course material

1. Business, Government and Society
Business, Government and SocietyPART A: Nonmarket issues that affect the industry and
companyWith the onset of globalization, competition between firms in the business
environment has been ever increasing. This has forced firms and organizations to devise
new ways of sustaining competitive advantages. One of the ways is by adopting a corporate
strategy that ensures that social, political and environmental issues are addressed
effectively. Business firms especially in the modern business environment are faced with
forces that act either within or outside the market system. These are factors that provide
order to the market. These issues have implications on various business policies of an
organization.Background of Wal-Mart StoresWal-Mart Stores Inc. is considered the largest
retail company in the US and it has been rated to be larger than any other retail chain the
world. Since its inception, the company has grown substantially. Currently, the company has
approximately 5,000 retail facilities both in domestic and international markets. Wal-Mart
dominates markets in the United Kingdom, Mexico and Canada. By total sales, Wal-Mart is
ranked the most powerful corporation in the world. The company provides general
merchandise such as health &beauty aids, fabrics, crafts, jewelry, electronics, household
needs and apparel among other things.Despite the numerous achievements, Wal-Mart is
faced with non-market issues that affect their business operations. Like other business
firms, Wal-Mart creates and distributes value. In its pursuit, the company is affected by a
plethora of actors informally through social pressure and activists’ efforts who tend to
influence the perception of the general public. In order to survive in the competitive market,
the company has always stretched its competitive playing field beyond market issues.
Currently, the company is on top of the game in the retail industry because of its ability to
address these issues. The firm has effective corporate and management strategies which
emphasize on handling all the nonmarket issues.Nonmarket Issues that Affect Retail
Industry and Wal-MartEvery business firms has social responsibilities to fulfill. They have
to adopt policies that ensure that these responsibilities. Like other industries, retail
industry is faced with a vast range of nonmarket issues that have far-reaching effect on their
businesses. The firm’ s business policies have led to negative environmental and labor
issues. There are numerous allegations that the firm’ s business policies adversely affect the
surrounding local community.Being the largest private employer in the US, Wal-Mart has
more 1.4 million associates. The company has a strong customer base estimated to be more
than 100 million. The firm has always focused on delivering quality products and services to
all these customers. Over time, Wal-Mart has successfully delivered products at relatively

2. low prices due to its efficient processes. It is reported that the company is currently growing
at rate of 15%, something which seems impractical in the modern business environment. As
such, this situation has attracted public attention. Consequently, a number of articles are
being published every day about the retail industry. Most of these articles are authored by
individuals who believe that some of the key players in the industry are failing to address
non-market issues. Various allegations have been leveled against the firm arising from
nonmarket issues. The primary nonmarket issues concern effects of Wal-Mart operations on
the natural environment, effect of its products on consumers’ health, wages and benefits
available to the employees and impacts of its rapid expansion on other small firms in the
retail food industry.Low Wages and Inadequate Health BenefitsAs the largest private
employer in the United States, the firm has made headlines on several occasions. In most
cases, these headlines revolved around firm’ s infamous employment principles and
practices. The firm has been heavily criticized for its human resource management policies.
In 2012, the company realized a significant net income of more than $11 billion. In amid of
this considerable achievement, the firm received more than 5,000 lawsuits every year.
According to MarshalI- (2012), employees in the organization are treated unfairly.
Employees are transferred from one region to another without clear explanations or their
consent. Wal-Mart has always been against workers union. In 2012, workers of Wal-Mart
store in Quebec managed to form a union. In response, the company decided that it would
close this store on economic grounds. However, it became apparent that the company
decided to take this move in order to sabotage the workers union. Mattera (2013) points
out that the workers in the retail food industry are being exploited and the act is profound
at Wal-Mart Corporation. In September 2012, the International Labor Rights Fund filed a
lawsuit against the firm for exploiting workers in foreign countries. The complainant argued
that the firm denied minimum age and required them to work over time without pay. It was
also alleged that employees were beaten by supervisors in some regions. It has been
reported several times that Wal-Mart has had the tendency of violating child labor rights.
Workers in different Wal-Mart’ s stores have complained of inadequate healthcare being
accorded. According to Mattera (2013), Wal-Mart workers are sicker than the US national
population. The workers in most regions utilize limited emergency rooms in case of injuries
instead of being taken to hospitals. Last year, the firm passed policies and recommendations
that would lead to reduction in health care spending for its workers (Workplace Fairness,
2013).Harming the natural environmentFor many decades, Wal-Mart’ s reputation has
been severely damaged by criticism and legal troubles for negative effects of business
operations on the natural environment. Community activists in the United States have
always blamed the firm for causing damage to the neighborhoods where it operates its
stores. The activists have been slamming the firm for litany of harmful effects on the natural
environment. According to Kurtzleben (2012), Wal-Mart’ s business operations have been
emitting million of tons of CO2. The firm has also been destroying the natural environment
by building mammoth size warehouse stores. In the last decade, the firm tried to itemize its
environmental achievements in its Global Responsibility Report. From the report, the
company kept 81% of all its waste out of landfills. Despite these efforts, the firm is always
under microscope. Kurtzleben further suggests that Wal-Mart uses same amount of energy

3. as 1,100 households in the United States do every day. Various environmental groups have
raised various issues against Wal-Mart. In 2010, the Institute for Local Self-Reliance (ILSR)
blasted Wal-Mart for establishing stores in the outskirts of cities. This means that
consumers have to drive further in order to access the stores. In the recent past, the firm
launched a massive grocery operation that operates all the time. In effect, this has
encouraged industrialized farming hence more energy is consumed. Wal-Mart has been
accused of “ green washing” in order to win customers’ favor. With its massive grocery
operation, the firm has promoted an industrialized food system in the US thus leading to
reduction in the natural resources.Wal-Mart accused of driving out small businessesWal-
Mart is a well established company with strong capital base. Therefore, it is capable of
opening large business stores anywhere. In 2006, the firm opened a large store in Austin. At
the moment, there were more than 306 businesses in the region. However, this number had
reduced to less than 80 by 2009. Research indicates that the closure of this business was
due to the presence of new Wal-Mart store. The firm take advantage of economic of large
scale hence they can offer prices for its products at relatively lower price. Attempts by other
small businesses to compete for customers in the same market are unbearable since they
cannot achieve a breakeven point. This accusation has been disputed by Wal-Mart arguing
that its stores promote the growth of other small businesses hence resulting to robust
economic growth (Berg, 2012).PART BQuestion OneIn order to realize success in the
modern business environment, firms and organizations must adopt and implement ethics
and principles that guide their operations. It is a matter of fact that social values and
technology is rapidly changing over time. As such, tensions are expected to be experienced
when implementing the adopted ethics and principles (Coughlin, Soskolne & Goodman,
1997).i. Balancing of individual and organization’ s rightsIt is important for managers to
balance between the rights of organizations and the individuals that would be affected by
the ethics and principles to be adopted. For instance, a manager of a health institution has to
pass principles require the organization to quarantine an individual identified to be
suffering from a communicable disease. Isolation of subjects of communicable diseases is a
standard health practice especially in the past. However, application of such principles or
practices in the modern times often generates tensions (Coughlin, Soskolne & Goodman,
1997).ii. Conflict of InterestsIn reference to a public health organization, employees are
always employed by the state whereas health researchers are often engaged by academic
institutions. Ethically, the health care practitioners are required to remain impartial
throughout their undertakings and devoid of conflict of interest. However, health
practitioners employed by private firms or corporations are affected by this principle owing
to the fact that they pay depend on the company they work for. In most cases, government
tends to pressurize these workers to be free from conflict of interests thus generating
tensions. This tension often affects the decision-making processes in private organization
since they have to factor it.iii. Privacy, informed consent and confidentialityIt is ethical for
health care workers to be secretive about health data. Governments around the world have
advocated for protection of people’ s health data. While this principle is necessary, it
negatively affects valuable health research activity. Maintaining privacy, confidentiality and
informed consent are integral elements in most organizations particularly in the health

4. sector. However, full disclosure has been considered important especially for research
purposes (Soskolne & Light, 1996).iv. Beneficence or paternalismThere are certain
functions that are enforced by an organization. There are certain programs and
interventions that certainly have benefits to both workers and the organizations. However,
enforcing them might undermine respect for autonomy. When the managers do something
to safeguard its workforce, the workforce itself may hold different views and values and
may feel that the management or the organization’ s action is paternalistically. This tension
often forces managers to engage all employees in matters that affect them in the working
environment (Soskolne & Light, 1996).v. Research integrityIn some cases, researchers are
forced to make recommendations that are not objective or subjective purposely to protect
an organization. For example, an epidemiologist has an ethical duty to pursue thorough
research and act on the findings. However, this health care practitioner may be forced to
make wrong recommendations in order to protect the health organization. This means that
the purpose of the health institution to protect the lives of the people is undermined. In
most cases, managers tend to choose the balance between impartiality and advocacy
(Soskolne & Light, 1996).Question TwoInfant Formula in Developed CountriesInfant
formula was developed in the 1920s in the United States, and has been successfully adopted
by other developed countries. The program was meant to provide medical alternatives to
breast milk for affected mothers. By 1970s, about 80 percent of all American babies were
fed through the infant formula. Despite the fact that the alternative was highly welcomed
and received, various ethical issues surrounding infant formula have emerged. People
around the world have questioned the appropriateness of the alternative. The alternative
has been marketed across the globe, but the process has been marred by numerous ethical
issues (Watson, 2013).Like other business firms around the world, manufacturers of infant
formula have corporate responsibility to fulfill. They are required by the society to ensure
that the products do not cause harm to the consumers. With advancement in technology,
manufacturers of these products have ethical responsibility to testing and analyzing of milk
and other constituents of infant formula to ascertain health benefits and risks to the
consumers. The firms should invest a great deal of resources on research and development
to find how the product can be produced. In the rapid moving marketing environment, the
manufacturers of these products are required to observe full due diligence particularly
when performing clinical trials and launching the product. Most firms have failed to observe
this recommendations hence resulting to various claims (Watson, 2013).Another eminent
ethical issue is that manufacturers should ensure that their products have food labeled
regulations to be used by the users. The CEO of the manufacturing company has the
responsibility of ensuring that the Manufacturing, Marketing, R & D and Quality Assurance
departments corporate so as to ensure that harmless products are availed to the consumers.
Marketers of this product should be guided by the principle of full due diligence especially
when pursuing clinical trials so as to ensure safety of the participants. In some cases, the
ethical responsibility of CEO and the various departments on ensuring that the products
cannot be realized in case a conflict of interest exists between organization’ s profit and
corporate social responsibility (CSR). Research and science plays an important role in infant
formula in ensuring that testing and analysis of the constituents of infant formula are

5. properly carried out. In a case where the entire leadership fraternity is now willing to take
risks, there are high chances that risk assessment will be shallow as it was in the incident in
China during 2007 (Watson, 2013).ReferencesBerg, N. (2012). Radiating Death: How Wal-
Mart Displaces Nearby Small Businesses. Retrieved November 2013 from
http://www.theatlanticcities.com/jobs-and-economy/2012/09/radiating-death-how-
walmart-displaces-nearby-small-businesses/3272/Coughlin, S., Soskolne, L. & Goodman, K.
(1997). Case Studies in Public Health Ethics. Washington, DC: American Public Health
Association.Kurtzleben, D. (2012). Wal-Mart Struggles to Overcome Environmental
Criticism. Retrieved November 2013 from
http://www.usnews.com/news/articles/2012/04/20/walmart-struggles-to-overcome-
environmental-criticism-Mattera, P. (2013). Wal-Mart: Corporate Rap Sheet. Retrieved
November 11, 2013 from http://www.corp-research.org/wal-martMarshalI, J. (2012). Wal-
Mart’ s Labor problem: Limit to the Low-Rate Model. Retrieved November 11, 2013 from
http://makingchangeatwalmart.org/files/2012/10/WalmartLaborProblem.pdfWatson, J.
(2013). Watson Dairy Consulting: Corporate Social Responsibility. Retrieved November 11,
2013 from http://www.dairyconsultant.co.uk/corporate_responsibility.php#Workplace
Fairness (2013). The Good, the Bad and Wal-Mart. Retrieved November 2013 from
http://www.workplacefairness.org/reports/good-bad-wal-mart/wal-mart.php