Walmart: Social Corporate Responsibility

Subject: Business Ethics
Pages: 10
Words: 2752
Reading time:
10 min
Study level: PhD

Introduction

Corporate social responsibility has gained popularity among corporate bodies in the recent past. According to Rhode (2006), corporate social responsibility has been considered as the way through which a firm can give back to society what it takes from it in the form of profits it gets, the employees it hires, and the effluents it releases to the environment. However, different people have viewed social responsibility from different angles. For instance, looking at Friedman’s perspective of social responsibility, firms only need to earn profits because this is the very essence of their existence. Some scholars have considered this as a self-centered approach that firms should avoid in the current society. Brest (2008) says that in the current competitive business environment, a firm must base its development on all the pillars of sustainability if it intends to achieve success. These contradicting views about corporate social responsibility have raised debates on the best approach a firm should take when dealing with social responsibility. It is important to come up with a clear understanding of the best approach firms should take when dealing with the issue of corporate social responsibility. This paper seeks to develop a plan that would reconcile different opinions about organizational philanthropy. The research will be based on Walmart, a large retail store that the researcher worked for in the past.

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Organizational Philanthropy

According to Sievers (2010), corporate social responsibility has generally been considered to mean the same thing as organizational philanthropy. Although different people would argue differently over this issue, this scholar notes that the two may not have a lot of difference. This is because when planning to give back to society, a firm must be prepared to be philanthropic. This may be in the form of giving direct financial benefits to members of the society or using its resources to support nature in one way or the other. Organizational philanthropy has become a common practice, especially with large firms such as Walmart. Walmart operates in a highly competitive market. As Rhode (2006) observes, this stiff competition makes it necessary for it to develop a positive image in the market. This has forced firms to devise methods through which they can gain public trust and win their affection. One of the ways of achieving this is to become philanthropic. The argument as to how much a firm should give out may be based on the size of the firm itself (Brest, 2008). Large firms like Walmart should make an effort to give more. This is so because their operations cover large regions, which means that their impact on the environment is also massive.

Walmart serves over one million customers a day in its North American markets alone (Mullerat & Brennan, 2011). The items are always wrapped in papers that are not biodegradable. This means that this firm’s operations massively pollute the environment. This pollution leads to a series of other environmental issues that would affect the public either directly or indirectly. It is also important to note that employees, customers, and other stakeholders of this firm come from the society within which it operates. This firm should be philanthropic to this society because it offers sustainability. In his definition of humanitarianism theory, Brest (2008) says, “Humanitarianism is an ethic of kindness, benevolence, and sympathy extended universally and impartially to all human beings.” This theory emphasizes the need to be ethical to society and the environment. It also focuses on a positive relationship that individuals and firms should have towards each other. Utilitarianism theory also emphasizes the need for members of the society to try to reduce the suffering of other members of the society by being philanthropic (Mill & Bentham, 2004). The theory holds that individuals and institutions have the responsibility of creating happiness for other members of society whenever this is within their capacity. In this regard, firms should always give depending on their size and the level at which their operations affect the environment. Walmart should give society an equivalent to what its operations take from it.

In selecting philanthropic priorities, the focus should always be based on the prevailing environmental or societal issues. For instance, in the United States, Walmart should give priority to environmental protection. Its strategies should always be focused on finding the best strategy through which it can help fight environmental pollution. In developing states, this firm can consider extending financial benefits to charitable organizations or individuals struggling with their education. As Rhode (2006) notes, different societies will have different social needs.

The Relationship between the Plan and Walmart’s Statement of Mission and Values

According to Rhode (2006), firms always use their statement of mission and core values to define the path to be taken in their operations. Walmart is one of the largest firms in the world. It is currently ranked as the largest retailer with a global market coverage. It has set missions and core values that define all its activities in society. This plan must be in line with the existing mission statement and the firm’s values for it to achieve the desired goals. One of the leading mission statements of this firm states as follows:

At Walmart, helping people live better has always been core to our mission and the foundation of our business (Mullerat & Brennan, 2011).

This statement focuses on the well-being of the members of society. The mission statement is in line with the planned approach that this firm would take in its philanthropic activities. According to Roberson (2006), when focusing on the interest of society members, a firm should determine how its effluents affect them, how it can create jobs for them as a way of improving their social status, and how it can help in the development of social amenities that they use. The mission statement is given above clearly states that this firm is committed to helping people lead better lives. To live to this mission statement, the firm must consider the factors given above. Walmart should start by assessing its levels of pollution to the environment. It should channel some of its finances towards fighting this pollution. This may include elaborate projects that are focused on tree planting, elimination of plastic wastes, or awareness creation on the importance of being responsible to the environment. The firm should then develop programs that would help in developing social amenities in the societies it operates. This may include donating to schools, hospitals, and other charitable organizations that are working to elevate the living standards of society members. The firm should also understand the changing environmental needs. It should make necessary changes based on the changing environmental patterns when defining the most appropriate strategy to take.

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It is equally important to ensure that the plan is in line with the values set by the firm. As evident in the company’s website, the core value that this firm cherishes in its operations is its commitment to society and the environment. The planned philanthropic strategy that this firm should employ focuses on the two factors. Just as the statement of values for this firm cherishes the importance of the society and the environment, the plan will be on the best approach these two factors can be enhanced in the firm’s operations.

The Role of Diversity in the Development of Philanthropic Plans

As mentioned above, Walmart has a global market coverage. It has stores in both developing and developed nations. It is important to understand that in these different regions, cultural diversity will be witnessed in various forms. According to Brest (2008), cultural diversity plays an important role in defining the strategies that a firm must use in its operations. What Americans find interesting may be abhorred in the Kingdom of Saudi Arabia. This means that this firm must understand each market, and determine strategies that would be most appropriate for the individual market. Diversity plays an important role in the development of philanthropic plans. As such, the management of this firm should treat the individual market as unique as can be possible.

Walmart should define the regions in which it operates. This should be done based on demographical factors. When this is done, the activities that should be undertaken must then be clearly stated. This would help the firm understand what is urgently needed in that particular society. As stated, some regions would have environmental conservation as the most urgent need, while others may need financial help to sustain the life of some members of the society. In regions where the urgent need is to offer financial help or material benefit to the members of the society, Walmart should understand the diversity that exists in that society. For instance, if the decision is to offer food items, Walmart must realize that some cultural groups do not eat some types of food. Presenting pork to Muslim society as part of humanitarian support would earn this firm contempt in that particular society. Muslims do not eat pork. However, when the same was to be presented to a Christian society, it would receive massive acceptance. For this reason, the firm must understand the diversity that exists before making any donations. Otherwise, the donation may help in earning it more hatred than affection.

Addressing Legal and Ethical Issues of Bias When Developing Philanthropic and Corporate Giving Plans

According to Hartman and DesJardins (2011), there has been a problem of bias in many firms when developing philanthropic and corporate giving plans. These scholars state that on most occasions, the planners would want to consider awarding those who are of direct benefit to the firm. Some of these firms would also consider awarding only those whom they consider to be in line with their normal operations. However, the truth is that this is a misguided opinion that should be avoided by firms when planning philanthropic strategies. For instance, cigarette-manufacturing firms may want to consider targeting smokers with their philanthropic strategies. However, their activities also affect non-smokers. This plan should, therefore, avoid any form of bias based on such issues as gender, ethnicity, race, disability, or orientation.

Brest (2008) notes that gender bias can be eliminated during such plans by ensuring that the planners are not only gender-balanced but also understand the legal and ethical standards about gender discrimination. At one moment, society was focused on empowering male children. Then there was an era of strong campaigns for girl child empowerment. These two eras are long gone. Society is now focusing on empowering both men and women in equal measures. This is the premise upon which the strategies of this firm should be based. This plan is comprehensive, and it covers all the regions where Walmart has stores. This global coverage will eliminate any form of racial or ethnic bias. To avoid any bias on an individual’s orientation or disability when giving out any benefits, the planners must set a given percentage of the total value to the disadvantaged groups. Questions that may lead to the revelation of an individual’s orientation should also be avoided, especially if they can be a possible source of bias.

In this plan, the management must appreciate the fact that discrimination can be looked at from two angles. There is the legal angle and the ethical angle. From the legal angle, the firm must know that the law prohibits actions that may demonstrate direct discrimination against a given group, or favoritism towards another group. For instance, it may be considered illegal when Walmart goes to a school and offers all Hispanic students packets of milk while denying other races.

It is a fact that this firm has the liberty to choose those whom it is planning to offer benefits to within the society. However, this liberty does not give it express authority to demonstrate to society that some members are superior to others. Such a move can be challenged in a court of law as a move by the firm to introduce social segregation in such institutions, something that can result in disharmony in society. Members of such institutions may start identifying themselves in such lines, and this may make society chaotic. This means that instead of philanthropic actions to bring joy and harmony to society, it would bring chaos and hatred. When put upon ethical scales, such actions would be considered to be below the standards. In case the firm uses its vast resources to win a court case, it may not be able to avoid the negative publicity in society. This negative publicity can be so bad that the firm can be forced to stop operating in some regions. The firm may risk losing a huge portion of its market if the case is not handled as appropriately as it should. This plan should, therefore, be seamless when addressing the issue of bias towards or against any social groups.

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Enhancing Walmart’s Social Responsibility through Corporate Philanthropy

Corporate social responsibility is a fast overtaking advertisement as the best way of creating awareness of a firm and in building a strong relationship between a firm and its market. The research by Amato and Amato (2007) shows that corporate responsibility has gained relevance as the most appropriate method through which firms can promote their brand image in the market. Corporate philanthropy is one of the best approaches that a firm can deal with in its corporate social responsibility strategies. Walmart’s social responsibility can best be enhanced through corporate philanthropy. Plans should be developed that will help the firm identify the most sensitive areas of need in specific societies. For instance, in its operations in Maryland State in the United States, the focus should not be on giving out handouts because people in this region are generally rich. They may not expect financial handouts from this firm. However, this does not mean that they do not expect any form of support. The firm should support environmental organizations in this region by giving out donations to help improve the condition of the environment. In regions such as Africa and the Middle East, the firm should consider such projects that would help enhance the living standards of the poor. This may involve direct support of school-going children by paying part of their school fees. To ensure that its donation gives the relevant impact, it should be focused on issues that affect society to greater levels.

Implication on the Ethics of Giving if Walmart Receives Substantial Goodwill from its Beneficiaries

As Valor (2007) states, firms always engage in social responsibility to earn a positive image in the market and to create a positive environment where they can operate peacefully. Walmart’s desire in implementing this plan is to earn goodwill from the beneficiaries and to the entire society. It is a fact that any good deed that an individual receives from anyone or any entity will always remain imprinted in the mind. This is especially so if the individual was not entitled to the benefit that was given. If Walmart becomes consistent in its philanthropic practices, and the management ensures that the strategies employed in implementing these practices are not biased, there will be goodwill not only from the beneficiaries but also from the society in general. Society will realize that the intention of the firm is not self-centered but genuinely focused on enhancing the well-being of the members of the society.

If Walmart receives substantial goodwill or preferred relationship from its beneficiaries and the society in general, its ethics of giving will be enhanced. The firm will increase its allocation of funds to this project. This is because the firm shall have realized the direct benefit of this undertaking. Any firm in the market aims to create a preferred relationship with the market. If this strategy helps it create this preferred relationship, then it is likely that the firm may engage in it even more to increase the level of this preferred relationship.

Conclusion

In the current business society, firms have come to realize that corporate social responsibility is an important activity that cannot be avoided. Corporate philanthropy has been considered as the most appropriate method that firms can take as their social responsibility. When developing plans on corporate philanthropy, it is always necessary to consider aligning the plans with the corporate missions and values of the firm. This will help in smoothening the process of implementing the plans. It is also important to ensure that ethics is maintained when developing such strategies. All forms of bias should be eliminated. If done properly, ethics of giving can earn this firm preferred relationship in the market.

References

Amato, L.H., & Amato, C.H. (2007). The effects of firm size and industry on corporate giving. Journal of Business Ethics, 72(3), 229-241.

Brest, P. (2008). Money Well Spent: A Strategic Plan for Smart Philanthropy. New York: Wiley & Sons.

Hartman, L. P., & DesJardins, J. R. (2011). Business ethics: Decision-making for personal integrity & social responsibility. New York: McGraw-Hill.

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Mullerat, R., & Brennan, D. (2011). Corporate social responsibility: The corporate governance of the 21st century. Alphen aan den Rijn: Kluwer Law International.

Rhode, D. L. (2006). Moral leadership: The theory and practice of power, judgment, and policy. San Francisco: John Wiley & Sons.

Roberson, Q. (2006). Disentangling the meanings of diversity and inclusion in organizations. Group and Organization Management, 31(2), 212-236.

Sievers, B. R. (2010). Civil Society, Philanthropy, and the Fate of the Commons. Hanover: Tufts University Press.

Valor, C. (2007). A global strategic plan for corporate philanthropy. Corporate Communications, 12(3), 280- 297.

Mill, J. S., & Bentham, J. (2004). Utilitarianism. Harmondsworth, Middlesex: Penguin Books.