Research and read current papers
and journals and search the
Internet to find legal cases of firms
and/or executives of those firms
that have been charged with acting
unethically and socially
irresponsibly. Choose an ethical
dilemma in business that interests
you and draft a two to three page
single spaced paper as follows:
After finding a recent ethical
scandal in the business field,
please use the PICK Analysis
format, as described in the
syllabus, to summarize the
situation and discuss the legal
and/or ethical implications of the
actions as applied to business.
Then, discuss a recommendation
you would suggest about how the
ethical dilemma should be resolved
or should have been resolved,
despite the outcome reported.
[anonymous]
MG 201 – Business Law
Essay 1 – Business Ethics and the Law
Ethics is the study of how people act or behave. Business ethics is concerned with the principles and practices that an organization establishes to guide them in decision-making – what is right and wrong. In the past, ethics was developed as part of a healthy work environment, but in recent years businesses have adopted a more formal approach by having a written document called “A Code of Ethics.” This document was founded due to the upsurge in corporate scandals worldwide. It is also part of a company’s social responsibility, not just to its employees, but also to the public in general.
A company that has been known for their unscrupulous behavior is Wal-Mart – one the largest retail corporations in America and with locations worldwide. They are known for their guaranteed everyday low prices and discounts, and also their professional and courteous staff. But despite being a multi-billion dollar corporation, they demonstrate several unethical practices in running their business such as exploiting labor, discriminating, and providing deplorable working conditions for their employees in order to maximize profits. They also utilize cause marketing as a means of being in favor of stakeholders. A further analysis of the company will portray their unethical behavior.
We learned about the “Shareholder Model” of ethics in chapter two. “Economist Milton Friedman argued that corporations have two primary responsibilities. First, they must comply with the law. Second, they must make as much money as possible for shareholders” (Beatty, Samuelson, and Bredeson 31). Cause marketing is a technique used to keep existing customers and gain potential clients.
The Shareholder model simply means that there are two things a company must do: abide by the law, and be more concerned about shareholders interests’ i.e. earning money for owners of the company. They are not particularly concerned about the stakeholders who have vested interests in the company, mainly its employees. Cause marketing is a tactic used by several companies to enhance their image and will thus lead to increased business. As part of their corporate social responsibility, businesses may make charities and/or donations. They may also associate a particular product brand and cause together so that consumers, through their purchase, may feel as though they are also giving back to society.
It is apparent that Wal-Mart has adopted the shareholder model of ethics. Even though they have a thirty-three-page document of their “Statement of Ethics”, their daily practices differ vastly from what is outlined in it. Their Statement of Ethics includes almost every area that might pose an ethical challenge. Its’ founder Sam Walton had three basic beliefs – respect for the individual, service to our customers, and striving for excellence. During recent years, Wal-Mart boasted profits in the millions and sometimes even in the billions. Yet there are hundreds of cases against them by their employees for low wages, poor treatment, and even discrimination. There are also several newspaper and magazine articles highlighting their meager wages.
One headline in the Huffingtonpost.com reads, “Wal-Mart’s Internal Compensation Documents reveal Systematic Limit on Advancement.” The pay raise varies from 20 – 40 cents between each grade position. Thus there’s not much motivation to employees to work hard. That may be the cause of Wal-Mart’s high turnover rate, which is costly to any company. According to Forbes.com, “Wal-Mart continues to pay its workers as if their employees don’t actually need to eat more than once a week, live in an enclosed space and, on occasion, take their kids to see a doctor.” Even though is not illegal to treat their employees as such, it is unethical for them to do so. Their employees are the ones who work hard for the company to make it what it is.
It’s hard to believe that in today’s modern day society that discrimination still occurs. Discrimination is against the Equal Employment Opportunity Commission [EEOC]. Title VII of the Civil Rights Act of 1964 makes it “illegal to discriminate against someone on the basis of race, color, religion, national origin, or sex” (eeoc.gov). Wal-Mart has faced several lawsuits on the basis of discrimination. In one case of discrimination, Sylvester Johnson (a former commanding officer in the US Army) believed that, “he was ultimately terminated because he is black” (TheNation.com) while Wal-Mart claims that he was engaged in manipulating inventory. In this case they faced a federal discrimination lawsuit.
In another situation of discrimination, in the case of Wal-Mart v. Dukes Et Al, three former female employees filed a class action (on behalf of 1.5 million female employees) against them. This also violates the Title VII of the Civil Rights Act. These women claimed that they were paid less that their male counterparts and were denied promotions based on their gender.
As with any other business, Wal-Mart uses cause marketing to boost their appearance and increase their sales. One of their charitable donations is entitled “Women’s Economic Empowerment.” This is quite contradictory to what they practice. It is clearly a ploy that they are using because if they really cared about empowering women, they would start off by treating their own female employees with the same level of respect and professionalism that they do with their male employees. How can they seek to empower women when they are oppressing their own? Had they been truly exercising “Women Empowerment,” they would not have been facing a class action.
Wal-Mart, being a multi-billion dollar corporation, can afford to treat its all its employees with improved compensation and fairer practices. Wouldn’t it be less costly to treat employees better than to face exorbitant lawsuits? Also it can be seen that Wal-Mart is simply looking to increase their sales by advertising that they are helping the community with their donations.
Wal-Mart’s competitor Costco pays its employees better, and as a result has seen a higher percentage growth in sales than Wal-Mart, according to Forbes.com. It just goes to show that behaving ethically can pay off in the end. Behaving ethically starts off at the individual level. If one behaves ethically in his personally life, portraying good values and morale, then chances are that he will display that same judgment/behavior in the workplace if an ethical situation arises, even if the stakes are high.
Sometimes it is ethical to commit an illegal act, and some legal acts are unethical.
“Works Cited”
Beatty, Jeffrey, Susan Samuelson, and Dean Bredeson. Business Law and the Legal
Environment. 6th ed. Mason: Cengage Learning, 2014: 2024 – Essay Writing Service. Custom Essay Services Cheap. Print.
Equal Employment Opportunity Commission. U.S. Equal Employment Opportunity
Commission. EEOC, N.A. Web. 26 Sept. 2013.
Ungar, Rick. “Walmart Pays Workers Poorly And Sinks While Costco Pays Workers Well
And Sails-Proof That You Get What You Pay For.”Forbes.com. Forbes.com LLC. 17 Apr. 2013. Web. 26 Sept. 2013.
Wal-Mart v Dukes Et Al: http://www.supremecourt.gov/opinions/10pdf/10-277.pdf
Wal-Mart Stores: Statement of Ethics – http://cdn.walmartstores.com/statementofethics/pdf/U.S_SOE.pdf
Woodman, Spencer. “Former Walmart District Manager Accuses Company of Widespread
Inventory Manipulation.” TheNation.com. The Nation, 5 Apr. 2013. Web. 26 Sept. 2013.
