Ethics for Managers Forward Indirect Path

Question: Discuss about the Ethics for Managers for Forward Indirect Path. Answer: Introduction Ethics is a branch of philosophy that is based on concepts of right and wrong conduct and in business, the right and wrong behavior for achieving business goals is the ethics of codes in an organization. In this business report, the organization that is taken into consideration is Walmart. Walmart Stores, Inc., is one of the leading retail stores across the globe; however, this organization also suffers from some ethical criticism. This report highlights the most significant ethical issues the organization is facing and to discuss the Walmarts corporate social responsibility using CSR model and help in identifying their key stakeholder and ethics in communications and practice. Discussion Walmart contribution to sustainability Sustainability towards society Sterman (2015) depicts that every organization aims for making their business sustainable so that they can serve their business to their valuable customers for better productivity and profitability. This sustainability can be achieved through adopting effectivebusinessstrategies and activities for enhancing the human and natural resources of the organization. According to the case study, it has been found that even though the concerned organization has billions of dollars in the charity and for human development in the society, they are suffering from plenty of criticism that they do not behave well with their employees and other stakeholders. Implementing Sustainability Index Moreover, Benn et al. (2014) illustrates that Walmart uses Sustainability Index to increase the sustainability of its products and desires to make a better supply chain management system. Mainali and Silveira (2015) also portrays that this initiation helps the organization to increase the sustainability that can be highlighted through their achievements. Their achievements are 70 percent of merchandise sold in U.S. stores and global suppliers use the Sustainability Index to assess and share information about their product and business approach (Searcy and Elkhawas 2012). Moreover, Pinar et al. (2014) illustrates that it can also be found that this organization donates $2 million to fund the sustainability consortium. Sustainability towards environment Tachizawa and Yew Wong (2014) also affirms that Walmart took effective procedure for establishing the sustainability can also be demonstrated through their practice of using creating zero waste, renewable energy, reusing of goods and sell eco-friendly products and the use of reducing fossil fuel. They believe in collaborative work with government, NGOs, and academia so that every sector of the society can get aware of their products. They also created Sustainable Value Networks (SVN) for integrating and evaluating efforts in renewable energy. In the context of reducing the amount of using plastic, by applying three R of sustainability- reduce, reuse and recycle (Vijayan et al. 2014) Walmart now uses one-time-use shopping bags. Thus they can reduce plastic bag waste by more than 42% by the end of 2015 compared to the 2007 baseline (Lamine 2015). This recycling of products can be seen through their Smartphone and Tablet Trade-In Program, where they sell electronic recycling and trading newest smartphone that is less expensive. They have earned more than $50 to $300 over 100 smartphones (Tachizawa and Yew Wong 2014). The recycling procedure results in the packaging optimization from both an economic and environmental perspective. Gadakari et al. (2014) further depicts that reduces GHG emissions across our supplier base and eliminated 7.92 MMT of GHG until 2013 and target to eliminate 18MMT of GHG emission by 2016 (Corporate.walmart.com 2016). They also emphasize on pollution free environment and uses energy efficient products like they have installed 115 onsite rooftop solar panels in seven countries that are capable of production of 71 million annual kilowatt hours of electricity. In the USA also they have installed 26 fuel cells that produce 65 million kilowatt hours of annual electricity (Vijayan et al. 2014). They also take initiatives for power consumption by implement daylighting feature in most of their stores and by consuming centrally controlling system. Most significant ethical issues Walmart has faced Lack of benefits to employee Britt et al. (2016) defines that the Walmart being the leading retail organization yet have ethical issues involving employee stakeholders and from the case study, it has been found that they provide low wages and benefits to their employees. They also do not provide health insurance for more than 60 percent of its employees (From the case study). It is also found from the survey that workers, who work 30 hours a week, will not get the health insurance from the organization. Preference of part-time employer over full-time employees Wielers et al. (2013.) on the other hand, depicts that the concerned organization believes in hiring more part-time employer compared to the full-time employer. The primary reason for adopting this strategy is to get the best out of those candidates for more results that are productive. Shields et al. (2015) hence criticizes by stating that leading organization must have to emphasize more on employee retention by implementing employee motivation strategies like a reward system. Allegation of Bribery Jones (2013) defines that the success of an organization relies on how they extend their organization across the globe. Wallmart also desired to extend their store all over the world and in order to achieve the best location; they take help of unethical approach. From the case study, it has been found that for a suitable location for their Mexican arm, Walmex in Mexico, the concerned organization paid millions in bribes for accessing licensing and zoning permits for the targeted location (Barstow 2012). This bribery scandal gets worse by two primary considerations- top executives at Walmart and bribery among Walmart stores in foreign countries. This organization also has to pay the penalty due to the legislation of Foreign Corrupt Practices Act (FCPA), where to offer a bribe to a foreign official is a crime (Barstow 2012). Misconducts in organizational safety Sethi (2014) depicts that Walmart has caused much safety related trouble for their suppliers in the USA and other countries. This organization employs subcontractors for their product manufacturing procedure. Moreover, citing safety is one of the major concerns that have to be well-equipped with modern and secure technology so that none of their stakeholders will be affected by any adversity. However, valuing more to the cost-cutting technique, he does not focus on these safety technologies and as a result, in Tazreen Fashions Ltd. a Bangladeshi supplier of Walmarts apparel, due to fire 112 workers were killed (From the case study). After an investigation, it has been found that due to improper safety measures like blocked stairwells and a lack of firefighting equipment the fire cannot be stopped at that moment. Violations of labor laws Moreover, in the USA, workers at warehouses demonstrate that Walmart has harsh working conditions and violates labor laws. It is recommended for every organization to formulate their recruiting arrangements like producing application form for candidates, who want to work for the organization. The interview process and group discussion must have to be the next step in recruiting working personnel. However, Landry (2016) states that Walmart overlooked the organizational consideration by hiring their employee through third-party contractors and staffing agencies. Assessment of Walmarts corporate social responsibility using CSR model Moon (2014) depicts that there are three CSR models- CSR Pyramid, Intersecting Circles and Concentric Circles. All these models emphasize on four categories of corporate social responsibility- Philanthropic, ethical, legal and economic domains of responsibility. Barnett 2016) depicts that the concerned organization follows the CSR model of the concentric circle. Figure 1: CSR Model Adopted by Walmart (Source: Moon 2014) Walmart uses the CSR model of the concentric circle that signifies an inclusion system and is an integral part of the CSR. Economic domain of responsibility Lee et al. (2016) mentioned that the major objective of an employee is to enhance the nations economy by attaining more profit through the business system. Walmart by retailing their product in every field- grocery, daily use product, cleaning products, medicines, electronic gadgets and fashion apparel intends to contribute the economic betterment of the country where they have their stores. They provide employment to suitable candidates and by research it is found, that Walmart has 2.3 million associates, who are associated with more than 10,000 communities and operates from 28 countries around the world (From the case study). They also support the economy of the nation by getting associated with other associations like hospitals, food banks, schools and youth sports. Mashaw (2015) stated that this would not only provide promotion to the concerned organization but it will help the organization to strengthen local communities. Legal domain of responsibility According to the perspective of Gerde (2013), even though Walmart is facing adversity in following legal values for accomplishing the business, Walmart supports Fair Labor Standards Act 1938 for providing employment to every suitable candidate and not to discriminate against anyone of them based on their diverse cultural beliefs and background. Moreover, National Labor Relations Act 1935 is also followed by the concerned organization where the private sector employees are guaranteed basic rights to organize into trade unions and the customers can get every right to bargain if the current system of the organization allowed them to do so (Levi et al. 2015). Garrick (2014) Demonstrate that after the fire incident in Bangladesh, Walmart took initiatives for implement Occupational Safety and Health Act 1970 so that every employee at Walmart et the life insurance whether they are working for years and are newly joined workers. Furthermore, Resource Conservation and RecoveryAct(RCRA) is one of the environmental laws followed by Walmart where they focus more on the recycling of the used products and saves the forest resources also use eco-friendly products. Ethical domain of responsibility Walmart has considered some unethical approaches for the betterment of their organization. However, they admit all their unethical conduct of the business procedure and took initiatives for overcoming all these dilemmas. Spence (2014) demonstrates that their global ethics serves as a guide and resource for ethical decision-making and leads to ethics education and communication system in the society. They admitted their Environmental Crimes by violating the environmental law and paid more than $81 million as penalty (From the case study). In the year 2006, hey failed to train their employee for handling hazardous waste management and disposal practices at the store level and as a result, the solid waste products trashed into the bin and liquid water material are poured into the local sewer systems, which does not support the ethical consideration of their business report. Rashid et al. (2013) mentions that the company faced significant ethics and compliance challenges due to bribery case of Walmex in Mexico, they repair that reputation by avoiding discrimination, leadership misconduct, bribery, and safety for their business approach and behave ethically with everyone, who are related to their organization. Philanthropic domain of responsibility Saraf et al. (2012) demonstrates that every organization apart from their proceedings of activities, they are associated with an in-kind donation so that the economic standard of the community can be enhanced. Walmart in such circumstance, donate a huge portion of their annual revenue in the philanthropy work. They also initiate the regulation to provide paid 100 hours of philanthropic work training, sourcing, inclusion and diversity related programs for more than 19 000 associates so that they can choose their field of voluntary interest and contribute their effort in the advancement of the society (From the case study). Schramm-Klein et al. (2015) defines that Walmart donates money for the areas of hunger and nutrition, disaster relief, womens economic empowerment and disaster relief. They also donate $71millionin cashfor these activities for the year 2013 (from the case study). In the year 2011, the concerned organization had donated $100 million for womens economic empowerment an d provides job training to 60,000 women by partnering with partnering with 150 factories (Corporate.walmart.com 2016). Kwak and Kwon (2016) also depicts that in order to improve the existing business machines they have invested $35 million in new processes and procedures. In context of the disaster management projects, Kumar (2013) states that Walmart had donate over $1.5 million for mitigating adversity of Hurricane Sandy, including money, food, and goods. Walmarts key stakeholders according to three key relationship attributes According to the provided case study, the key stakeholders of Walmart are including competitors, suppliers, and employees; however, there are two more stakeholders in the organizational term- Investors and customers. Competitors Foster and McLelland (2015) mentioned that when cost is considered in the business, Wamart has the advantage over the target. Amazon, ALDI, ASDA, Kmart, Shopko in the USA and Real Canadian Superstore in Canada and Comercial Mexicana andSoriana in Mexico are some of the competitors of Walmart. From the case study it has been found that Walmarts executives encourage their store managers to compare prices with competitors so that their price can be the lowest. Suppliers Mentioned by Dunne et al. (2013), suppliers are the last in Walmarts prioritization of stakeholders. These stakeholders have a potential impact on other competitors as they work with Walmart so that they can work collaboratively with the concerned organization so that more of their products sold at Walmart stores in a profitable way and at higher prices. Some of their suppliers are- The Clorox Company, ConAgra Foods Inc, Dean Foods Company, Flowers Foods, Inc., Green Dot Corporation and others. Figure 2: Statistics of Walmart's team supplied by their supplier (Figure: Corporate.walmart.com 2016) Employees The third priority that Walmart considers among their stakeholders is their employees. They provide their employees, companys managerial decision-making while fulfilling their concerns that is job security and higher wages (Korschun 2015). They also assess the performance of each employee and then offer new and challenging job roles and responsibility to their employees as a career development. This not only will motivate their employee to serve their best to the organization but it also represents that the ethical apprehension of the organization. Investors Torres et al. (2012) state that investors are mainly interested in profits and help Walmart to attain more profit so that their share of profit will increase that result in higher dividends or earnings per share. Fernandez-Feijoo et al. (2014) also affirms that investors are also responsible for minimizing the operational costs. Ditlev-Simonsen and Wenstp (2013) depicts that lower costs usually lead to higher profits that benefit the Walmart's investors. Customers Customers are the second priority of Walmart after their investors and Walmart always work on the approaches, application of which these customers can get quality products at an affordable cost. These customers purchase their products and help the organization to make more profit. As a result, Walmart has a total number of 260 million customers in over 28 countries where they make a purchase from more than 11,500 stores under 63 banners (Corporate.walmart.com 2016). Their loyalty towards this organization can be seen through $482.1 billion annual revenue in the year 2016 (Corporate.walmart.com 2016). Ethics in Communications and practice An organization has to maintain the rights to honest and fair communications. Gubrium et al. (2014) Illustrates that anything that conveys wrong organizational information in the society is considered as a breaching of ethics in communication. There are many sources where it has been stated that Walmart is the leading retail organization that not only values their customers, but they also value their employee beforehand. However, Cornelissen (2014) depicts that it can be seen from the case study that they provide lower wages to the employees and do not emphasizes on the employee retention and opt for a part-time employee that is not mentioned in the organizational policy. Their practice also reveals that they did not give importance to the health and safety of the employee and that can be seen their Bangladesh fire case and even they do not provide life insurance to the employee who works less than 30 hours a week. This is the policy that is also not been mentioned in the organizatio nal policy. These beaches in communication and the practices of Walmart result in the loss that they are trying to be overcome in the recent days. In order to compensate their loss in the society they already have invested $35 million in new processes and procedures and provide ethical training sessions for their employees (Long et al. 2015). Recommendations for the organization to be a more ethical company in the future As a part of the recommendation, the concerned organization is taking initiatives for improving their reputation for sustainability and corporate governance. They have appointed a special ethical team for ethical standards to monitor the compliance of supplier factories according to the Standards for Suppliers and their safety. They also have taken an effective step for improving the stakeholder relationships by prioritizes the stakeholder list like to value to the government for the nation and the suppliers so that they can support the organization with legal regulation and timely inventory respectively. Moreover, Walmart should also take pledges for introducing a green initiative for maintaining the sustainability of the globe and diminishing the cause of global warming and climate change and decreases its waste and carbon emissions. In addition to that, they should value their employee prior to anyone else and trust them to make the right decision as a result to which they can cre ative solutions to business problems as they are the one, who communicate with the customers directly and can able to determine their requirement better than the managing authorities. Furthermore, they should also improve their CSR rating by helping the needy group of the society and providing 100 hours paid training to their employees per year for opting a voluntary work of their choices so that they can promote Walmart in social welfare. Conclusion This business report is based on the ethical consideration of the Walmart for their organizational approaches for better productivity. However it is found that in certain case, they have selected unethical procedures that violate their policy. Among them the first is to provide less wages to the lower designated working personnel and do not provide them health insurance. The second is that in Mexico, they have bribed the local authorities for getting a suitable place for their retail organization where they can attain maximum profitability. Thirdly, they do not have any recruitment process of their own and they hire employee through consultancy agents and third parties. However, they have to pay billions of penalties for their unethical approaches and they now took initiative for overcoming and rectifying those activities. In this circumstance, they started treating their employee as an important asset and provide them health insurance. They started interviewing 1000 market personnel in various countries for direct selection of the employee and they also dedicated $35 million to new processes and procedures so that the entire business procedure can be started ethically. Thus, with the concept of employee retention, corporate social responsibility and green initiatives they can ensure their success in recent times and future. 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