At some point in the past, I used to work in Walmart, which is an international trade giant that prides itself on providing cheap products of acceptable quality to its customers. They were also always hiring, so getting a job there was easy. Working at a big trade company made me feel proud. However, as I soon discovered, Walmart achieved its goals through unethical means. According to the company’s mission and vision statements, they are a customer-driven company, meaning that their purpose is to serve their customers. It is a noble and ethical goal that is shared by many servant-companies. In order to serve its customers better, Walmart does what it can to reduce its prices as much as it can. In order to remain profitable, however, the company’s managers engage in clearly unethical behavior towards the suppliers, the competitors, the employees, and, sometimes, even the clients. The purpose of this paper is to explore Walmart’s ethics and explain how they contribute to the company’s successes and failures, both domestically and abroad.
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The modern philosophy of ethical leadership traces back to the worlds of Emmanuel Kant. According to his works, citizens have a duty to treat their employees and customers with respect (“Principles,” n.d.). This statement lies on the basis of servant leadership theory (Farfan, 2017). According to Walmart’s policies, principles, and rules, they are dedicated to servant leadership and ethical capitalism on all levels (Walmart, n.d.). These statements, however, differ from reality, as I have discovered during my time working there. The ideals of respect and fair treatment are sacrificed in the name of profit and industrial efficiency.
Walmart is famous for unethical business practices on all levels, starting from the ground floor and ending with its overall strategy at the highest levels. The company encourages eavesdropping and whistleblowing as means of advancing in ranks, which creates an atmosphere of distrust and separates the employees one from another, making it easier for the company to manipulate them (“Is it ethical,” n.d.). It causes damage to the communities it exists in by rooting out local vendors and producers by offering products in greater variety at lower prices. After effectively becoming a local monopolist, the company harasses local suppliers into reducing prices to the point they are hardly profitable (Foroohar, 2012). In its efforts to save money, Walmart even betrays its service to the customers, providing cheap products from questionable sources.
It is easy to see that the behaviors of Walmart leadership, even at a local store level, clearly differ from the stated values and philosophies of the organization. Observing the actions of my superiors taught me two things about ethics in a large business environment. The first thing is that while ethics are an important factor in an overall business strategy, they are not a necessary requirement. The existence of large multinational giants supporting unethical business practices, such as Walmart, proves this statement. At the same time, these practices are what prevent Walmart from effectively expanding to other markets. Europe, for example, is increasingly hostile to Walmart’s attempts of seizing the local markets, as customers and local authorities are aware of the company’s reputation. Walmart is forced to spend millions of dollars on “ethical training,” philanthropic pursuits, and charity in order to improve its reputation (Hermes, 2017). To summarize, ethical business conduct may not be as economically efficient in the short-term perspective, but it provides a solid foundation for customer retention and expansion into other regions. Customers value reputation almost as much as they value low prices and quality of goods.
Is it ethical to shop at Wal-Mart? (n.d.). Web.
Farfan, B. (2017). Overview of Walmart’s history and mission statement. The Balance. Web.
Foroohar, R. (2012,). Walmart’s discounted ethics. Time. Web.
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Hermes, J. (2017). Walmart spends $141m on ethics & compliance systems, positions for increased shareholder returns. Environmental Leader. Web.
Principles of ethical leadership. (n.d.). Web.
Walmart. (n.d.). Ethics and Integrity. Web.