I believe that it is impossible to develop a universal set of ethical standards for organizations. Empirically, cultural differences make it practically impossible to have a universally accepted set of ethical standards. There are a few universal moral standards, such as trustworthiness and truthfulness, which apply to almost all societies and businesses. However, significant variations exist between what societies consider to be ethically right or wrong, moral or immoral, and fair or unfair (Donaldson, 1996). Instead of having a universal set of standards, societies have multiple sets of ethical standards that are largely influenced by cultural practices, religious beliefs, customs, traditions, and behaviors. Trying to impose a strict code of conduct for a particular culture or business based on the beliefs or practices of another culture is considered unethical. Due to these meaningful variations, the application of the universal set of standards in businesses can be quite challenging and extremely difficult. The corporate social responsibility of a business towards the community where it operates from can, however, be exercised using the moral prescriptions as the guideline across the world. As such, companies should be held accountable for the actions that affect the communities around them directly or indirectly. A company must safeguard the environment and the communities in its area of operation and adhere to common practices (Donaldson, 1996). For instance, some cultures consider businesses that give or accept bribes unethical, but the outcome of this practice has little impact on the communities living around. Besides the perception of dishonesty and lack of trust in such a company, the impacts of bribery are not as far-reaching. Murder, on the contrary, is universally considered unethical since it affects the people directly, including the communities around, regardless of the culture.
Corporations have no authority, nor are they under any obligation to influence ethics in the countries in which they do business. Attempting to influence the culture or ethics of a country is tantamount to ethical imperialism. Multinational companies should acknowledge that their home culture could be different from those of foreign countries where they intend to establish operations. As such, instead of showing the superiority of their home culture over the host country’s cultures, multinationals should learn and adopt the cultures of the host country in order to thrive. Any company that assumes that its ethical practices and standards based on its home country are superior to those of the countries it is doing business is demeaning to the host country’s cultural practices (Lawrence & Weber, 2014). Multinational companies have a social responsibility towards the people and the environment under which they conduct business. Thus, they must make informed and conscious decisions, especially when they operate in areas that practice ethical standards that are different from those of their home countries.
The perception of the community towards a business, particularly on matters regarding social responsibility, influences the overall performance of a company. Before establishing operations in a country with conflicting ethical standards and cultural practices, corporations have to determine if they are ready to adopt them, impose their existing home standards, or abandon the business opportunity altogether. If a company chooses to adopt the ethical standards and cultural practices of the host country, it exposes itself to scrutiny for abandoning its original home practices and can be perceived as deceiving. On the other hand, if a corporation attempts to influence the ethical standards of the host country, it is vulnerable to ethical imperialism, which alienates the local population. Ethical imperialism is based on the assumption that the corporation’s set of ethical standards practiced in the home country are superior, and therefore, should apply to other parts of the world, which is far from the truth. Attempting to influence the ethical standards of the host country, in effect, shows that the corporation’s home ethical standards are better, which threatens the survival of such a corporation (Lawrence & Weber, 2014). Finally, if it is clear that the corporation’s ethical standards do not match those of the potential country of operation, it can choose to abandon the opportunity. Instead of trying to influence or impose changes in the ethical standards of a foreign country, the corporation should just forget about the opportunity. Ideally, it would sound unethical for a company to establish operations in an environment where it does not meet the ethical standards. Every company has to live up to its social responsibility and assess whether the differences in ethical standards offset the profits earned.
Walmart Canada is a branch of Walmart, with its headquarters in Mississauga, and was established in March 1994. Most major cities and towns in Canada have Walmart stores, which shows the significant presence of this retail giant within the entire nation. Today, Walmart Canada boasts of over 170 discount stores and over 200 supercenters that host pharmacies, optical centers, banks, garden centers, and photo processing shops. Walmart has traditionally been considered a one-stop-shop, but it has played a big role in sustaining small and medium local enterprises, especially in Canada and the U.S (Wood, Logsdon, & Benson, 2000). In the process, the local economy grows together with the communities that live near these stores.
Walmart has massively been involved in community initiatives, including purchasing locally-produced products, sponsoring community projects, and engaging in low-price initiatives. Walmart Canada has made a huge contribution in creating new jobs for the Canadian population and improving the welfare of suppliers (Watts, 2000). Through initiatives, such as ‘developed in Canada’, suppliers of farm and non-farm produce benefit by supplying ingredients that manufacture all the farm products sold in Walmart stores. The stakeholders who benefit from the many programs initiated and sponsored by Walmart Canada include the local businesses, consumers, farmers, and local governments.
Walmart has had a significant impact on the environmental landscape by addressing environmental issues affecting the local communities. For example, it has initiated various programs that aim at achieving zero wastage while promoting organic solutions. By preventing and controlling electronic waste from finding its way into landfills, Walmart minimizes the impact of wastes on the environment. Furthermore, the company has put in place measures that reduce organic waste from the grocery section (Donaldson, 1996). Through recycling materials, including polystyrene, batteries, wood, oil, tires, and plastic, Walmart conserves energy. In order to achieve its goal of conserving the environment, Walmart partners with various stakeholders, including waste management organizations, local governments, communities, and environmentalists.
Section 2: Rationale (Utilitarian model, Rights Method, and Justice Approach)
The utilitarian ethical reasoning method analyzes the cost and benefit of an action, policy, or resolution. That is, an action is considered ethical if it provides more gains and fewer damages. The net benefits of an action must exceed the net costs for it to be considered ethical (Acton Institute, 2016). In the corporate setting, an action is ethical if it results in greater benefits to everyone who is affected, including the owners, employees, consumers, environment, and the society at large. This method evaluates the various options at hand and focuses on the degree of impact of a particular action on all the stakeholders. This approach addresses the outcome of an action by increasing the benefits while minimizing the negative consequences. However, this approach has some challenges and limitations, such as difficulties in measuring some social and human costs. It also tends to disregard the rights and privileges of the minority groups. Walmart, for example, applies the utilitarian ethical approach in offering customers low-cost and affordable products in its stores across the country. This model has received applause and criticism in equal measure, as some argue that it forces the company to pay employees low wages compared to the competitors.
Others perceive Walmart’s corporate social responsibility initiatives as marketing strategies that only aim at increasing the company’s net profits. The proponents, however, believe that Walmart has an obligation of participating in community initiatives since the Canadian government alone cannot fully address the society’s needs. The local consumers benefit from Walmart’s policy on suppliers that require them to produce and operate within a specific quality threshold. The customers also benefit from high-quality products and services that Walmart provides, while other stakeholders like employees gain from the welfare policy. The training and benchmarking sessions organized for the employees ensure that they gain the right skills. Although this approach may have some negative outcomes, they are offset by the maximization of satisfaction. From a utilitarian point of view, actions such as charitable donations, environmental programs, scholarships, and other community initiatives are commendable since they play a big role in promoting the welfare of society. This model helps Walmart to become more sustainable compared to its competitors.
The rights approach method of ethical reasoning is based on the idea that individuals and groups have certain entitlements and rights, but there should be a clear balance between individual and group rights. For example, individuals have a right to life safety and due processes. The greatest challenge faced by this approach is how to balance conflicting individual and group rights. Every Canadian citizen has a right to protection, privacy, and to be treated equally under the law. Ethical actions are those that protect and value the moral rights of individuals. The ownership of Walmart intends to generate profits, so it hires managers to achieve this goal. The managers, on the other hand, draw their moral obligation from the contractual agreement that they have with the company. As such, they have an obligation to generate profits, but they must do this within the confines of the law. Any action by the corporation’s managers to use the shareholders’ property for the benefit of other parties, such as the employees, is considered irresponsible and unethical. Walmart addresses safety issues, information concerns, and due process issues through the company’s policy. It also institutes appropriate policy guidelines for its associates and partners.
Allowing employees to join a trade union is part of Walmart’s measures put in place to respect the right of employees. Furthermore, the recruitment and career policy of the company guarantee the existing and potential employees of equal rights to opportunities and benefits. Walmart also has in place empowerment segments, especially for the disadvantaged groups, which aim to promote the rights of the minority groups. As part of a wider approach to ensuring that the disadvantaged groups have equal access to education and internship opportunities in its stores, Walmart advances internships and scholarships to the disadvantaged groups.
The justice approach is based on the idea of sharing benefits and drawbacks equally following some established rules. According to this approach, only actions that treat members of society equally are considered ethical. For example, paying workers based on their effort or based on their contribution is fair (Acton Institute, 2016). The justice method would question the high pay disparity that exists between organizational CEO and other employees since it is often an unfair imbalance. To bridge the pay disparity, Walmart provides employees with plenty of benefits, including reimbursements, stock ownership, and corporate discount plans. The company believes that these benefits are a reward for hard work, which is justified and a way of improving employee satisfaction. It sources for employees from the community and participates in community programs through charity, development programs, green projects, and other sustainable initiatives that are commendable and justified actions.
From my point of view, the utilitarian approach was the most useful method of analyzing Walmart’s ethical issues. Walmart is a large organization with several mandates and obligations to its stakeholders. It is a multinational company that has established operations in communities that are different from each other in terms of ethical standards and practices. As such, it is in the interest of the company to adopt ethical practices of potential business areas in the best way to achieve its expansion goal. Given the diversity of expectations and multiplicity of stakeholders, the model of greater net benefits is the best option that Walmart’s management can adopt. This method ensures that the overall benefits of all stakeholders are maximized.
Section 3: Impacts (What this mean to my family)
My family benefits directly from the low-cost products that Walmart offers, which allows me to save a lot of money. Further, given that Walmart is a one-stop-shop, it saves us the time we would spend moving from one shop to the other when shopping. Moreover, we enjoy a variety of high-quality products from the company’s extensive supplier network (Carroll & Shabana, 2010). The indirect benefits include the community programs that Walmart takes part in as well as charitable contributions that the company makes regularly. Walmart’s safe environment practices are aimed at minimizing the negative impacts of pollution, which is a benefit for my family.
Section 4: Impacts (What this mean to my community)
Walmart provides the community with an array of benefits, including unlimited employment opportunities, community development programs, enhancing maximum utilization of the local resources, providing quality products to the community, and generation of tax revenues for the local governments. Besides, Walmart promotes the creation of wealth for the shareholders, associates, and partners. Overall, the Canadian communities commend Walmart for the opportunities it presents, which ensures that they access products conveniently (Carroll & Shabana, 2010). The scholarships that the company grants to the needy but bright students promote access to education for all. Further, by drawing its employees from the local community, Walmart plays a great role in improving the living standards of the locals. The company is a huge and ready market for these communities’ produce. Finally, the community benefits when Walmart initiates programs for protecting and conserving the environment.
Section 5: Impacts (What this mean to my country)
Walmart’s Canada division has had many positive impacts on the country at large. Since it was established in 1994, Walmart’s practices have ignited competition and set the bar too high for other retailers in the country. It contributes directly to the growth of the economy through paying taxes to various levels of government that support investment in economic, social, and infrastructural projects across the whole country (Carroll & Shabana, 2010). Many stakeholders, businesses, and suppliers draw a lot of technical expertise from Walmart’s operations. Through its social responsibility initiatives, Walmart influences policies pertaining to best practices for other businesses about safeguarding the environment. The retail giant also contributes greatly to the country’s wealth and balance of trade. The company’s model encourages the consumption of locally produced products, which promotes nationalism. Due to Walmart’s strict policy on the quality of goods, the consumers are protected from consuming substandard goods and from substandard importations.
The analysis of Walmart provides meaningful lessons about adopting the ethical standards of the country in which a company intends to establish operations. Walmart has succeeded in adopting the ethical standards of Canadian communities, which allows the company to thrive despite being a foreign company. Walmart’s case study perfectly shows that adopting the ethical practices of potential business region pays better than attempting to impose home practices in a foreign land.
|Acton Institute (2016, Jan 15). Ethical reasoning in business. Retrieved from http://www.acton.org/pub/religion-liberty/volume-12-number-1/ethical-reasoning-business
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