hosp

Professor Silva

Hospitality Strategy Design & Execution Seminar HOSP4060

Ethics “White” Paper

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Introduction Purpose of this paper is to compare two companies and their ethical business practices. Ethics a noun~ a system of moral principles the ethics of a culture; the rules of conduct recognized in respect to a particular class of human actions or a particular group or culture.

Since being founded in 1983, Costco has grown at about 15 percent every year, they are the

largest US seller of fine wines. Costco states that their Code of Ethics is:

• Obey the law

• Take care of our members

• Take care of our employees

• Respect our suppliers

“If we do these four things throughout our organization, then we will achieve our ultimate goal, which

is to Reward our shareholders.”

The Ethisphere Institute has released its 2012 list of the World’s Most Ethical (WME)

Companies included in this list was Costco Wholesale Corp., even though they are not currently on the

list for 2015 Costco has built a reputation as one of the most generous employers to work for in the

retail sector. The Influential Marketing Group says that, Costco standard employee salary of $17 per

hour is more than two times the federally mandated U.S. minimum wage. For me this show that the

company is willing to pay employees for a return of high quality work. I find it funny that some “Wall

Street analysts seem to be the only critics of Costco. They think the company could make even more

money if it paid its workers less like Wal-Mart does.”

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Another show of positive business ethics is shown in how they price their branded items,

Costco has a corporate rule that no branded items can be marked up more than 14 percent and no

private label brand item more than 15 percent.

Costco has a code on ethics not only for their employees but, they also offers ethics hot line for

their supplier. They support supplier reports of possible violations of policy and other misconduct like:

• Antitrust and competition laws

• The U.S. Foreign Corrupt Practices Act

• Insider trading restrictions

• Accounting, financial reporting, and internal control rules

• Health, safety, and environmental laws

• Costco's Vendor Code of Conduct.

Corporate social responsibility (CSR) is no longer a “duty” that corporations feel they need or

have to do, but more so it has become the center of operations for many companies. As stated on the

Costco website, Costco Wholesale is committed to supporting charitable and community activities in

the markets where we do business. “We focus on programs supporting children, education and health

and human services; like The United Way, Children's Miracle Network Hospitals and the Red Cross.”

Below are the list of ways Costco utilizing sustainability practices:

• Climate Change Statement

• Carbon Emissions Footprint

• Development & Site Design

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• Energy Management

• Packaging Designs

• Recycling & Waste Stream Management

Wal-mart founder founded by Sam Walton in 1962 and incorporated on October 31, 1969, Sam

Walton once stated "Personal and moral integrity is one of our basic fundamentals and it has to start

with each of us". Their ethic statement is “Our Statement of Ethics will introduce you to the behaviors

and conduct that create an honest, fair and objective workplace while operating in compliance with all

laws and our policy”

As stated on the Wal-mart website “Environmental sustainability has become an essential ingredient to

doing business responsibly and successfully. As the world's largest retailer, our actions have the

potential to save our customers money and help ensure a better world for generations to come. At the

same time, it sets the stage for a more financially stable and responsible Wal-mart.”

Key areas for Wal-mart are:

• Targeting zero waste

• Electronics recycling

◦ Smart-phone and Tablet Trade-In Program

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• Products

◦ Selling Sustainable Foods

◦ Sustainable Design & Manufacturing

• Responsible Sourcing

As a leader in providing career opportunities and resources to a global workforce, Wal-mart

global responsibility is expressed by the work they do to help people live better this reaches far beyond

the brick and mortar of their stores. Fiscal year 2013 sales of approximately $466 billion, Wal-mart

employs more than 2.2 million associates worldwide. Wal-mart continues to be a leader in

sustainability, corporate financial aid and employment opportunity. From local issues like domestic

manufacturing and job creation to global issues like preserving the environment, fighting hunger,

empowering women, and providing access to healthy, affordable food.

Conclusion

Both of the companies that I selected support a code of ethics, social responsibility and

sustainability within their companies. When making my selection for this paper I chose Costco as my

ethical company and Wal-mart as my unethical one. This was based on my experience as a consumer in

the market place. All companies are bombarded with recall on products, unethical practices but for Wal-mart this

is a common thread in the number of articles you find online, they are directly involved in hundreds of

recall and unethical practices, I did not find as many for the Costco Wholesale Corp. Based on the companies published code of ethics, it does not influence my buying decision for

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me it is how the local store I shop at treats you as a customer. It is not always about the dollar it is also

about top notch customer service. In the food manufacturing industry Pepsi Co, show ethical and responsible practices, but also

they believe that in the workplace show respect to all employee is right thing to do for our business. I

believe that to build a genuinely great global business, the business leaders like the CFO and Presidents

need to adopt a global standard of ethical practices starting at the top.

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Works Cited "Costco Wholesale Sustainability Report 2015."<http://phx.corporate-ir.net/External.File? item=UGFyZW50SUQ9Mjc3MzQ3fENoaWxkSUQ9LTF8VHlwZT0z&t=1>. "Ethics & Integrity." Wal-Mart Stores, Inc.. 2015. 22 Oct. 2015. <http://corporate.walmart.com/our- story/ethics-integrity>. Greenhouse, Steven . "How Costco Became the Anti-Wal-Mart." The New York TImes. 17 Jul. 2005. 22 Oct. 2015. <http://www.nytimes.com/2005/07/17/business/yourmoney/how-costco- became-the-antiwalmart.html?_r=0>. "http://www.costco.com/confidential-ethics-hotline-for-suppliers.html." Costco Wholesales. 22 Oct. 2015. <http://www.costco.com/confidential-ethics-hotline-for-suppliers.html>. Wal-Mart. 2015. 22 Oct. 2015. <http://www.walmart.com/>. "Costco: Business Ethics at Work." The John Jay Institute. 8 Aug. 2013. 22 Oct. 2015. <http://www.centerforajustsociety.org/costco-business-ethics-at-work/>.