Wal-Mart is one of the retailers often accused of low ethical principles and immoral behavior towards its stakeholders (Is Wal-Mart Good for America? 2004). If a company fails to adopt appropriate Corporate Social Responsibility (CSR) policy, it may result in negative consequences such as distrust of partners, consumers, or even a business failure. Following Friedman, the only social responsibility of a business is to “use its resource and engage in activities designed to increase its profit”. Wal-Mart follows this principle paying attention to global expansion and acquisition strategies, monopolistic and dominant position on the market. Wal-Mart does follow most of its promises and ethical principles in terms of Friedman’s arguments. For instance, Wal-Mart has made attempts to acquire some giant stores in Argentina, Brazil, and Peru proposing workers comparatively low wages (even if it increases dissatisfaction with its policies and negatively affects the company’s image) (Is Wal-Mart Good for America? 2004). Through acquisition plans, Wal-Mart seeks to obtain a monopolistic position in less developed countries increasing its profit but reducing market opportunities of local companies. Following Friedman, a business’s responsibility is to increase profit and serves the interest of its owners, but even in this case: the business should be refrained “from increasing the price of the product” or low wages. Low wages and inadequate compensation proposed by Wal-Mart are other areas of concern. The issues discussed in the documentary ‘Is Wal-Mart Good for America?” vividly portray that Wal-Mart practices stakeholder theory only if it meets its strategic marketing goals and does not influence a profit level. For instance, Hedrick Smith comments: “Wal-Mart has life-or-death decision over all the consumer goods industries that exist in the United States because it is the number one supplier-retailer of most of our consumer goods”.
I suppose that Wal-Mart should follow ethical principles and rules in favor of society and its members because the business activity is also a part of social life. In general, social corporate responsibility means the coordination of activities in accordance with the code established by the company and industry. In this case, the norms of CSR are directed towards achieving the goals and objectives of the organization. Wal-Mart’s management states: “Wal-Mart is a company founded on the principal of taking care of its customers and whose leader refused to get involved in politics, was reluctant to change its practices at first” (Ferdinand, 2007). The importance of new values for Wal-Mart is closely connected with consumer helplessness, as society becomes more complex. For Wal-Mart responsibility means be honest or responsible towards its consumers. It means that it should follow fair strategies in promotional campaigns and advertising informing potential consumers about products quality and specifications. Information generation and dissemination have reached new heights. So, many consumers rely on product information promoted by the companies responsible for product quality and advertising messages (Is Wal-Mart Good for America? 2004). Also, the nature of ethical standards is one of the key issues to be addressed by personnel managers operating in a large corporation. There should gradually be a growing together of national practice on working hours and insensitive. CSR involves the equal opportunity for all staff, although there may be sharp disagreement about what exactly that means in practice. Concentrating for the moment on the delivery of the service, a values-driven approach to specification will consider issues of humanity, whether in a transient encounter or a long-term relationship (Ferdinand, 2007). Timeliness, responsiveness and flexibility, courtesy and friendliness, availability and access, sympathy and support, understanding and guidance; all these, and others such as respect and confidentiality, have to be considered as elements in CSR where the felt experience of the client is at least as important as, if not more so than, procedural or technical precision.
CSR can collect many benefits for a business including obtaining high standards of performance at all levels of the workforce and reducing anxiety and confusion over what is acceptable employee conduct. It is important to note that a company’s staff should believe that the prestige of the company and its strong corporate culture removed the need for a written law of CSR (Ferdinand, 2007). Customers, employees, and suppliers should all be treated in a manner equitable and proper in their country. Prices should be set at a level that will be viewed as reasonable or fair, according to the conditions in the target market. Thus, Friedman underlines that “there are no vales, no ‘social’ responsibilities in any sense other that shared values and responsibilities of individuals” (Friedman, pp. 284-285). Social responsibility does not mean a decrease in profits. It means that the company should have CSR as a basic concept of its business. The code should address some aspects of the private lives of employees in so far as they affected the professional performance of the individual or the interests of the company. Prices should be set at a level that will be viewed as reasonable or fair, according to the conditions in the target market. Both dumping (selling at below the production or the cost of the product or service in the home market) prices which will be viewed as excessively high should be avoided. Sometimes the moral justification comes from a value system that is independent of the business itself and where individual opinion can be sharply divided.
Wal-Mart should change its business principles because only in this case it would be possible to maintain high standards and prevent unfair actions. Companies need to be concerned with issues related to products and services, promotion, and customers because a number of the issues are also the subject of legal requirements in many countries.
- Ferdinand, A. Wal-Mart Determined to Lead in Corporate Social Responsibility, 2007.
- Is Wal-Mart Good for America? TV program Online, 2004. Web.
- Friedman, M. The Social Responsibility of Business is to Increase its Profit. In L.P. Hartman, Perspectives in Business Ethics, McGraw-Hill/Irwin; 3 edition, 2005, pp. 280-