It should be admitted that ethical framework of the company constitutes the biggest problem for the managers taking their problems with stakeholders and suppliers into consideration. Pertaining to company’s differences with suppliers, Wal-Mart is more concerned with reducing prices and maximizing the operational excellence thus shifting cost obligation onto suppliers. Ethically viewing the problem, the organization is not interested in their suppliers’ ongoing partnership but in their products. Such negligence toward its partners creates unfavorable prerequisites for conducting business in future with other businesses in different countries.
Analyzing the ethical problem from the perspective of Forces Analysis, Wal-Mart has failed to consider all the aspect of the suppliers’ bargaining power which is presented in the form of input market. The company has also failed to regard the possibility of suppliers’ refusal to work with them even despite its respectable status. In addition to this, Wal-Mart’s negative attitude to labor unions can provoke discord among the employees leading to decline of profitability level.
The same problem is also connected with the way the company treat its personnel despite having the status of the largest retailers in the world. Being extremely criticized for absence of benefits and low wages, the company has been also charged with insufficient observance of health insurance schemes. Once again, Wal-Mart’s accent on productivity and profitability has negatively affected its international image. Certainly, the implementation of health benefits and lower taxation is a significant step for improvement, but still there a plethora of aspects that should be immediately tackled by the organization. Particular, there should be a total reevaluation of the role of employees within the organization in case managers want to preserve the competitive advantage, which are considered to be inherently connected. This is why by failing to provide favorable working conditions for employees can lead to the entry of new companies with more advantageous conditions for employees.
The company’s strategy toward their rivals is also full of discords and contradictions which are connected with their low-price orientation. In fact, this unilateral strategy can hamper their global penetration and partnership with other international companies. As a way-out from this situation, Wal-Mart leaders should be attained to another method of raising the competitiveness. First of all, it should choose the policy of constant changes and innovation, increase the advertizing costs, and work out powerful and sound competitive strategies based on increasing product quality. Apart from this, the company should develop an online network for creating the visibility of the company’s status and position, its philosophy and management strategies. This approach will lessen the influence of yellow press.
The rise of productivity can be achieved through active cooperation rather than suppression and discouragement. In this respect, the approval of labor union is crucial, since committees and conferences conducted can promote the employees’ interest in the working process, they will feel an evident support on the company’s part. Additional, the realization of human problems is the basic to business success, as human factor is the leading one in commercial relations. In that regard, the lack of understanding of the social problems can lead Wal-Mart to destruction. More important the company is threatened to lose its reputation on the international arena, thus frustrating its goals concerning the global integration.