Business Ethics: Wal-Mart Employee Code of Conduct

Introduction

Ethics can be regarded as “the moral standards by which people judge behavior” (Bradburn 2001). In usual circumstances, ethics stipulates that a person should do onto others what he/she would have others do onto him/her. Many people have argued that this cannot apply to a business setting, where there are different players such as; the clients, shareholders, customers and even competitors. Thus, the concept of business ethics is complex and multi-faceted (Goree 2007). This paper seeks to describe business ethics and cite a case study of an organization that has experienced ethical issues.

Description of business ethics

Business ethics can be defined as ethics “that pertain to the moral rules and regulations governing the business world” (Bradburn 2001). This can also be said to be moral values that direct the way business organizations make decisions (Carr 1968). The laid down ethical code varies from business to business, but generally they often aim at the following main areas; “Honesty, Objectivity, Integrity, Carefulness, Openness, Respect for intellectual property, Confidentiality, Responsible publication, Responsible mentoring, Respect for colleagues, Social responsibility, Non-discrimination, Competence, Legality, Human subjects protection” (Bradburn 2001). Some ethical rules are always captured by the state laws. However, it is impossible for legislation to offer a complete guideline for business ethics as situations that lead to ethical dilemmas are varied. Basic ethical principles and beliefs are drawn from different sources (Goree 2007).

Most individuals tend to identify ethical principles with the following: The first is authority, under which something is considered right or wrong because someone important has said so, for instance stealing is considered ethically wrong because the government has made it illegal; the second source of ethical belief is culture. The idea of morality of an action depends on a person’s culture; a third source of ethical belief is intuition, in which the principles and knowledge of right and wrong are built within a person’s conscience. The dependence on intuition is quite common; the last source of ethical belief is reason. Logical thinking is often a primary tool in ethical judgement (Bradburn 2001). Currently, globalisation has created a new dimension to business ethics. For instance, Companies conducting business in different countries always come to face with different cultures that have varied views on what should or should not be considered as ethical. It is a normal occurrence for firms to outsource for cheaper labour on developing countries. This implies that the workers in those countries are paid less than their counter parts in the developed world. In such instances it becomes difficult to define the boundaries in business ethics, as many would view this as unethical. Many people have argued that, due to the competitive nature of business it is impossible to apply ethical ideals of the society. “Violations of ethical ideals of society are common in business, but are not necessarily violations of business practices” (Carr 1968).

Case study evaluation

A senior employee was fired in one of the world’s largest retailer, the Wal-Mart. Her crime was that the employee had violated the “company’s ethics policy by accepting discounts on personal gifts from vendors and other individuals who were eager to work with the company or sign contracts” (Gress 2009). In one instance the employee was found to have received gifts from an advertising which was later selected to carry out the advertisements for the company. Mrs Roehm was further accused of wrongly using the company’s “travel trips with a subordinate with whom it was claimed that, she was romantically involved” (Gress 2009).

In counter attack, the employee claimed that the Company’s CEO who violated the ethical code. She told a court that the company’s CEO received preferential treatment from another company that had “exclusive rights to purchase unsold Wal-mart merchandise” (Thompson 2008). The troubled employee revealed that Wal-mart’s CEO had a more than just business relationship with the Mr Jacobs, the CEO of the other company. She filed a suite claiming that, the CEO had in some occasions “used private aeroplanes provided by Mr Jacobs to travel to private vacation residences” (Gress 2009). The Wal-mart’s spokesperson came out strongly defending the CEO from the accusation; he claimed that the allegations against the CEO and Mr Jacobs were untrue. In her own defence, Roehm refuted the accusations that she favoured some advertising agencies in order to be employed in one of the agencies. “She also denied accepting gifts from one of the advertising agencies” (Gress 2009).

Considering the above case, it can be said that Mrs Roehm breached the company’s code of conduct that led to her sacking. The company’s code for management of business dealings follows the principle of fairness, correctness, transparency and openness to the market (Thompson 2008). The code stipulates that, the promotional dealings, even they are designed to pursue the corporate purpose, must never turn into acts going against the law (Gress 2009). In regard to presents, gifts, and other benefits, the code stipulates that in relation with customers, suppliers, and third party in general, no personal offers or concessions –either direct or indirect – of money, gifts or any other benefits aiming to obtain undue advantages – either real or apparent of any kind (e.g. promises of economic benefits, favours, recommendations and promise of job offers and so on) or in any case designed to acquire or assure preferential treatment in conducting any activity relating to the company (Gress 2009). However, the company’s ethical code accepts acts of commercial courtesy as long as they are of modest value and performed in observance of any regulations applicable (Thompson 2008).

As seen in the above part of the code, Mrs Roehm actions were wrong and therefore it was justified for the company to terminate her employment. The counter allegations levelled against the CEO may be true but Mrs Roehm needs to provide proof for the appropriate course of action to be taken.

Conclusion

As seen from above brief description, business ethics is a very difficult concept to apply. For instance due to current realities, an organisation may do whatever it takes to remain relevant in the market place and more finds itself breaching business ethics without intent.

Reference list

Bradburn, R. (2001) Understanding Business Ethics. New York: Continuum.

Carr, A. (1968) Is Business Bluffing Ethical. New York: Harvard College.

Goree, K. (2007) Ethics in the Workplace. USA: Thomson South-Western.

Gress, J. (2009) Breach of Business ethics. London: Reuters.

Thompson, R. (2008) Short-Term Profit vs. Long-term Gain: Is Honesty Still the Best Policy. Missouri: The Physician Executive.