Wal-Mart: Stakeholders Analysis - Case Study Example

Name: Instructor: Course: Date: Wal-Mart Case Study: Stakeholders Analysis In the case, the Alejandra and David Barstow, the two journalists who followed and aired out the story is the first stakeholder. The two were very critical in this case of Wal-Mart lawless mechanism of trying to shape out an empire in Mexico such that they were applauded by the media and business world. They were influenced by the power of driving out the vice of corruption and urgency of maintaining ethical business across the globe. Since they are Journalists and before they aired the episode, they had substantial evidence, Wal-Mart should involve and collaborate with them in ensuring that the company is back on track. This will yield more benefits since stakeholders will not be withdrawing their shares due to fear. Moreover, Wal-Mart should ensure that these journalists are safeguarded or monitored since this information can help in their investigations. The second stakeholder is the regimes of both countries of Mexico and the U.S. These governments immediately came into action and setup up committees that will brief them and report on this matter after their laws were violated. They two governments used the power and legitimacy they had in issuing licenses and safeguarding the law to ensure it is not breached to enrich some corporate (Friedman and Miles 96). This is an unethical practice, and Wal-Mart should engage them in streamlining their activities. The third stakeholder is the CEO, LeeScott Junior, who after Wal-Mart set up a team for its own investigation, outrageously criticized them on the ground that they were trying to treat officials with much aggressiveness. The CEO used the power of his legitimate position to influence the issuance of bribe. In this case, Wal-Mart should monitor all his records and conduct to ensure that all partakers are arbitrated. Eduardo Castro Wright is the fourth stakeholder. He was the man behind the bribery racket plan and instead of being convicted, in the year 2008; he was promoted to a post of the company’s vice chairperson. Eduardo is an influential person, and he used the urgency Wal-Mart had in expanding its chains to buy off his promotion. Wal-Mart should involve and defend him in order to realize the information can help in settling the issue. Nevertheless, he should be punished for his actions. The man behind Wal-Mart’s international business, Michael Duke is the fifth stakeholder. He tried with all might to downplay the whole matter in the media. Similarly, he was never convicted rather he became the company’s CEO. Both Duke and Eduardo should be treated the same because they are influential, and they used their power to buy off their promotion. The sixth stakeholder is the Mexican counsel. The counsel tried to put an end to the whole issue under the influence of Bentonville to management who in their report argued that there was nothing wrong with the incident. He used his legitimate power as a counsel to block the case. Since he seems to know much, he should be monitored. The final stakeholder is the investors who were hurt by the whole issue and responded by criticizing the firm’s policies and market prices. They are withdrawing their shares out of fear since the company’s reputation is at stake. Wal-Mart should collaborate with them, defend and involve them in all activities so that they can overcome their fear. On the economic, legal, ethical, and philanthropic duty, Wal-Mart’s first expectation of its stakeholders is to be profitable. The economic duty it owes each of these stakeholders is to maximize its profits. Consequently, companies that do not show a profit often will see shares falling, and it can run to bankruptcy. Therefore, even meeting the legal, ethical, and philanthropic duty will be a challenge. Nevertheless, profit maximization must be achieved through legal practices. The stakeholders require the business to follow the law just as they are required to maximize profits. In this scandal, even when the whole bribery case came into the limelight, the executives condoned their unethical practices and even promoted some partakers of the case to a higher level in the company hence failing on their legal responsibility. Moreover, even the top executives were promoting the illegal practice for a number of years, and until the scandal was out, no action was taken for those who were found guilty of breaking the law. Since they paid bribes to local authorities that are entrusted with keeping the law, they committed a high kind of business sin to Mexican people. On the ethical point of view, Wal-Mart was extremely deceitful because even often they ensured that the matter did not reach the Boards of Directors at the firm`s headquarters. In addition, it was not following the words it labels itself with. For instance, its retail chain labeled itself as the most ethical firm across the globe but it was criticized for not following its words. They not only failed the Mexico people by not following the regime regulations but as well violated the Foreign Corrupt Practices legislation. Although Wal-Mart’s code of conducts, ethics, and compliance regulations are well articulated, they failed to adhere to all these. On the other hand, although Wal-Mart as a company has been extensively praised for their philanthropic activities, particularly in contributing to charitable organizations, the whole scandal has reduced the high regards. The issuance of bribes affected the Mexicans people negatively in their fight against corruption and improved their economy. Therefore, the company failed its duty of being a good corporate since the cash contribution they offered from illegal practices that were done at the expense of people of Mexico. Wal-Mart is expected by its stakeholders to fulfill their economic, ethical, legal, and philanthropic duties. Nevertheless, to fulfill them through illegal practices but to ensure that they maximize profit when obeying the law, conduct ethical practices and be a good business citizen. Looking at this scandal from the ethical point of view or four normative theories, Wal-Mart paying off its way, in order to expand through the issuance of the bribe is automatically wrong. From the profit maximization or individualism theory point of view, every business when making the profit must consider the human right and the law. In this analysis, we will assume that Wal-Mart is guilty since it ignored the well-being of everyone and anything in order to maximize its profits. In addition, there is substantial evidence that Wal-Mart paid bribes to a foreign official. Therefore, even the profit that they received unlawfully will not qualify as satisfactory under individualism theory. From the time they started issuing the bribes, they knew they are doing something unlawful. Consequently, although the theory would support the idea that they may have harmed people in order to maximize profit and expand its business, individualism concept will not support them in this case because they achieved profits through illegal practices. On the other hand, these bribes did not only harm people of the communities but it as well has a negative impact on the company's image. Being that Wal-Mart is among the largest corporation across the globe, this scandal will not only affect the de-Mexico subsidiary, but also all companies across the globe. Therefore, the profit maximization theory would argue that it is a horrible choice to pay off their way, as they will lose the profit. From the utilitarianism ethical point of view, what we should consider is if the issuance of the bribe is the best thing for Wal-Mart to achieve best. Automatically, the answer is no because since this scandal the business has been losing and decreasing as stakeholders are withdrawing their capital out of fear. If the case continues like this, the stakeholders and the company will lose a big deal. Therefore, to change the situation, Wal-Mart should construct another company in another location in Mexico since there is still room for other even bigger than that one. Moreover, the company should have waited for the company to grow over time rather than bribing its way to lead the market. From universalism theory point of view, every person has a responsibility to treat people equally and with respect. However, because every person has this same responsibility to every individual, this right to be treated equally and with respect should be as an end but not only as a means. In this case of Wal-Mart, in most part, it did not follow the concept because, in the end, the fall of shares due to fear is affecting the stakeholders. Nevertheless, it bribed it way to gain the lead and sustain the shares value. In the whole scandal, there is no evidence that Wal-Mart treated anyone only as a mean and not as an end. Therefore, they conformed to this theory because they just wanted to prosper in Mexico although even if they did not issue bribes they would have succeeded. Finally, from the right theory that follow four main virtues; honesty, courage, justice and temperance, Walmart conduct was unethical. First, they had no courage to follow the right path and avoid bribes. In reality, they were not honest to Mexicans who are their clients as they ran behind their back and maximized their profit at their expense. Moreover, they tried to cover up their dishonest act of bribery. Other than that, they had no self-control because driven by their greed they put their company name at stake. Moreover, they did not follow justice because they gained an illegal edge on their competition in order to maximize the easy way. The right theory disagrees with their action. Nevertheless, before the onset of this scandal, Wal-Mart could have said yes to all these recommendation but they have crumbled their reputation and no longer can they say they follow the right path. Work Cited Friedman, Andrew, and Samantha Miles. Stakeholders: Theory and Practice: Theory and Practice. Oxford: Oxford University Press, 2006. Print   Bottom of Form Read More