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Unethical Behaviour
Mike DukeCEO of Walmart
Team Members:Minell Nimasha
Nayomi Mafaz
Aqeel
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Overview of Presentation
Intro about Walmart CEOMike Duke
Unethical practices by Mike Duke
Character theory
Ethical behaviour and Organisational performance
Importance of being Ethical
Growing demand for ethical Businesses
What We Can Learn from Walmart's Extensive Bribery in
Mexico
Recommendations
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Intro about Walmart CEO Mike
Duke Mike Duke was born in 1949 (Tharpe, j , 2009)
He serves as the fourth chief executive officer of Walmart(Walmart, 2012)
From 2005 to February 2009, Mike served as vice chairman of
the company, with responsibility for Walmart International(Walmart, 2012)
Since joining Walmart in 1995, Mike has led the logistics,
distribution and administration divisions as well as Walmart
U.S (Walmart, 2012)
Under Mike's leadership, the company's international business
became a fast-growing part of WalMart's overall operations(Walmart, 2012) 3
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Unethical practices by Mike Duke
Bribing the officials - Bribing foreign officials to grow its business. Just on the basis ofknowing about illegal activity, not doing anything about it (and probably condoning andrecommending more,) and then trying to change U.S. law to diminish the legalrepercussions, Mr. Duke should have long ago been fired.
Health Care - Nationally, 64% of workers in companies of 5,000 employees ormore receive their health benefits from their employer. However, Wal-Marttypically covers only around 50% of its employees.
Low Wages - Wal-Mart typically pays its sales associates, cashiers, team leaders, andovernight stockers 26-37% less than the national average for the same jobs in the retailindustry. A study conducted by Dr. Richard Drogin in 2003 revealed then women earn
less than men and hold fewer managerial positions at Wal-Mart.
FLSA Violations - Wal-Mart, a frequent violator of wage and hour laws, now finds itselfdefending its labor practices in legal battles across the nation. Wal-Mart is currently facingmore than 80 lawsuits alleging that employees were forced to work off the clock and skip lunchand rest breaks while management manipulated time and wage records in order to keep laborcosts down.
(Walmart Corporate Watch, 2013)4
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Overcoming unethical practices
Ethical TheoriesBuilding
trustworthinessamong employees
Wal-Mart shouldencourage employees tofeel that the company is
conducting ethical businesspractices and acts for the
betterment of the businessand not for the purpose of
filling officials pockets.
Company hasauthorized millionsof dollars to officers
to speedup thebuilding permits andto gain other favors.
Be legallybinded, self-
monitored andaccountable
Shouldconsider aboutthe laws and
regulations ofgovernment
Wal-Mart offeredlarge payoffs to
get the things donewhich were law
prohibited.
(Shayon,S, 2012)
Make ethicsbased decisions
should be able to do theright thing by putting theleadership roles of Wal-Mart in forward but they
should be monitored.
Wal-Marts managementknew that they areestablishing a campaignof bribery to dominatethe market, but they
decided to keepcontinuing it rather thanstopping it. (Shayon,S,
2012)
Honesty inbusiness
This helps to
show thecompetition edgein the market.
Company has carried outthe bribery campaign toboost the companysgrowth in the market.
(Shayon, S, 2012)5
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Overcoming unethical practices
Social responsibilities
Consideration about thepolicies, training and
laws
Beyond the companyeconomic should
consider about the lawsand the external
environment.
Wal-Mart have violatedenvironmental laws and
violated air pollutionregulations.
Transparency in businesspractices
Consumers should be ableto know the fact that Wal-Mart business has nothing
to hide and allowsconsumers to view the
company practices clearlyand the rules and
regulations as well.
Though the management of thecompany knew about thecampaign of bribery, they
could not decide to expand aninternal investigation for the
consumers.
Higher performance withintegrity
Should lead with topand establish robust
system and change themanagement style
Wal-Mart managementhave ignored trainings, a
strong tone at the topand the policies.
(Benjamin, W, 2012) (Lister, J, n.d)6
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Character theory
Criteria Scores
Self Awareness and self control (slide 5) 6/10Empathy (Refer slide 5) 4/10Compassion (Refer slide 6) 6/10Courage (Refer slide 6) 5/10Generosity (Refer slide 6) 4/10
Honesty(Refer slide 5) 4/10
Fairness and justice (Refer slide 6) 4/10Sociability and interest in others (slide 5) 6/10
Note : Please refer the given slide no's and reference for justification on scores assigned.
*Our view only
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Ethical behaviour and
Organisational performance
The term ethicalbehavior refers to how an organization ensures that all its
decisions, actions, and stakeholder interactions conform to the organizations
moral and professional principles. These principles should support all applicable
laws and regulations and are the foundation for the organizations culture and
values. They distinguish rightfrom wrong.(Baldrige, 2004)
Ethical Business Practices of Walmart
100 million customers every week.
"Low prices, always"
Helping Hands
Helps in saving money.
Private label brands.
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Importance of being Ethical
Walmart Company and their employees are required to comply withnational, international, and local laws governing their operation. Failureto comply with these standards can be costly in terms of time, resources,brand image and employee and customer loyalty as Walmart is a worldrecognize large scale business.
Potential Avoidance
of Fines As Walmart develop or enhance their overseas operations, decentralize
their business functions, and empower their workforce, it is imperativefor them to develop ethics practices that provide the necessary trainingand tools to assure that their employees throughout the world can makeethical decisions.
DecreasedVulnerability
Several ethics awards and media lists on corporate reputation (e.g.,American Business Ethics Awards, and Business Ethics "100 Best
Corporate Citizens") consider a range of ethical criteria for determiningthe companies' rankings. So that Walmart can be nominated too.
Improved Brand
Image and Reputation A 1996 survey by Bozell Worldwide, The Wall Street Journal
International Edition, and Nihon Keizai Shimbun, titled "GlobalCorporate Good Citizenship: Improving Perceptions in the '90s," reports
that business ethics matter to consumers.
Customer Loyalty
(Inc,1999) 9
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Growing demand for ethical
Businesses
The growing demand for businesses to behave ethically is an
opportunity, not a threat, for companies and countries smart enough to
see it that way. One thing upon which we all agree is that consumers are
increasingly looking to do business with companies that are, in some way,ethically, environmentally and socially responsible. People are worried
about the fundamental challenges facing our planet and, increasingly, they
want the things they buy to reflect their concerns. (Davis, 2008)
Walmartscorporate culture has been built on a foundation of acting with
integrity and the highest ethical standards. The company has the same high
standards of integrity for every associateregardless of his or her position
and everyone is held accountable for those standards.
(Walmart News, 2012)
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Wh t W C L f
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What We Can Learn from
Walmart's Extensive Bribery in
Mexico The Independence of Investigators When it comes down to it, there is very little
difference between self-investigation and cover-up. If allegations are true, those charged
with investigating the allegations don't have to investigate them at all. They know what
happened. If the allegations are false, an investigation stating they are false won't be
believed by anybody in the public for this instance.
Jurisdiction over Applicants - Government officials certainly have the higher obligations,
but there is no reason to leave applicants out of an ethics program. Their participation can
make it far easier to bring ethics proceedings against them and, therefore, far more likely
that they will not tempt officials into ethical misconduct or give in to unethical officials
demanding money for action.
(Cityethics, 2012) 11
Wh t W C L f
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What We Can Learn from
Walmart's Extensive Bribery in
Mexico Confidential Information - It's worth noting that Walmart not only paid to speed up permits
and the like, but also to purchase confidential information. Confidential information
provisions are too often thought to be about confidentiality, when they are really about misuse
of office to benefit oneself and others.
Gifts to Governments - It is important to remember that money given to governments is not
always used to benefit its citizens. And even when it is, it still benefits high-level officials by
keeping down tax increases, which makes re-election much easier.
The Importance of Government Ethics - It would have not only meant less bribery inMexico, but in the long run would have been better for Walmart's reputation. It will now
deservedly be dragged through the mud, with the careers of many executives ended, and some
possibly going to the prison.
(Cityethics, 2012) 12
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Recommandations
1. Initially when the scandal was informed to Mr.Duke in year 2005 (The
Nation, 2013), Mr.Duke at that time holding the responsibility of
international operations, should have implemented a honest internal
investigation, instead of helping to take steps to scrub off the evidence ofbribery. If such step was implemented due to leaders honesty, the negative
effect upon Wal-Mart would have reduced up to a certain extent.
2. Implement strict internal controls within Wal-Mart, to ensure all
transactions follow & obey the necessary standard internal & externalrules, regulations & laws, which would contribute towards ethical
business
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Recommandations
3. Should take solid steps at the initial stage, to panelize employees who
involves in unethical business practices, Ex: Instead of promoting
Mr.Eduardo Castro as the vice chairman of Wal-Mart in year 2008, should
have taken steps to degrade, Mr.Eduardo Castro as Mr.Eduardo wasidentified as the driving force behind the scandals in year 2005 (The New
York Times, 2013), which would act as a demotivation for further
unethical business practices taking place in Wal-Mart.
4. Train all employees at every level, in order to ensure, employees areknowledgeable about the practices needs to be followed within Wal-Mart,
which would ensure an effective & efficient work environment, leading
towards positive feedback from all stake holders
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Referencing Baldrige Glossary (2004) Ethical Behavior [WWW] Retrieved from:
http://www.baldrige21.com/BALDRIGE_GLOSSARY/BN/Ethical_Behavior.html [Accessedon: 21/04/2013]
City Ethics (2012) WhatWe Can Learn from Walmart's Extensive Bribery in MexicoHome:
Blogs: Robert Wechslers blog [WWW] Retrieved from:
http://www.cityethics.org/content/what-we-can-learn-walmarts-extensive-bribery-mexico [
Accessed on: 20/04/2013]
Davis, Craig, (2008) Business ethics (Evaluation) [WWW] Retrieved from:
http://www.freepatentsonline.com/article/International-Trade-Forum/199121229.html [
Accessed on: 21/04/2013]
Eidelson, J, (2013) Congressmen: E-mails Reveal Walmart CEO Was Repeatedly Informed of
Bribery Scandal in 2005 [Online Newspaper] Retrieved from:
http://www.thenation.com/blog/172127/congressmen-e-mails-reveal-walmart-ceo-was-repeatedly-informed-bribery-scandal-2005#[Accessed on: 17/04/2013]
Heineman, B, W , (2012) Wal-Mart Bribery Case Raises Fundamental Governance Issues
[WWW] Retrieved from: http://blogs.law.harvard.edu/corpgov/2012/04/28/wal-mart-bribery-
case-raises-fundamental-governance-issues/[ Accessed on: 20/04/2013]
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Referencing
Inc.(1999) TheImportance of Being EthicalTopics: Leadership and managing: Leadership[WWW] Retrieved from: http://www.inc.com/articles/2000/11/14278.html [Accessed on:
21/04/2013]
IQ UNIONS (n.d) Corporate Watch: Walmart [WWW] Retrieved from:
http://www.iqunions.org/walmart-unethical-work-practices.html . [Accessed on: 21 /04/2013]
Lister, J, (2013) HowOrganization Theory of Ethical and Social Responsibility Affects the
Workplace Small Business: Business Models & Organization Structure: Organizations
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responsibility-affects-workplace-17849.html [ Accessed on: 20/04/2013]
Shayon ,s, (2012) MexicoBribery Scandal Challenges Walmart on Corporate Ethicsretail
watch [WWW] Retrieved from:
http://www.brandchannel.com/home/post/2012/04/23/Walmart-Mexico-Corporate-Citizenship-042312.aspx[Accessed on: 20 /04/2013]
sifi finance (2013) Lawmakersrelease documents on Wal-Mart bribery. [WWW] Retrieved
from: http://www.sify.com/finance/lawmakers-release-documents-on-wal-mart-bribery-news-
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Referencing
Tharpe,j, (2009) Wal-Mart CEO's journey began in Georgia [WWW] Retrieved from:http://www.ajc.com/news/business/wal-mart-ceos-journey-began-in-georgia/nQbG4/ [
Accessed on: 20/04/2013]
The New York Times Company (2013) VastMexico Bribery Case Hushed Up by Wal-Mart
After Top-Level Struggle WAL-MART ABROAD: How a retail giant fueled growth with
bribes [Online Newspaper] Retrieved from: http://www.nytimes.com/2012/04/22/business/at-
wal-mart-in-mexico-a-bribe-inquiry-silenced.html?pagewanted=all&_r=0 [Accessed on:17/04/2013]
Walmart (2012) 'President and Chief Executive Officer, Wal-Mart Stores, Inc.' Our
Story:Leadership:Executive Management [WWW] Retrieved from:
http://corporate.walmart.com/our-story/leadership/executive-management/mike-duke [
Accessed on: 20/04/2013]
Walmart News (2012) 'Walmart Global Compliance Action Steps.' Home: News & Views:
Walmart Global Compliance Action Steps [WWW] Retrieved from:
http://news.walmart.com/walmart-global-compliance-action-stepse [ Accessed on:
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Thank you
Mansethical behavior should be based effectually on sympathy, education
and social ties and needs; no religious basis is necessary. Man would
indeed be in a poor way if he had to be restrained by fear of
punishment and hope of reward after death
Albert Einstein
18