Parameters of Ethical Decision Making
WalMart – An Ethical Approach?
WalMart is the largest retailer in the world, with a global reach in 27 countries, including the United States. The company interacts with millions of consumers and stockholders, and maintains relationships with thousands of suppliers, vendors and manufacturers around the world. In addition, the company must negotiate with local, state and federal government agencies in all these locations. It is incumbent upon WalMart to act ethically with all these stakeholders in order to maintain successful operations. To that end, the ethical approaches summarized below are available to WalMart. Utilitarian – Most useful for large groups and populations, the utilitarian approach can best be summed up as “the means justifies the end.” An act that produces the greatest benefit to the most people is morally right (Weiss, 2009). The downside of this approach is that actions taken to achieve a greater benefit may in fact be immoral, unethical and possibly illegal. This is a results-oriented approach that gives little consideration to specific acts. Universalism – Unlike the utilitarian approach, universalism seeks equal treatment and respect for the individual (p. 105). In a stakeholder analysis, individual needs influence the decision-making process.
The downside of this approach is that not all actions can be taken equally. There are times when a special circumstance requires a different response not available in all other situations. This is a trust-based approach that produces ethical results while respecting individuals. Rights – Individual rights are considered entitlements that form the basis of our legal system – the right to free speech, freedom of religion, etc. In the rights approach, individual rights are upheld without interference from others; in addition, individuals seek protection of their rights through legal and/or public resources (p. 109). The downside of a rights approach is that some individuals may manipulate the legal system or public resources to their own ends. Also, fair treatment becomes less relevant with this approach when the focus remains on the individual rather than what may benefit all. This is an individual-centric approach that may or may not foster ethical behavior. Justice – To facilitate fairness, the justice approach focuses on two main principles: 1) Equal treatment for all and 2) Everyone is afforded equal opportunity to the same freedoms and advantages, although with no assurance of equal distribution of wealth (p. 111).
Justice is comprised of four main parts – Compensatory, Retributive, Distributive and Procedural, all administered within societal groups and specific governmental systems (Weiss). An added component of this approach is how well it pairs with the Rights theme noted above. The downside of this approach outside of a legal or rules-based system is agreeing on who sets the rules by which all will be judged. This is a fairness-based approach that respects the right of individuals. Virtue Ethics – Character traits are a primary focus of this approach, which also includes adherence to rules (p. 113). Individual core values drive ethical behavior. Virtue ethics are the result of behavior that conforms to those core values. According to Weiss, “Virtue ethics argue that the possessor of good character is and acts moral, feels good, is happy, and flourishes” (2009). The downside of this approach is that ethical decisions based on virtue ethics may not effectively resolve a dilemma; rather, they may be based more on emotion or core beliefs that do not lend themselves to problem solving. This is a value-based approach that is dependent on core values and beliefs to make moral decisions.
The Common Good – Designed to provide individual and group fulfillment, this approach is comprised of multiple systems that interact to sustain the common good – for example, the federal government, legal, judicial and environmental systems that benefit all (Weiss). In some respects, this approach is comparable to utilitarianism in that the goal is to support all parties; however, intent is a consideration – how actions affect the broader society. The downside of this approach is that some members of society will take advantage of the benefits, giving nothing back in return. This is a collective-based approach that considers the greater good rather than individual needs. Ethical Relativism – Individuals establish their own personal standards for behavior to advance their self-interest (p. 115). This approach is not recommended for corporate leadership, but can be useful in taking the temperature of customers. Like the virtue ethics model, the downside of this approach is that effective solutions to ethical dilemmas are not typically possible. This is an individual-based approach that does not result in solving problems or addressing issues for groups or the broader society. Ethics, Schmethics – What Dilemma?
Sustainable operations was previously identified as the focus of this project. The first step in resolving an ethical dilemma is to identify and acknowledge the problem and ironically, WalMart has done both. The company is clearly aware of issues with employee dissatisfaction which has been well documented and a high volume of litigation is actively being fought against by WalMart. While most litigation has been initiated by current and former employees, a recent lawsuit was filed by employees of a WalMart warehouse contractor, claiming employees were laid off without the required 60-day notice (Wojdyla, 2012). Another upcoming lawsuit will be filed by MacroSolve alleging patent rights violations related to WalMart’s mobile app (Evatt, 2012). In May 2010, WalMart was ordered to pay $27.6 million in damages from illegally dumping toxic chemicals such as pesticides, paint, aerosols and fertilizers in violation of California’s environmental laws (Perry, 2010). Lastly, WalMart contributes heavily to politicians that are anti-union and anti-environment. According to Stacy Mitchell of Grist, “Since the company launched its sustainability campaign in 2005, 40 percent of the $3.9 million it has given to members of Congress went to those who have lifetime scores of 20 or less on the League of Conservation Voters’ National Environmental Scorecard – meaning they vote against the environment 80-100 percent of the time. Another 19 percent went to those who vote against the environment 50-79 percent of the time” (2011).
WalMart executives would likely say the company espouses the universalism approach in dealing with ethical dilemmas, evidenced by their stated commitment to customers, sustainable operations, community and philanthropy. Upon closer examination, however, the company makes unilateral decisions regarding employees and suppliers that primarily benefit the company and often fail to respect either group – a utilitarian approach. To date, WalMart has expended much time, money and effort into this approach, but to what end? Company profits have declined in recent years, and still, the answer is to cut more costs, increase layoffs, strip away more employee benefits, and continue its strong-armed opposition to unionization. In a weak economy, this approach places a chokehold on suppliers and manufacturers who are also struggling, punishes employees that need jobs and benefits, and stifles creativity and innovation among its partners. One can only imagine how WalMart’s reputation in the minds of its customers and within the business community might be enhanced by a different approach. An Ethical Approach Re-Imagined
Ethicist John Rawls developed the Justice as Fairness theory which advances two main principles: 1) Everyone should be treated equally and, 2) Everyone is afforded equal opportunity to the same freedoms and advantages, although with no assurance of equal distribution of wealth (Weiss, 2009). In other words, with all things being equal, everyone has the same opportunity to succeed or fail based on their own skills, knowledge and capabilities. In addition to these two principles, Rawls’ theory uses a veil of ignorance that allows individuals to establish principles of justice and fairness impartially – without the benefit (or disadvantage) of knowing specific details about hierarchies, wealth, education and intelligence of themselves or others (Freeman, 2012). This facilitates development of social justice principles that benefit all, without prejudice or bias. If WalMart were to actually pursue a universalism ethical approach that respects all stakeholders, the impact on global retail would dramatically shift. For example, investing in its workforce through training and career development, along with maintaining affordable employee healthcare premiums would go a long way to build trust among workers. Also, nurturing supplier and manufacturer relationships provide a mutual benefit rather than serve primarily to boost WalMart’s profits. Investing in technology in all of its stores that supports the environment ensures that laws are followed, and sets an example to other large retailers, inviting them to follow suit. Supporting unionization and then partnering with those unions levels the playing field for employees who now have no voice. Finally, political contributions should be vastly decreased to what it was just ten years ago, when donations totaled approximately $250,000 per election cycle (Mitchell, 2011). The veil of ignorance in this scenario would be restored and would serve as an equalizing force between the company and its stakeholders. Will It Work?
The universalism approach to ethics replaces the ‘means to an end’ philosophy
through respect and equal standing for stakeholders. For WalMart, such a change does not come without a cost. WalMart executives would have to show its shareholders the value of investing in sustainable operations, and how such investments will build trust among its employees and suppliers. Most importantly, WalMart must be willing to accept reduced profits while changes are implemented. In return, WalMart can expect greater productivity and increased revenue through mutually beneficial partnerships with all stakeholders. In addition, consumers will place greater brand value on the WalMart name. Will it work? In a word, yes.
Evatt, R. (2012, February 8). Macrosolve adds wal-mart to list of patent lawsuits. Retrieved from http://www.tulsaworld.com/business/article.aspx?subjectid=49&articleid=20120208_52_E1_Jsasat255194
Freeman, S. (2012). Original position. In E. N. Zalta (Ed.), Stanford encyclopedia of philosophy (Spring 2012 ed.). Retrieved from http://plato.stanford.edu/entries/original-position/
Mitchell, S. (2011, December 8). Walmart spends big to help anti-environment candidates. Retrieved from http://grist.org/business-technology/2011-12-07-walmart-spends-big-to-help-anti-environment-candidates/
Perry, T. (2010, May 3). Wal-mart ot pay $27.6 million to settle california enviornmental case. Los Angeles Times. Retrieved from http://latimesblogs.latimes.com/lanow/2010/05/walmart-to-pay-28-million-to-settle-california-environmental-case.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed: lanowblog (L.A. Now)
Weiss, J. W. (2009). Business ethics; a stakeholder & issues management approach. (5th ed.). Mason, OH: South-Western Cengage Learning.