Unethical Behaviour

Mike Duke
CEO of Walmart

Team Members: Minell Nimasha Nayomi Mafaz Aqeel

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Overview of Presentation
Intro about Walmart CEO Mike 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)
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Unethical practices by Mike Duke

Bribing the officials - Bribing foreign officials to grow its business. Just on the basis of knowing about illegal activity, not doing anything about it (and probably condoning and recommending more,) and then trying to change U.S. law to diminish the legal repercussions, Mr. Duke should have long ago been fired. Health Care - Nationally, 64% of workers in companies of 5,000 employees or more receive their health benefits from their employer. However, Wal-Mart typically covers only around 50% of its employees.

Low Wages - Wal-Mart typically pays its sales associates, cashiers, team leaders, and
overnight stockers 26-37% less than the national average for the same jobs in the retail industry. 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 itself
defending its labor practices in legal battles across the nation. Wal-Mart is currently facing more than 80 lawsuits alleging that employees were forced to work off the clock and skip lunch and rest breaks while management manipulated time and wage records in order to keep labor costs down.

(Walmart Corporate Watch, 2013)

Overcoming unethical practices

Ethical Theories
Building trustworthiness among employees
Company has authorized millions of dollars to officers to speedup the building permits and to gain other favors.

Be legally binded, selfmonitored and accountable

Make ethics based decisions

Wal-Marts management knew that they are establishing a campaign of bribery to dominate the market, but they decided to keep continuing it rather than stopping it. (Shayon,S, 2012)

Honesty in business

Wal-Mart offered large payoffs to get the things done which were law prohibited. (Shayon,S, 2012) Should consider about the laws and regulations of government

Company has carried out the bribery campaign to boost the companys growth in the market.

Wal-Mart should encourage employees to feel that the company is conducting ethical business practices and acts for the betterment of the business and not for the purpose of filling officials pockets.

This helps to show the competition edge in the market.

should be able to do the right thing by putting the leadership roles of WalMart in forward but they should be monitored.

(Shayon, S, 2012)

Overcoming unethical practices

Social responsibilities
Consideration about the policies, training and laws
Transparency in business practices Higher performance with integrity

Wal-Mart have violated environmental laws and violated air pollution regulations.

Though the management of the company knew about the campaign of bribery, they could not decide to expand an internal investigation for the consumers. Consumers should be able to know the fact that WalMart business has nothing to hide and allows consumers to view the company practices clearly and the rules and regulations as well.

Wal-Mart management have ignored trainings, a strong tone at the top and the policies.

Beyond the company economic should consider about the laws and the external environment.

Should lead with top and establish robust system and change the management style
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(Benjamin, W, 2012)

(Lister, J, n.d)

Character theory
Criteria Self Awareness and self control (slide 5) Empathy (Refer slide 5) Compassion (Refer slide 6) Courage (Refer slide 6) Generosity (Refer slide 6) Honesty (Refer slide 5) Fairness and justice (Refer slide 6) Sociability and interest in others (slide 5) Scores
6/10 4/10 6/10 5/10 4/10 4/10 4/10 6/10
*Our view only

Note : Please refer the given slide no's and reference for justification on scores assigned.
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Ethical behaviour and Organisational performance

The term ethical behavior 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 right from 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.

Importance of being Ethical

Potential Avoidance of Fines
Decreased Vulnerability Improved Brand Image and Reputation Customer Loyalty
Walmart Company and their employees are required to comply with national, international, and local laws governing their operation. Failure to comply with these standards can be costly in terms of time, resources, brand image and employee and customer loyalty as Walmart is a world recognize large scale business.

As Walmart develop or enhance their overseas operations, decentralize their business functions, and empower their workforce, it is imperative for them to develop ethics practices that provide the necessary training and tools to assure that their employees throughout the world can make ethical decisions.

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 determining the companies' rankings. So that Walmart can be nominated too.

A 1996 survey by Bozell Worldwide, The Wall Street Journal International Edition, and Nihon Keizai Shimbun, titled "Global Corporate Good Citizenship: Improving Perceptions in the '90s," reports that business ethics matter to consumers.

(Inc,1999)

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) Walmarts corporate 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 associate regardless of his or her position and everyone is held accountable for those standards.
(Walmart News, 2012)
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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)

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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 in Mexico, 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)

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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 of bribery. If such step was implemented due to leaders honesty, the negative effect upon Wal-Mart would have reduced up to a certain extent. Implement strict internal controls within Wal-Mart, to ensure all transactions follow & obey the necessary standard internal & external rules, regulations & laws, which would contribute towards ethical business

2.

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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 was identified 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. Train all employees at every level, in order to ensure, employees are knowledgeable 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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4.

Referencing
Baldrige Glossary (2004) Ethical Behavior [WWW] Retrieved from: http://www.baldrige21.com/BALDRIGE_GLOSSARY/BN/Ethical_Behavior.html [Accessed on: 21/04/2013] City Ethics (2012) What We Can Learn from Walmart's Extensive Bribery in Mexico Home: 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 http://www.freepatentsonline.com/article/International-Trade-Forum/199121229.html Accessed on: 21/04/2013] from: [

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-wasrepeatedly-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-briberycase-raises-fundamental-governance-issues/ [ Accessed on: 20/04/2013]
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Referencing
Inc.(1999) The Importance of Being Ethical Topics: 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) How Organization Theory of Ethical and Social Responsibility Affects the Workplace Small Business: Business Models & Organization Structure: Organizations [WWW] Retrieved from: http://smallbusiness.chron.com/organization-theory-ethical-socialresponsibility-affects-workplace-17849.html [ Accessed on: 20/04/2013] Shayon ,s, (2012) Mexico Bribery Scandal Challenges Walmart on Corporate Ethics retail watch [WWW] Retrieved from: http://www.brandchannel.com/home/post/2012/04/23/Walmart-Mexico-CorporateCitizenship-042312.aspx [Accessed on: 20 /04/2013] sifi finance (2013) Lawmakers release documents on Wal-Mart bribery. [WWW] Retrieved from: http://www.sify.com/finance/lawmakers-release-documents-on-wal-mart-bribery-newsinternational-nbkw4cgajac.html. [Accessed on: 20 /04/2013]
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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) Vast Mexico 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/atwal-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: 20/04/2013]

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Mans ethical 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

Thank you
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