The case of Wal-Mart de Mexico is a complex one and entails severalethical, social, political, and economic issues. There are rules thatwere violated in the company’s policyabout ethics, which states that an ethicsproblem must never be covered up or ignored. At the same time, thevice chairperson was warning about thenegative effects of corruption on thecompany in the face of the US government’s stiffened laws againstcorruption overseas. The situation is complex, and my advice to theCEO is that he should own up the mistakes done and face the publicwithout trying to cover up the scandal. This paper will provide astakeholder analysis and discuss the various ethical issues involvedas it supports my take on the matter.
The major stakeholders involved in this matter include the Mexicangovernment, Mexican public, US public, Wal-Mart Legal Council, USgovernment, US media, Mexican media, and Wal-Mart executives. Thediagram below can be used to categorize the stakeholders in order ofpower and interest.
Wal-Mart Legal Council
The Wal-Mart Executives and the US government have high power andinterest in this matter. As the vicechairperson warned during a meeting withWal-Marts top procurement executives, the government had renewed itscommitment to the Foreign Corrupt Practices Act, which implied thatif the executives failed to take the right action, they would becondoning crime. Therefore, it would be inthe executives’ best interest to secure the support of thegovernment in the matter. The government is both powerful and has abig stake in the company and is highly interested in how companieswithin its jurisdiction run their businesses. Similarly, Wal-Martexecutives have high interest in the matter because they are the faceof the company and it is their responsibility to uphold the company’sethical values. They want to ensure that business happens in theright way. This group also has the power to make decisions and upholdcompany policies. The two groups need to be observed closely(Schmeer, p 1-33).
The US media, the Mexican governmentand Wal-Mart’s legal counsel fall underone group that has power but little interest in the matter. Thesegroups are not affected in any way by thebribery scandal or the company ethical policy that the executivesneed to uphold. They are affected the least by these actions yet theyhave great power in influencing how the procedure unfolds. The mediahas the power to ensure that the whole scandal isknown by everybody, which may not be good for business. Allthe criticism that it brings is bad for business. The Mexicangovernment has the power to follow up on the investigation andpossibly shut Wal-Mart stores in the country. However, it cannot dothat because as the executives who were involvedin the scandal claimed, things are different in Mexico. The legalcounsel is burdenedwith the task of protecting the company from external and internallegal threats. They influence the whole outcome of the scandal andformulate ways of backing the decision of the executives. This groupneeds to be kept satisfied (Schmeer, p 1-33).
The US public and Mexican media fall under the group that is highlyinterested but has no power. They simply need to be informed aboutthe steps the company has taken to remediate the situation. Theinterest of the US public is important to business because people maydecide to boycott Wal-Mart stores and cause economic disaster. Likeany media in any country, the Mexican media will be interested in astory to write about, but have little to do about it. The Mexicanpublic is the weakest. It simply needs to be monitored for changes.Since the country is very corrupt, people are used to stories ofcorruption and will not be interested in another other. They alsolack the power that would make them of interest to the executives(Schmeer, p 1-33).
Corporate Social Responsibility
The decision to make the results of the investigation public is ahuge step towards corporate responsibility. The company owes thepublic transparency in its operations and by making the resultspublic, it shows that it cares about its consumers. People have theright to know what is happening in the company since they are theconsumers of the products produced. The company will have contributedto the society’s efforts to eliminate corruption, especially inMexico. This form of corporate responsibility with issupported by various stakeholders, including the USgovernment, the US and Mexican media, Wal-Mart executives, Mexicanpublic and US public. However, strong critics in the US public mayensue again given that the company had previously gotten involved inanother public scandal. If Wal-Mart exposes corruption within itsranks, it becomes a better corporate citizen that cares about thesociety within which it operates (D’Amato, Henderson, &Florence,p 1).
Integrity is an important ethical issue in business that must berespected and upheld at all times. Wal-Mart is a company thatoperates with integrity as one of the major governing values. Companypolicy recognizes the need for maintaining integrity by outlining aclear process to be followed in operations.Further, the policy states that all ethicalissues must never be ignored. With such apolicy, the company demonstrates a high level of integrity in thesociety where it operates. The company exercises integrity in manyrespects one of them includes the acquisition process. Theacquisition is supposed to happen in a competitive mannerwithout breaking any laws of the country where operations arehappening. There is a well-defined channel for whistle-blowingand reporting unethical behavior. It takes integrity for a company toinstall such practices in its operations publicly. ImmediatelyWal-Mart received an email concerning briberyand the concealment of financial records, a team of investigators wasdispatched fast to investigate the situation. The investigation wasconducted with integrity while operations continued as normal.Interviews were held by necessary parties,and the whole scandal unearthed. The investigators then notified theexisting members of the executive about the findings of theirinvestigation. Integrity was maintainedamong the workers at all time. As a business, Wal-Mart isprofessional to its employees, consumers, and governments (Nathan, p13-18).
However, the company’s heart was tested by the over-ambitiousexecutives who broke its code of conduct in their bid to expand thebusiness. Although revealing the results tothe public may stop growth for a while, integrity must be preservedat all costs.
Given the company’s track record in being a good corporatecitizen, it is not worth overlooking misdoings that no stakeholderwould tolerate. By deciding to uphold the company’s ethics andvalues, the CEO will be preserving it before the public eye. Peoplecount on Wal-Mart to abide by its valuesand code of ethics. As such, revealing the results to the publicwould be a fulfillment of expectations. Important stakeholders in theUS and Mexico will be moved by the boldmove and pride themselves in a company that still understands ethicsin a world that is losing its edge.
The US media will be directed at attackingthe culprits who perpetuated corruptionwhile the company will be credited for boldly coming out to upholdits values even in the face of possible harm. The US government willbe saved the time and resources to have to start doing itsinvestigation into the whole matter ifWal-Mart handed the offenders over. As Istated before, failure to report the scandal would be viewed as acollaboration with the offenders and the executive members would bebrought under charges too.
In conclusion, it is my advice to the CEO of Wal-Mart to take optionnumber three and turn the results of the investigation over to thepublic. There will be possible attacks that will result, but theempathy and admiration that will accompany it will be beneficial inthe long-term. By revealing the results, the company remains to be agood corporate citizen that upholds their values and code of ethics.Stakeholders who matter the most in both countries will most likelysupport the move and stay on the side of the CEO. After all, this isthe move that is expected if companypolicies are to be followed to the latter.
D’Amato, Alessia, Sybil Henderson, and Sue Florence. "Corporatesocial responsibility and sustainable business." Greensboro,North Carolina: Center for Creative Leadership (2009).
Hurst, Nathan E. "Corporate ethics, governance and socialresponsibility: Comparing European business practices to those in theUnited States." A Study Conducted forthe Business and Organizational Ethics Partnership Markkula Centerfor Applied Ethics Santa Clara University, Spring (2004).
Schmeer, Kammi. "Stakeholder analysis guidelines." Policytoolkit for strengthening health sector reform (1999): 1-33.