The paper 'Wal-Mart de Mexico Issues' is a wonderful example of a Business Case Study. The locals in Mexico and the US are one of the biggest stakeholders in the company. One of their biggest attributes is legitimacy. The reports about corruption in the country are legitimate and affect them directly. Losses due to corruption in the country are one of the highest anywhere in the world. The business culture of corruption in the country results in losses of billions, which would otherwise have profited the country in other ways. Wal-Mart paid bribes in order to avoid the consequences of not following zoning laws, which help in the planning of cities and towns.
They also paid to avoid environmental impact fees. These allowed them to conduct business with disregard for the environment, without fear of consequences. These actions affected Mexican citizens the most. This is especially true considering the fact that Wal-Mart is the largest private employer in the country. In the US, there were reports of the company driving small local businesses out of business. Shareholders and investors are other groups of stakeholders in the case.
They invest their money into the company and expect to get returns on their investment when the company makes profits. They have the power to control the company’ s business direction and react to such allegations in order to protect their positions and investments in the company. Evidence of this is seen by the reaction of Wall Street analysts to the publicity that Wal-Mart was receiving at the time. The law allows shareholders to submit proposals to the company, and vote on governance issues. Top executives, both in Mexico and the company headquarters in the United States are another group of stakeholders in the case.
After the revelations by the former executive in charge of real estate, the company, through its executives, decided to act with urgency and conduct an internal investigation into the matter. After internal investigators wrote to the company giving detailed reports and evidence, the top executives had to act, calling in procurement officers for a dressing down after the corruption scandal reached alarming heights. Company employees are the fourth group of stakeholders in the case.
According to reports, the employees suffered such injustices as being forced to work overtime without pay and the company fighting efforts to unionize. The jobs offered to employees did not come with benefits, and the employees had to rely on Medicaid for their healthcare. Employees had the attribute of legitimacy, especially after the compelling evidence revealed by the documentary movie the high price of low cost. Protests against the expansion of Wal-Mart into the urban market from the rural and suburban regions only indicate the legitimacy of these injustices on employees. Another stakeholder in the case is the US government and financial authorities.
The authorities, through the justice department and the Securities and Exchange Commission, have the power and responsibility of enforcing the Foreign Corrupt Practices Act. The legislation allows the government to charge a US company if they find evidence of bribery overseas. The power of the government is seen when the company’ s top executives summon its procurement officers in part due to the pressure of government investigations.
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