According to Chris Macdonald (n,d)
business ethics is defined as “the critical, structured examination of how
people and institutions should behave in the world of commerce. In particular,
it involves examining appropriate constraints on the pursuit of self-interest,
or profits, when the actions of individuals or firms affect others.” Business
ethics is closely linked to the term Corporate Social Responsibility (CSR)
which is defined as the “continuing commitment by business to behave ethically
and contribute to economic development while improving the quality of life of
the workforce and their families as well as of the local community and society
at large (Baker, 2004).” This essay will seek the to discuss how the terms
business ethics and CSR has influenced the practices of the company, Walmart Corporation, and
evaluate how well they have adhered to ethical principles.
Walmart is recognized as the world’s largest
retailer goods such as bras, dresses, underwear and many other types of clothing and household
items, many of their products are made in low income countries such as Bangladesh
(Grabell, 2013). The business practices of this retail giant were brought in to
questioning in April of this year when a garment factory building in Rana Plaza
Bangladesh collapsed, killing over 1100 workers. Some of the major questions
raised were if Walmart had the capability to manage effectively their supply
chain and if they were able to monitor and ensure that the working conditions
of workers that made their goods were up to international labor standards.
Walmart defended themselves by stating that they had barred 200 factories from
conducting business with them, due to safety problems, labor violations and
unauthorized subcontracting (Grabell, 2013).
However,
even though Walmart has tried to back their claims, it has been found that they
have continued to associate themselves with two of the companies that were on
the barred list, Mars Apparel and SimCo Dresses. In fact evidence from the
United States (US) customs shows that SimCo Dresses and Mars Apparel shipped
tons of goods to Walmart in March and May of this year respectively. In
addition to this act that may seem unethical or against business ethics, Walmart
have refused to sign an agreement that the international labour body has put in
place for large retailers to improve safety conditions of factories in
Bangladesh. Walmart stated that they have an alternative safety plan that when
implemented at factories, these improvement plans will yield faster results (Grabell,
2013).
The Walmart Corporation is faced with the
ethical dilemma of getting shipment of goods from factories in Bangladesh
without violating international labor laws. That is they must choose whether to
sever ties with long time suppliers whose factories may pose a safety risk, which
may end in the loss of jobs or they must try to help to improve the factories
by updating areas such as the structural strength of buildings that may cause
collapse and the electrical wiring which may cause fires, thereby helping to
retain the jobs of many in need. How can Walmart maintain proper business
ethics?
My recommendation would be that
Walmart should try to aid the factories in Bangladesh to lift the standards of
their factories, in order to prevent injuries or even deaths of workers. Severing ties would not be beneficial to
either party, as Walmart would lose suppliers that produce low cost high quality
goods, and the suppliers would lose Walmart as a major account resulting in the
massive loss of jobs and even the closing down of factories. Walmart would be
able to achieve this goal when dealing with the country of Bangladesh by implementing
Corporate Social Responsibility (CSR) in their policies
Examples of which policies to
implement, could be adapted from companies such as Starbucks that have aimed to
get their partner, customers, suppliers and communities involved. If Walmart is
able to improve business relations, especially with their suppliers, this would
be beneficial and prevent the unnecessary loss of jobs. In addition they could invest in the developing
the local communities of where their factories are located in Bangladesh,
thereby strengthen business ties (Frechett, 2010).
Another company that Walmart could
aim to model in terms of their CSR policies would be McDonalds that have
implemented environmental responsibilities. These environmental
responsibilities focus on energy conservation that would find ways to increase
energy efficiency, sustainable packaging and waste management and green
building design (Frechett, 2010). When Walmart implement policies such as these,
then strict building codes and designs can be used by factory owners. Such
actions would help to maintain the integrity and reputability of the retail
giant Walmart, as well as eliminating any potential risks that may cause harm
to the workers in the factory.
To
conclude in order to achieve proper business ethics which seeks the interest
not only of the company but others, Walmart needs to support their suppliers by
helping them to develop effective safety practices within their factories.
These safety practices would prevent a recurrence of the tragedy which occurred
in April of this year. This would
further result in Walmart helping to fulfill their Corporate Social Responsibility,
which has been defined as “set of actions of a company that changes business
operations to improve, maintain, or mitigate a company’s impact on society and
the environment (Frechett, 2010).” The efforts of Walmart would not only
benefit their suppliers but would also help to maintain the integrity of the
company. Overall a display of ethical actions by the Walmart Corporation will
be mutually beneficial with their business partners in Bangladesh.
References
Baker,
M. (2004). Corporate social responsibility
- What does it mean? Retreived from
Grabell,
M. (2013). Walmart accepted clothing from
banned bangladesh factories. Retreived from
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