Walmart Manages Ethics and Compliance Challenges

Case Study #3

Walmart Stores, Inc., is an icon of American business. With

net sales of nearly $500 billion and more

than 2 million employees, the world’s largest retailer and one of its largest public corporations must

carefully manage many stakeholder relationships. Its stated mission is to help people save money

and live bette

r. Despite past controversies, Walmart has attempted to restore its image with an

emphasis on diversity, charitable giving, support for nutri

-

tion, and sustainability. The company,

along with its Walmart Foundation, has donated $1.3 billion in cash and in

-

kind contributions.

Walmart often tops the list of U.S. donors to charities. However, more recent issues such as bribery

accusations in Mexico have cre

-

ated significant ethics and compliance challenges that Walmart is

addressing in its quest to become a

socially responsible retailer. This analysis begins by briefly

examining the growth of Walmart. Next, it discusses the company’s various relationships with

stakeholders, including competitors, suppliers, and employees. The ethical issues concerning these

s

takeholders include accusations of dis

-

crimination, leadership misconduct, bribery, and unsafe

working conditions. We discuss how Walmart has dealt with these concerns, as well as some of its

recent endeavors in sus

-

tainability and social responsibility.

The analysis concludes by examining

what Walmart is currently doing to increase its competitive advantage and repair its reputation

.

The story of Walmart begins in 1962, when founder Sam Walton opened the first Walmart Discount

Store in Rogers, Arka

nsas. Although its growth was initially slow, over the next 40 years the

company expanded from a small chain to more than 8,000 facilities in 27 countries. The company

now serves more than 200 million customers weekly. Much of Walmart’s success can be attr

ibuted

to its founder. A shrewd businessman, Walton believed in customer satisfaction and hard work. He

convinced many of his associates to abide by the “10

-

foot rule,” whereby employees pledged that

whenever a customer came within 10 feet of them, they wo

uld look the customer in the eye, greet

him or her, and ask if he or she needed help with anything. Walton’s famous mantra, known as the

“sundown rule,” was: “Why put off until tomorrow what you can do today?” Due to this staunch work

ethic and dedication

to customer care, Walmart claimed early on that a formal ethics program was

unnecessary because the company had Mr. Walton’s ethics to follo

w

References to use:

1.

Ferrell,

O.C.,

Fraedrich,

J.,

&

Ferrell,

L.

(2017).

Business

ethics:

ethical

decision

making

and

cases

.

(11th

ed.).

Boston,

MA:

Cengage

Learning

.

2.

https://corporate.walmart.com/our

-

story/global

-

ethics

-

compliance

3.

https://www.environme

ntalleader.com/2017/04/walmart

-

spends

-

141m

-

ethics

-

compliance

-

systems

-

positions

-

increased

-

shareholder

-

returns/

4.

https://www.law.com/corpcounsel/2019/05/22/walmart

-

names

-

david

-

searle

-

as

-

international

-

compliance

-

and

-

ethics

-

chief/?slreturn=20190612201623

Case Study #3

Walmart Stores, Inc., is an icon of American business. With net sales of nearly $500 billion and more

than 2 million employees, the world’s largest retailer and one of its largest public corporations must

carefully manage many stakeholder relationships. Its stated mission is to help people save money

and live better. Despite past controversies, Walmart has attempted to restore its image with an

emphasis on diversity, charitable giving, support for nutri- tion, and sustainability. The company,

along with its Walmart Foundation, has donated $1.3 billion in cash and in-kind contributions.

Walmart often tops the list of U.S. donors to charities. However, more recent issues such as bribery

accusations in Mexico have cre- ated significant ethics and compliance challenges that Walmart is

addressing in its quest to become a socially responsible retailer. This analysis begins by briefly

examining the growth of Walmart. Next, it discusses the company’s various relationships with

stakeholders, including competitors, suppliers, and employees. The ethical issues concerning these

stakeholders include accusations of dis- crimination, leadership misconduct, bribery, and unsafe

working conditions. We discuss how Walmart has dealt with these concerns, as well as some of its

recent endeavors in sus- tainability and social responsibility. The analysis concludes by examining

what Walmart is currently doing to increase its competitive advantage and repair its reputation.

The story of Walmart begins in 1962, when founder Sam Walton opened the first Walmart Discount

Store in Rogers, Arkansas. Although its growth was initially slow, over the next 40 years the

company expanded from a small chain to more than 8,000 facilities in 27 countries. The company

now serves more than 200 million customers weekly. Much of Walmart’s success can be attributed

to its founder. A shrewd businessman, Walton believed in customer satisfaction and hard work. He

convinced many of his associates to abide by the “10-foot rule,” whereby employees pledged that

whenever a customer came within 10 feet of them, they would look the customer in the eye, greet

him or her, and ask if he or she needed help with anything. Walton’s famous mantra, known as the

“sundown rule,” was: “Why put off until tomorrow what you can do today?” Due to this staunch work

ethic and dedication to customer care, Walmart claimed early on that a formal ethics program was

unnecessary because the company had Mr. Walton’s ethics to follow

References to use:

1. Ferrell, O.C., Fraedrich, J., & Ferrell, L. (2017). Business ethics: ethical

decision making and cases.

(11th ed.). Boston, MA: Cengage Learning.

2. https://corporate.walmart.com/our-story/global-ethics-compliance

3. https://www.environmentalleader.com/2017/04/walmart-spends-141m-ethics-

compliance-systems-positions-increased-shareholder-returns/

4. https://www.law.com/corpcounsel/2019/05/22/walmart-names-david-searle-as-

international-compliance-and-ethics-chief/?slreturn=20190612201623