rd January 2017]. Melville-Ross,T.(2013) Ethical business:companiesneed to earn ourtrust [Internet].Available from https://www.theguardian.com/sustainable-business/ethical-business-trust-values[Accessed22nd December2016]. Mitchell,R.Agle,B.and Wood,D. (1997) Towarda theoryof stakeholderidentificationand salience:definingthe principle of whoandwhatreallycounts. Academy of Management Review, 22, (4), pp.853–886. Morillo, J.,McNallly,C.,andBlock,W. (2015) The Real Walmart. Journalof theCentre forBusiness Ethics, 120 (3). Newton,L.(2005) BusinessEthics and the NaturalEnvironment.Malden,Blackwell Publishing. Osterndorf,C.(2015) 10 reasonsWal-Martisthe worstcompany in America [Internet].Available from http://www.salon.com/2015/05/25/10_reasons_wal_mart_is_the_worst_company_in_america_par tner/ [Accessed30th December2016]. Owens,C.(2016) Wal-MartCAN afford $15 minimumwage [Internet].Availablefrom http://www.cnbc.com/2016/06/03/walmart-can-afford-15-minimum-wage-commentary.html [Accessed28thDecember2016]. Peterson,H.(2014) MeetThe AverageWal-MartShopper[Internet].Available from http://www.businessinsider.com/meet-the-average-wal-mart-shopper-2014-9?IR=T[Accessed30th December2016]. Pratley,P.(1995) The Essenceof BusinessEthics. Hertfordshire,Prentice Hall International. PR Newswire(2002) Timothy Plan MutualFund Group DenouncesWal-MartFor'Promotion Of Pornography'[Internet].Available from http://www.prnewswire.com/news-releases/timothy-plan- mutual-fund-group-denounces-wal-mart-for-promotion-of-pornography-76738487.html [Accessed 2nd January2017].
12 140059924 Pyle,S.(2014) Letter to the Editor:Wal-Mart’sconceptof businessethics [Internet].Available from http://www.wsusignpost.com/2014/09/07/letter-to-the-editor-walmarts-concept-of-business- ethics/ [Accessed16th December2016]. Reuters(2016) Profile: Wal Mart StoresInc[Internet].Available from http://www.reuters.com/finance/stocks/companyProfile?symbol=WMT.N [Accessed19th December 2016]. Rosen,E. (2006) Walmart:The NewRetail Colossus.In:Brunn,S.ed. WalmartWorld. New York, Routledge,pp.91-97. Scheiber,N.(2016) WalmartSettles Discrimination Suit Over BenefitsforSame-Sex Spouses [Internet].Availablefrom http://www.nytimes.com/2016/12/02/business/walmart-same-sex- discrimination-lawsuit.html?_r=0[Accessed3rd January 2017]. Sellers,J.(2005) Deliver Us fromWal-Mart?[Internet].Available from http://www.christianitytoday.com/ct/2005/may/17.40.html [Accessed2ndJanuary2017]. Sethi,S.(2013) The World of Wal-Mart[Internet].Available from http://www.carnegiecouncil.org/publications/ethics_online/0081 [Accessed30thDecember2016]. Stark,A. (1993) What’sthe Matter withBusinessEthics? Harvard BusinessReview. Stavros,K. (2014) Unethical Actsin Wal-martCorporation [Internet].Available from https://pittbusinessreview.wordpress.com/2014/11/19/unethical-acts-in-wal-mart-corporation/ [Accessed 30th December2016]. Store Wars- WhenWalmart ComestoTown (2010) UnitedStates,PBS,October11th . Surbhi,S.(2015) DifferenceBetween Internaland ExternalStakeholders [Internet].Available from http://keydifferences.com/difference-between-internal-and-external-stakeholders.html [Accessed 5th December2016]. The AssociatedPress(2016) Walmartto Deliver Pay RaisesNextMonth [Internet].Available from http://www.nytimes.com/2016/01/21/business/walmart-to-deliver-pay-raises-next- month.html?rref=collection%2Ftimestopic%2FWal- Mart%20Stores%20Inc.&action=click&contentCollection=business&region=stream&module=stream _unit&version=latest&contentPlacement=30&pgtype=collection [Accessed19th December2016]. Trip Advisor(2005) ClosestWalMartto San Francisco (City Centre) [Internet].Available from https://www.tripadvisor.co.uk/ShowTopic-g60713-i30-k131103- Closest_WalMart_to_San_Francisco_City_Centre-San_Francisco_California.html [Accessd3rd January2017]. Walmart (2016) AboutUs [Internet].Available from http://corporate.walmart.com/our-story [Accessed16thDecember2016]. Weiss,J.(2014) BusinessEthics: A Stakeholderand IssuesManagement Approach. SanFrancisco, Berrett-KoehlerPublishers,Inc.
13 140059924 Wells, N.(2015) Shopping atWal-Mart?You mightbe a Republican [Internet].Available from http://www.cnbc.com/2015/10/14/shopping-at-wal-mart-you-might-be-a-republican.html [Accessed30thDecember2016]. Wolf- Mann, E. (2016) The NewWay That WalmartIs Ruining America’sSmall Towns [Internet]. Available fromhttp://time.com/money/4192512/walmart-stores-closing-small-towns/ [Accessed3rd January2017]. Zogby,J. (2015) The Weekly Wal-MartShopper:DemocratOrRepublican? [Internet].Available from http://www.forbes.com/sites/johnzogby/2015/08/14/the-dramatic-democratization-of-the-weekly- wal-mart-shopper/#331cb0a22474 [Accessed5th January2017].

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Business Ethics Assignment

  • 1.
    0 140059924 Module Code 3BM150Module Title Business Ethics Level BA Module Tutor Peter Watt Credit Value of Module 20 Feedback Process Type of Submission Electronic upload to Moodle using Turnitin Expected Feedback Date By 5PM, 26/1/17 Assessment Task A critical review essay Weighting 75% Word Count 3733 Due Dates (Published Deadlines) Formal summative assessed essay Deadline Thursday 5 January 2016, by 5pm Assessment Regulations
  • 2.
    1 140059924 YORK ST JOHNUNIVERSITY 140059924 THE UGLY TRUTH: ETHICAL BUSINESS IN WALMARTS IN WALMART
  • 3.
    2 140059924 Contents Introduction.................................................................................................................................1 Business Ethics- AnOverview........................................................................................................1 Grey Area.................................................................................................................................2 Walmart Brief Overview................................................................................................................ 2 Stakeholder Analysis..................................................................................................................... 2 Employees................................................................................................................................ 3 Consumers................................................................................................................................ 3 Competitors.............................................................................................................................. 4 Ethical Challenges......................................................................................................................... 5 Employeesand Mistreatment....................................................................................................5 Consumers and Conservative Ways............................................................................................ 6 Competitors and Monopolizing..................................................................................................6 Recommendations........................................................................................................................ 7 Employee’s Recommendations...................................................................................................7 Consumers’ Recommendations..................................................................................................7 Competitor’s Recommendations ................................................................................................ 8 Conclusion ...................................................................................................................................8 References...................................................................................................................................9 I Eloise Shaw declare thatI am the sole authorof thisassignmentandthe workis a resultof my own investigations,exceptwhere otherwise stated.All referenceshave beendulycited
  • 4.
    0 140059924 ASSESSMENTand gradingCRITERIA Assessed Components A* AB C D F (fail) F (fail) 0 (100-85) (84 - 70) (69 - 60) (59 - 50) (49 - 40) (39 -20) (19 - 1) F (0) Knowledge & Understanding Workofoutstandingperformance Excellent understanding of a w ide range of ideas Comprehensive literature review that makes a clear attempt to cover as much of the field as possible w ithin the constraints of space Excellent relevant, correct and comparative use of a range of theories w ith excellent ability to develop & support an argument lining to theory and academic discussions. Very good understanding of a range of ideas Literature review which covers main authorities and includes up to date sources froma range of authorities including recent journal articles. Very good relevant and correct use of a range of theories w ith very good ability to develop and support an argument lining to theory and academic discussions. Good understanding of relevant ideas Literature review appears to cover main authorities but lacks depth and not clearly linked w ith present study. Use of a few journalarticles Good relevant and largely correct use of a range of theories and models w ith good ability to develop & support an argument lining to theory and academic discussions. Fair understanding of a few relevant ideas Literature review lacking in range and scholarship. Limited to text books and w ebsites. Adequate use of theory/model but w ith many errors in understanding of the key principles. Subject know ledge is poorly demonstrated Literature review is limited and does not link to the assessment brief Limited use of theory/model, w ith demonstration of substantial errors in understanding Non serious attempt No or very poor Literature review or not related to study Fails to identify ANY relevant theory/models and principles to the selected organisations. Workofnoorlittlevalueoorrleveancetotheassignmentbrief Analysis & Evaluation Excellent ability to analyse, evaluate, compare and construct values Analyticaland comparative w ith substantive links to research data and Accurate analysis and very good evaluation Predominantly analyticalw ith good links to research data and Good analysis and sound evaluation Predominantly descriptive but some evidence of analytical thought, w ith good know ledge base, and good interpretation Fair analysis w ith some evaluation Complete but w holly descriptive, w ith adequate know ledge Weak analysis and evaluation Wholly descriptive and incomplete. Lacking in Non-serious attempt No or very limited analysis and evaluation Wholly descriptive w ith MAJOR key omissions, w ithout any understanding of
  • 5.
    1 140059924 development of coherent academic discussionswith excellent understanding and detailed know ledge base, and excellent interpretation and application of theory to evaluate the impacts and benefits of business ethics. development of coherent academic discussions with very good know ledge base, and very good interpretation and application of theory to evaluate the impacts and benefits of business ethics. and application of theory to evaluate the impacts and benefits of business ethics. base, and adequate interpretation and application of theory to evaluate the impacts and benefits of business ethics. understandin g. Poor know ledge base. Poor interpretation and application to given issue. the topic. No evaluation or evidence of critical thinking. Research& Enquiry Rigorous and sustained enquiry w ith excellent outcomes Excellent range of appropriate sources including journal articles, books and alternative sources Accurate and consistent enquiry using appropriate methods Very good range of appropriate sources including journal articles, books and alternative sources Consistent approach draw ing on a range of sources Good range of appropriate sources including journal articles, books and alternative sources Relevant methods of enquiry w ith some inconsistencies Range of sources used but over reliance on w ebsites and low er level sources or few sources used Little evidence of research or understanding of appropriate approaches Some sources used but over reliance on w ebsites and lower level sources Non serious attempt Too few sourcesused Presentation & Referencing Technically excellent, accurate referencing and presentation Excellent presentation and structure following guidance provided Excellent application of Harvard system w ith no missed citations and Accurate and consistent referencing and presentation Very good presentation and structure following guidance provided Very good application of Harvard system w ith few missed citations and complete bibliography / reference list Good referencing and consistent approach to conventions Good presentation and structure follow ing guidance provided Good application of Harvard system w ith some missed citations and limited bibliography / Fair understanding of conventions Adequate presentation and structure following guidance provided Poor application of Harvard systemw ith errors Poor referencing and little understanding of conventions Poor presentation and structure not follow ing guidance provided Failure to follow Harvard Non serious attempt No attempt to reference
  • 6.
    2 140059924 complete bibliography / reference list referencelist errors Communication Excellent ability to communicate ideas clearly and appropriately Excellent and fluent communication, follow ing a logical sequence of thought, w ell indexed and linking sections to produce a quality report. Very good ability to communicate ideas clearly Very good & fluent communication, follow ing a logical sequence of thought. Well- indexed and linked producing a very good quality report. Most Ideas communicated effectively Good presented and structured report that follow ssome sequence. Would benefit frommore definite links to sections. Ideas are communicated w ith some success Adequately presented and structured report, but w orklacks creativity in presentation and seems semi structured. Ideas are not communicated effectively Poorly presented w orkwith few evidence of any logical though or sequence. Unstructured report w ith no definitive sections Non serious attempt Failure to meet the key requirements of the assignment brief.
  • 7.
    1 140059924 Introduction Ethical businesspractice isastandardsocietysetsforall businessestofollow. Ultimatelyhow businessespreformethicallyisuptotheirown definition of ethics.Thisessayisgoingtocritically lookat what businessethicsmeansandhow businesses preformunderit.Tobest examine atan example of businessethicsthisessayisgoingtofocuson the US corporationof Walmart. Thisessay will analyse Walmart’s businessethicswiththreeof itsstakeholders:competitors,employees,and consumers. The ethical issuessurroundingWalmartwill be shownthroughexamplesof challenges and issuesthatWalmarthas facedas a corporationinrecentyears.Aftercriticallylookingathow Walmart hasperformedethically,recommendationswill be made inthe formas advice for company inthe future. Business Ethics- An Overview Businessethicsare the principlesandstandardsthatdetermineacceptable conductinbusiness organisations(Ferrelletal,2015). Businessethicshasbeenstatedasbeinganoxymoron.the perceptionthatbusinessandethicsare contradictory isbasedonthe general acceptedviewof what managersare supposedtodoand therefore how theyare supposedtoact(Collins,1994). Business ethicsadaptsthe methodsandpurpose of normative ethicsto the specificrequirements of moral issuesinbusiness(Pratley,1995) To determineethical limits, businesses nolongerrelyon theirown moral values(De Cremer,2013). Businessesnow checkthe existinglawsandrulestosee whatisnot legallyacceptable(De Cremer,2013).The advantage of thisapproachis that if the law doesnot mentionthatitis notacceptable thenbydefinitionitshouldbe acceptable forbusinesses(De Cremer,2013). Businessethicsisprimarilyconcernedwiththose issuesnotcoveredbythe law,or where there isnodefinite consensuson somethingbeingrightorwrong(Crane andMatten, 2004). Most executivesfromtime totime are almostcompelled,inthe interestsof theircompaniesor themselves,topractice deceptionwhennegotiatingwithcustomers,dealers, labourunions, governmentofficials,orevenotherdepartmentsof theircompanies (Carr,1968). By conscious misstatements, hiddenfacts,orexaggeration,theseexecutives seektopersuade otherstoagree withthem(Carr,1968). A “responsibility perspective”onanyfieldof ethicscombinesaclaimof value withatendencytoevaluate the situations,policiesandpracticesthatfall withinthe fieldina certainthe way (Newton,2005). If the majorityof these companiesare actingunethical andnot takingresponsibility, whatisthe issue?Tocompaniesandemployers,actinglegallyandethically meanssavingbillionsof dollarseachyearinlawsuits,settlementandtheft(Weiss,2014). One way of businessesbeingethical isthroughcorporate social responsibility. Corporate social responsibilityreferstothe capacityof a corporationto respondto social pressuresethically (Crane and Matten,2004). Carroll (1979) defined the fourcategoriesof CSRincorporate social performance,depictingthemasorderedlayerswhichhe labelledeconomic,legal,ethical and discretionaryresponsibilities(Visser,2005). However,MiltonFriedmanarguesthatabusinessisnot responsible forbeingethical. The responsibilityof businesses istoconductthe businessin accordance withtheirdesires,whichgenerallywill be tomake as muchmoneyas possible while conformingtothe basic social rulesof the society,boththose embodiedinlaw andthose embodied inethical custom (Freidman,1970).The doctrine of social responsibilityisfrequentlyacloakfor actionsthat are justifiedonothergroundsratherthana reasonfor those actual actions (Freidman, 1970). All businessorganisationsface the challengeof meetingthe higheststandardsof ethicswhile also,remainingcompetitive andprovidingthe productsand servicesthe publicdemands(Boatright, 2014).
  • 8.
    2 140059924 Grey Area BusinessEthicsissaidto beginwhere the law ends(Crane andMatten,2016). Businessethicsis primarilyconcernedwiththose issuesnotcoveredbythe law or where there isnodefinite consensusonwhethersomethingisrightawrong- a grey area as showninFigure 1 (Crane and Matten,2016). There are managementpracticesthatalsoappearto benefitmanagersatthe expense of stockholdersand occasionally othercorporate stakeholders(BowieandWerhane, 2005). Ethics Grey Area Law (Figure 1, authorown,adaptedfrom:Crane and Matten,2016) Walmart Brief Overview Today,nearly260 millioncustomersvisitmore than11,500 storesunder63 bannersin28 countries and e-commerce sitesin11countrieseachweek (Walmart,2016). The Walmart U.S. segment operatesretail storesinthe UnitedStates,includinginapproximately50states,WashingtonD.C. and PuertoRico (Reuters,2016). Ninety percentof USresidentslivewithin15milesof a Walmart (Fishman,2006). Walmart continuestobe the largestretailerinthe worldwithreportedrevenues of approximately$469 billion forfiscal yearendingJanuary2013 (Morilloetal,2015). Despite its publicrecognitionand prevalence throughoutthe U.S,Walmartisamongone of the least-admired corporations inthe world(Ghillyer,2008). The reasonbehinditsunpopularitycanbe lookedat throughthe stakeholderanalysis andbythe ethical challengesthiscompanymeets. Stakeholder Analysis Whenbusinesses actunethical,they riskstakeholder’sinterests.A stakeholderinabusinessisany groupor individual whocanaffect,orisaffectedby,the achievementof the organization’s objectives(CraneandMatten,2004). Three of Walmart’smost crucial stakeholdersare there employees,customersandcompetitors. A highlysalientstakeholderpossessesall three attributes: power,legitimacy,andurgency(Griseri andSeppala,2010). The attributesare dynamicinthe sense that a stakeholdermaybecome more orlessimportantfora companyas a resultof a change inthe extenttowhichtheyhave one or more of these attributes(Griseri andSeppala,2010). POWER LEGITIMACY URGENCY (Figure 2,author own,adaptedfrom:Mitchell etal,1997)
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    3 140059924 The model aboveisa representationof stakeholderimportance adaptedfromMitchell. Powerconcernsthe normative means thata stakeholderhasat theirdisposal toexertinfluence on management(Majochetal,2014). Legitimacyisgeneralizedassumptionthatthe actionsof anentity are appropriate withinasociallyconstructedsystemof norms,values,beliefs,and definitions (Mitchell etal,1997). Urgencyrefersto the degree towhichthe claimisperceivedbymanagement as callingforimmediate attention(Majochetal,2014). The yellow circle representscustomers,the blue circle representscompetitorsandthe greencircle representsemployees.Itwill be further explainedwhyeach stakeholderisplacedinthese sections throughoutthe report. Employees Labour isnot simplyacommoditytobe boughtand sold,eventhough ithasbeen arguedthat wages are defensiblydeterminedbythe market,inasystemwithproperandjustbackground institutions (DeGeorge,1995). Labourderivesfromhumanbeings,andhumanbeingsholdrights,whichtheydo not give upby becomingemployees(DeGeorge,1995). Walmart employs2.3millionassociates worldwide –1.5 millioninthe U.S.alone,makingtheiremployee stakeholdera significantly large groupof people (Walmart,2016). Over300,000 associateshave been employedby Walmartfor10 yearsor more (Walmart,2016). Two thirds of Walmart workers cannotaffordto participate inthe companyhealthinsurance plan,whichcostsabout20 percent of a worker’spaycheck (Brownstein, 2004). Walmart employeesare notallowedtobe a part of unions(Clark, 2007). Walmart’spolicyisto oppose unionsand fighteffortsof unionization(Rosen,2006).To keepWalmartnon-union,when employeesare hiredtheyare immediatelyshownananti-unionvideo(Rosen,2006). Thisis a factor inwhy employeeshave suchalow wage (Crofoot,2013). The unionizedretailworkersinthe United Statesthat do notwork at Walmarton average make 25 percentmore annuallythanthose employeesthatworkthe same jobat Walmart (PBS,2010). Consumers In orderto trulydeveloptrustwiththeircustomers,companiesmust “walkthe walk”(Knauss,2010). For example,anyactivity engagedinwithcustomerswill be fairanddefensible,noexceptions (Knauss,2010). Demographics of consumers at Walmart A studyin2000 by AndrewFranklin,showedthatWal-Martoperatedprimarilyinpoorandworking- classcommunities,finding,inthe bone-drylanguage of hisdiscipline,"asignificantnegative relationshipbetweenmedianhouseholdincome andWal-Mart'spresence inthe market” (Featherstone,2005). Accordingto the data, the average Wal-Mart shopperisa white,50-year-old female withanannual householdincome of $53,125 (Peterson,2014).Only37% of Walmart consumersownedapassportbut 54% owneda gun (Zogby,2015). 1 outof every5 Walmart shoppersusesfoodstampsinorderto meettheirbasicneedsinsome way(Gaille,2014).
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    4 140059924 Political Party ofWalmart Customers Republican Democrat Independent Race of Walmart Customers White African American Hispanic (Figure 3, authorown, adaptedfrom: Zogby, 2015) (Figure 4, authorown, adaptedfrom: Zogby, 2015) ConsumerSatisfactionwith Walmart In 2015, Walmart scoreditsworst customersatisfactionratingsince 2007, securingthe bottomspot on AmericanCustomerSatisfaction Index’sretail customerservice ranking(Hill,2015).In 2011, 2012 and 2013, Walmart was the single lowest-scoringdepartmentanddiscountstore onthe list (Hill, 2015). (Figure 5,source:Hill,2015) Competitors Walmart dominatesthe retail industryasitofferssome of the lowestpricesforproductsand servicesothercompaniescannotaffordtooffer(Pyle,2014). PBS Frontline (2004) reportedthatSam Walton’sformulawasbuycheap,sell lessthanthe otherguy,andmake yourprofitonhighvolume and fastturnover. It doesmore businessthan competitorssuchas Target, Sears,Kmart,J.C.Penney, Safeway,andKrogercombined (Fishman,2003). As a store,Walmartis notjust the largest;itno longerhasany nearrivals. Walmartis as bigas Home Depot,Kroger,Target,Costco,Sears,and Kmart combined (Fishman,2006).Target, whichisconsidered Wal-Mart’snearestdirectrival issmall by comparison (Fishman,2006).Each year Walmartsellsmore bySaintPatrick’sDay,March 17, than Target sellsall year(Fishman,2006).Inmany categoriesof productsthatit sells, Walmartisnow 30
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    5 140059924 percentor more ofthe entire market(Fishman,2006). Walmart sellsmore than30 percentof the skincare andhaircare products usedinthe UnitedStatesandmore than30 percentof small kitchen appliances,housewares,andtoyssold inthe country(Fishman,2006). Ethical Challenges An ethical issue isanidentifiableproblem, situation,oropportunitythatrequiresapersontochoose fromamong several actionsthatmaybe evaluatedasrightorwrong,ethical or unethical (Ferrellet al,2015). Inbusiness,suchachoice ofteninvolvesweighingmonetaryprofitagainstwhataperson considersappropriate conduct(Ferrell etal,2015). The bestway to judge the ethicsof a decisionis to lookat a situationfroma customer’sorcompetitor’sviewpoint,asthisfollowingsectionwill explain(Ferrelletal,2015). Employees and Mistreatment One ethical issue Walmartiscriticizedforisthe compensationtheypay workers.The average annual salaryfor a Walmart salesassociate in2001 was US$13,861 and the average hourlywageswas US$8.23 (Ghillyer,2008). The primaryreasons for Wal-Martlow wagesis because theywanttocut operatingcostsand theywant to continue offeringlow prices(BusinessPractices,2015). Walmart employeesare sopoorthat theyare skippinglunch,sharingitor,insome cases,stealingitfromtheir co-workers,some of the company’sworkersclaimed(Kasperkevic,2015). While itseemsrespectable thatWalmartemploysmore thananyotherprivate employerinthe UnitedStates,itisunfairthat 90% of the store’s managerpositions are heldbymen (Ghillyer,2008). In the UnitedStates, since 2005, Walmarthas paidabout $1 billionindamagestoU.S.employeesin six differentcasesrelatedtounpaidwork (Sethi,2013). In 2013, itwas notedthat eventhough womenaccountfor 57% of Walmart’sworkforce inthe US theywere still gettingpaid$1.16 lessper hour (Osterndorf,2015).Alsomultiplefemale workershave come forwardsayingtheywere overworked,firedorputindangeroussituations byWalmartwhile beingpregnant(Osterndorf, 2015). These casespointtowardWalmart takingmore of the “Friedman”approachinthat itsmain responsibilityistomake a profitnomatter the cost. Asof 2016, aftermanyprotests,Walmart agreedto payemployees $10 an hour (Owens,2016).But a full-time employee working34 hoursa weekfor$10 an hour still onlyearns$18,000 a year,below the national povertyline foranaverage familyof four(Owens,2016).Howeverdue tothe company’sstronganti-unionstance itmakesit harderfor employeestofightback(Kasperkevic,2015). Thisis whyemployeesfall underthe under the urgentand legitimatepartof the salience model.The poorwage,lackof benefits,andsexism reportsand legitimatecausesof concernwithanurgentneedtobe addressedbyWalmart. Same Sex Couple VS WE A case of discrimination occurredin2015 whena Walmart employee suedthe retailer,sayingits previouspolicyof denyinghealthinsurance tothe spousesof gayemployeesviolatedgender discriminationlaws(Reuters,2015). Employee,Jackie Cote,whohasworkedatWalmartstoressince 1999, saidinthe lawsuitthatherwife developedcancerin2012 and the denial of insurance ledto more than $150,000 inmedical debt (Reuters,2015).Ms. Smithsonisnow inhospice care,Ms. Cote said(Reuters,2015). A Walmartspokesmansaidthatthe company’sbenefitscoverage before the 2014 change was legal,howeverthisdoesnotmake itethical,thisputsitina greyarea. Walmart set aside $7.5 million,tocompensate employeesaffectedbythe denial of spousal benefitsduringthe three yearsbefore Jan.1, 2014, whenthe companychangeditspolicy(Schieber,2016). Walmart expected “nomore thana fewthousand”people to be eligibleforthe settlement(CNN Wire,2016).
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    6 140059924 Consumers and ConservativeWays Today, 56 percentof citizenspolled believe that“Walmartisbad forAmerica”(Morilloetal,2015). Residentsof statesthat votedMittRomneyinthe 2012 Presidential Electionwere more likelyto patronize one-stopshopssuchasTargetand Walmart (Wells,2015). Due to Walmart’samountof RepublicanandIndependant customersasshowninfigure 1 part of Walmart’ssalesstrategyisto protectthe image of itsstoresas “familyorientated”(Brunn,2006). Alsoof all the donationsmade by bothWalmart’sPACand the Waltonfamilysince the 2000 Presidential Election,nearly70percent wentto Republicancandidatesandcommittees (Berman,2013). RecentlyWalmartstoppedthe sellingof confederate flags,however theykeep sellingguns(Lee,2015).It isnotoriously knownfor protectingconsumersfromproductsthatthe managementdeemsoffensive,astrategytokeepwith the conservative campaignto“protectfamilyvalues”(Brunn,2006). A Christianorganisation, The TimothyPlan,showedoutrage atwhatWalmart wasselling(Brunn,2006). The TimothyPlan PresidentArthurAllydemandedWalmartremove copiesof the magazine Cosmopolitancallingit “most blatantlyaggressive soft-core pornographicmagazine inAmerica”(Curry,2002). Allysaidhe foundWalmart'spositiononCosmopolitanmagazine incongruouswithitsWebsite-statedpolicies regardingitsrefusal tostockmusicwithparental guidance stickersanditsrestrictionof the sale of "mature-rated"videogamestocustomers17 yearsof age and older(PRNewswire,2002). Walmart has implementedpoliciesagainstliterature itdeemsoffensive,takingaway men’smagazineslike Maximand Stuff fromthe storesracksalongwithgay publicationssuchas Out(Brunn,2006). With magazinessuchas Glamour,MarieClaire andCosmopolitan theyare obscuredwithbinders(Brunn, 2006). By Walmart now coveringthese magazines,showsthe powerthatconsumershave overthe companyand whytheyare placedinthe powersectionof the salience model. Competitors and Monopolizing That kindof dominance Walmarthas at bothendsof the spectrum— dominance acrossahuge range of merchandise anddominanceof geographicconsumermarkets—meansthatmarketcapitalismis being“strangledwiththe kindof slowinexorabilityof aboa constrictor”(Fishman,2006). Although Walmart providesjobsformore than1 millionpeople inthe UnitedStates,ithashelped putlocal drugstoresandgrocers onthe brinkof bankruptcy (Frick,2006). While ina lot of ways,people see Walmart as an oligopoly,the way theydrive outcompetitionismonopolistic(Basker,2007). Walmart implementsastrategicpredatorypricingtacticinthattheydrop pricestoolow and drive away competition,thusgainingamonopoly(Starvos,2014).Many local communities criticize Walmart as a majorfactor in the dissolution of local businesses(Ghillyer,2008). WhenWalmart starts sellinggroceriesinanewarea, it brings lowerpricestoitsownshoppersand through competition,drivesdownthe pricesof establishedgrocerystores(Fishman,2006). Itisclear that Walmart can run smaller,family-runretail storesinthe areaout of business(Crofoot,2013). The so- called"Walmarteffect"iswhenWalmart,orany similarbig-boxretailer,movesintotown,reshapes shoppinghabits,anddrainsthe viabilityof traditional local shoppingareasor"mom-and-pop"shops (Fishman,2006). The average difference inWalmart’spricesverses competitor’s pricesvaryfrom8- 27% (Basker,2007). However,if someone securesajobwithWalmart,onaverage the individual will be are paid18 percentlessthanhe or she wouldbe at a family-runretailstore (Crofoot,2013). This wouldrepresenta“greyarea” forWalmart.This isalsowhy competitorsare placedinthe legitimate sectionof the salience model.Whiletheydonothave muchpower,andare not verypowerful,they have legitimatereasonstobe upsetwiththe wayWalmartis performingethically.
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    7 140059924 Recommendations Whenlookingatthe short term,ethicalbehaviourmayprove costlytoa company’s bottomline (Stark,1993). But accordingto the advocatesof corporate social responsibility,ultimatelythe marketwill rewardsuch behaviour,suchaswitha goodreputation(Stark,1993). Employee’s Recommendations As of now, Walmart hasmade in its effortstoofferbetterwagesandbenefitstoitsworkers (The AssociatedPress,2016). All of the evidencesuggeststhatWalmartcaneasilyaffordthisastheir minimumwage (Owens,2016).A $15 minimumwage wouldbe goodbusinessforWal-Mart(Owens, 2016). ResearchersatThe WhartonSchool findthat foreveryadditional dollarspentonpayroll ata givenstore,salescanincrease anywherefrom$4 to $28 (Owens,2016).This increase wouldalso helptaxpayersaswell asemployees(Owens,2016).Whenworkerscannot affordtomeettheirbasic needsdespiteworkingfull time,theyare forcedtoturn topublicassistance (Owens,2016). This meansthat companiesrelyontaxpayerdollarstosubsidize rock-bottomwages(Owens,2016). Walmart istrying, to incorporate physical exercise intoeveryemployee'sjobdescription,nottohelp the overweightgetinshape,buttostopthemapplyingforjobsinthe firstplace - intheirown words,"to dissuade unhealthypeople fromcomingtoworkat Wal-Mart",whichwouldsave them an estimated$1bna year inbenefits (Dowling,2005). Therefore, agoodwayof incorporatinghealth intoan employeesworklifeisbyrewardingthem, ultimately savingWalmartmoneyinthe longrun by nothavingto pay as muchfor healthcare (Dowling,2005). One companyWalmartcouldreallydo withmodellingitself afterisHallmark.Hallmarkisa$3.7 billionbusiness withmore than 40,000 retail storesacrossthe U.S. (Hallmark,2016). One ethical tactic Hallmarkdoes ishave an employee rewardsystem.Makingitpossible foremployeestoearnan additional $400 a year bythe Hallmark HealthRewardsProgram(Hallmark,2016). Employeesearnpointsformaintaininghealthyweight, bloodpressure andcholesterollevels(Hallmark,2016). Consumers’ Recommendations While alarge segmentof consumersof Walmartare republican,Walmartshouldappeal more toits liberal crowd.Withthe example of the organisation“The TimothyPlan”,itwouldbe more vital to expandtoa liberal crowdbyignoringthe cries of Christiangroupsandthe conservative consumers. LiberalsputWalmartas the No.1 companyonthe Fortune 500 that isthe worst forAmerica (Matthews,2016). Theyalso rankeditas firston a listof companiesinthe Fortune 500 theywould like shutdownInsteadtoadd more of a liberal crowd,theyshouldappeal tothese consumersand add more storesinmore liberal states (Matthews,2016).However,the amountof liberal democrats that shopat Walmart has risenanimpressive 18percent,makingthemanew targetto appeal to. One majorplace to appeal to is San Franciscois the mostliberal cityinAmerica(Forbes, n.d).There isalso noWalmart locatedinSan Francisco(Ausick,2014). The closestWalmartto the liberal cityis half an hour awayinSan Leandro(TripAdvisor,2005). Alsoto appeal more to liberal customers, and to fitinwiththeirviews,itwouldbe recommendedtostopthe sellingof guns.Asa part of Walmart's goal of sellingfirearmsprimarilyforthe purposesof huntingandsports,itdoesnotsell handguns,a policy thatdatesback to 1993 (Lee,2015). However,anysellingof goalsdoesnotfit intothe liberal agenda.Inorderto getconsumersof all demographics,andnotjustconservative onesitis recommendedthatWalmartopensstoresinmore liberal placesandstopsthe sellingof huntingguns.
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    8 140059924 Competitor’s Recommendations Whena Walmartcomesto town, the local economicframework thrownintoturmoil (Wolf-Mann, 2016). Many small and regional businessesgettrampledbythe low pricesmade possiblebythe massive economiesof scale of the giantretailer (Wolf-Mann,2016).It’snearlyimpossible forthese small businessestocompete (Wolf-Mann,2016).However,whateveryarticle thatmentions Walmart monopolizingtalksaboutin“small towns”.WhichiswhyarecommendationforWalmart wouldbe to stopgoingintosmall townsandmonopolizing,butinsteadmove tobiggercitieswhere there isalreadya highcompetition anyway. Thisrecommendationwouldalsofitintoexpandinginto more liberal cities,suchasSanFrancisco. Conclusion Despite Walmart’ssuccessitisevidentfromthisreportthatithas takena lotof unethical approacheswhile beinganestablishedbusiness. While itisupto eachbusinesshow theyperform ethically,itisclearthatWalmart’sperformance ismostlybasedonunethical practices.These unethical practiceswere showninthisreportthroughalook at stakeholdersandethical challenges. ThisreportconcludedwithrecommendationsthatWalmartcouldfeasiblymake if theychose amore ethical approachto theirfuture success.
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