“Social responsibility is the practice of producing goods and services in a way that is not harmful to society or the environment”. (Cambridge Dictionary Online, 2013) Walmart holds many accolades in the business world. It bosts over $400 billion in revenue annually. If this number were converted into GDP Walmart would have a larger economy than many countries combined and make it the 23rd largest economy in the world. Walmart and its holdings employs over 2.1 million employees making it the largest employer in the United States. What does this mean? It means Walmart is a bohemoth in the business world. Walmart has successfully made itself available to United States.
By doing so it also placed itself on the spotlight because of many questionable, ethical or environmentally innappropriate decisions. Walmart is sued approximately every two hours and is currently involved in litigation consisting of 1.6 million employees in the largest discrimination class action law suit with the potential cost to walmart over $11 billion. Walmart has also been found guilty of dumping hazardous waste. July 28, 2013 walmart pled guilty to improperly disposing of pesticides, fertilizer, and hazardous materials. These types of hazardous materials were disposed of down the drain and also tossed into trash recepticals.
The fine placed for violation of the clean water act among other enviormental laws was $81.6 Million dollars. In 2010 a similar allegation was brought to light and Walmart agreed pay $27.6 million to settle. Walmart has direct impact on society’s health. Each additional Walmart added per 100,000 people increases the local obesity rate by 2.4%. (Business Insider, 2013). These facts, both good and bad, are a reflection of a combination of decisions and oversights from executives at Walmart. For any business to survive it is imperative to establish a social responsibility strategy that keeps Environment, People, Profit, and the law in mind.
Companies, regardless of size are expected to follow guidelines and laws when it comes to the environment. There are several entities that enforce a set standard of waste disposal and are in charge of controlling pollution. One way to control polution is through the application of fines.
The 1980 Comprehensive Environmental Response Compensation and Liability Act (CERCLA/Superfund Act) fines companies for both the pollution and for restoration costs. These fines can still be imposed even if at the time the method of disposal was legal. There are strict laws and legislation in place that can impose large fines if a company pollutes. Companies that pollute can also loose value in the stock market, can suffer from boycotts, and lawsuits. These seperately or together can topple of company which illustrates the importance of trying to run an environmentally “clean” and “green” business. This helps save money and keeps you looking good.
The United States Environmental Protection Agency (EPA) is tasked to protect human health and the environment. The EPAs definition of corporate social liability is “an obligation to make a futuer expenditure due to past or ongoing manufacturing or other ocmmercial activity, which adversely affects any aspect of the environment, the economy, or society (Heal, 2008).
The EPA annually releases a report named the Toxics Release Inventory (TRI) which details the levels of pollution released by companies. The companies high up on the TRI loose value in their stock almost immediately after the list is released each fall. This proves that pollution hurts the company (Weber & Lawrence, 2011). Ecological Sustainable Organization
The purpose of of making the organization ecologically sustainable is to implement strategies that can combine long term profits and the protection of the ecosystem. This is intelligent because the sources of waste can be reduced and or sold off to other companies. The reasons for doing this is the company can conserve energy, conserve resources, reduce pollution, reduce waste, and generate revenue. Environmentally CSR Strategies
Walmart or would benefit from the introduction of green solutions, by reducing overhead costs related to travel and commute, cutting communication costs with out reducing value, by being ahead of laws and regulations and by taking advantage of technology to increase revenue, drive up productivity, while driving waste and pollution down.
Introduce teleconfrencing to executives. Teleconfrencing is the act of carrying out meetings/ confrences with several other individuals in different locations via telecommunication equipment (Heimbuch, 2010). A business with $1 billion or more in annual revenue implementing four teleconference rooms could: Achieve a financial return on investment in as little as 15 months; Save nearly 900 business trips in the first year of using teleconference; and Reduce emissions by 2,271 metric tons over five years–the greenhouse gas equivalent of removing 434 passenger vehicles from the road for one year (Heimbuch, 2010).
Walrmart averaging over $400 million in revenue annually would have 400 times the impact environmentally if this model was followed. 908,400 metric tons of emmissions over five years would be removed which would be the equivalent of removing approximately 73,600 cars from the road. An impact this great would make news headlines and label Walmart as a true environmental ally.
Reducing communications costs such as costs related to email usage and telephone usage are an important part of lean principles. Many of these services can be unified and run over to Voice Over Internet Protocol or VOIP. VOIP allows for phone service,email, and chat services to run cheap or free on the company’s own internal internet. Take advantage of technology to reduce waste/costs, drive up productivity, and increase revenue. Hire an IT consultant which can determine which solutions can fix problems while keeping Walmart green. For example, replace older equipment with newer more energy efficient. This will bring products into Walmart that costs less to run annually and have a lower impact on the environment.
This better cooling systems for the server would allow the system to run smoother and reduce the cooling bill for the overall building. Keeping our computers up to speed and cooled will allow for faster performance and that leads to faster responses to your customers needs. The It consultant can also ensure that all the devices are being run in an energy efficient mode which will save electrical bills. These all add up to unnessary costs that can be fixed with some modern technological intervention.
Another method of getting green with the use of technology is by using reclyclable printer cartridges. By using recyclable ink catridges walmart reduces better cooling systems for the server. It takes approximatley 1,000 years for an ink cartridge to decompose . It takes around three pounds of raw material to create a new ink cartridge. Some of the raw material used to produce an ink cartridge includes about 3.5 ounces of oil. By recycling ink cartridges and purchasing recycled cartridges Walmart saves money and saves the landfill from having walmart’s ink cartridges thrown away there.
Recycling the cartrides is very easily done because many of the ink cartridge companies have their own recycling program and will take the cartridges back for free with included postage. Ethcial Leadership Considerations and Recommendations
When ethical leadership is considered what comes to mind is “How was this profit made? Was this profit made at the expense of: exploitation, curruption, armed conflict, child-labor or any other events that socially impact the well being of others. Popular opinion can drive profits to the sky or towards the ground, it is important that ethical decisions are made in order to preserve the brand name and profits while keeping people happy. Policies and procedures must be implented to foster ethical behavior. There must be reporting mechanisms that encourage people who see violations to report it. There must be Audits of all business areas to ensure compliance is met through out.
By setting a Corporate Culture that rewards and fosters ethical behavior, the company can decrease its chances of inpropriatey. Education in both the company’s ethical values and the employees training should let him or her know that Walmart is out to do good and wants to do good. This fosters ethical behavior and practices. Accounting Ethics When considering business and sustainability one must also consider the concept of triple bottom line accounting.
Triple Bottom line Accounting is an accounting concept that contains three measurable performance elements social, environmental, and financial. This model is often referred to as the “Three Ps” or “People, Planet, Profits” (Slaper & Hall, 2010). There are different ways to measure these elements because there is no universal standard. Considerations for the environment could be solid waste management, fossil fuel consumption, or change in land use or cover.
The cost of destroying, creating or maintaining the local eco system in which the business operates has an impact monetarily for the company and has an impact on the company’s public opinion. Measurements as far as people are concerned could be measurements that evaluates people’s health and well being. These could include unemployment rate, median household income, relative poverty, Average commute time, Average of hours training employees, charitable contributions and Career retention. The measurement of “people” in accounting reflects the quality of the workforce internally, sustainability of the workforce in comparison to other companies, and even the happiness of employees or customers.
This can impact sales in many ways. For example, undertrained or unhappy employees will perform poorly leaving poor customer satisfaction which drives customers away. Poor performance or lack of employee satisfaction with work can in turn lead to unethical decisions being made in the work place, such as inproperly removing waste or stealing. All in all all three dimensions of Triple Bottom Line Accounting can impact both company performance and the outside perception of the company. Underpaying employees or treating them poorly can lead to unethical decisions being taken on their part. It is imperative to take these three dimensions into account and frequently audit and improve upon the system. To ensure that the financial documents and records are proper it is the law, that the records must be audited.
Auditing frequently and preferably by third party is the best way to make sure there is not a misrepresentation of number going or that unethical behavior is not present in the accounting department. All certified public accountants (CPAs) must adhere to the American Institute of Certified Public Accountants (AICPA) in order to maintain ethical standards of practice. Having an ethicist on staff auditing the work and implementing quarterly ethics training can bolster the integritiy of the Company (Code of Professional Conduct, 2013). Marketing Ethics
Walmart is known for low prices. In fact, that is one of the main points the company tries to make in all its advertising. Focusing soley on low cost has led to several tragedies and mishaps such as E. Coli in meat, dog toys that contain melamine, childrens toys that are coated with lead paint and even cribs that have harmed or killed infants.
The constant push for low price from Walmart has pushed some suppliers to take shortcuts in order to meet demands or be dropped. This push for low prices also forces Walmart to look for suppliers overseas where labor is cheaper and environmental, saftey, and ethical standards are different. This Advertising or distributing products that are lies or that are physically harmful is unethical practice. Walmart should have policies placed specifically to deter these types of practices that can ruin the brand name and cause harm.
Effective ways to end immoral Marketing practices could be to have better testing for products and have this testing done in independent laboratories. These Laboratories should publish results publicly. As a major importer Walmart should require certification of such independent testing from its vendors before placing the product on the shelf. Another method that should be applied to increase Walmarts Marketing Ethics is by having Walmart aggressively disseminate recall information on all goods. This shows the public that Walmart is being proactive in informing the public and cares about selling quality and safe products. Information Technology Ethics
With the growing use of networked computers comes a set of problems that can potentially bring catastrophic damage. Stealing of personal data, sharing of personal information, and allowing personnel to have unrestricted access to computer systems are all examples of unethical information technology practices. (Maner, 1996). An ethically sound company will have policies that will not allow the use of information of any customer for anything other than what it was intended for.
In current times, fraud and identity theft are occuring far too often. It is imperitive to both let the customers know that the information is safe with Walmart, but also train employees on the responsbilities, importance and consequence of inappropriately using any technology. This can prevent what happened with Jason Smathers, who sold over 90 million emails to spammers.
A company’s value and culture is tends to trickle down to employees. It is important to establish ethical training programs and foster ethical behavior from the top down. Unethical behavior may not always be illegal but it can cause serious damage to a business. Legal and Regulatory considerations & recommendation
Stay Ahead of Laws & Regulation so that the company will always be upfront in the battle to stay green and clean. This means if there are impending laws that will force all companies to adhere to a standard, for environmental or health reasons. It is the duty of Walmart to learn and adopt these polcies as ahead of time as possible. It makes Walmart look good in the sense that Walmart will be always ready to lead in what is right.
Since Walmart is the largest employer in the United States, it needs to consider several laws that govern business. Fair Labor Standards Act, Consumer Credit Protection Act, Migrant and Seasonal Agricultural Worker Protection Act, Occupational Safety and Health Act, and the list goes on. The Fair Labor Standards Act establishes standards for minimum wages, overtime pay, recordkeeping, and child labor. This is significant because it determines what the minimum wage is and what is the minimum age a person needs to work. How much must be paid for overtime. These Laws set what are the mimimum acceptable standards. Key word is mimimum.
Rewarding employees with above minimum wage pay and working conditions will create happiness. Happiness will create productivity and longevity and those two bring home the profits. Walmart is currently in litigation for these very things. A reconsideration of some store policies should be made to make a happier workforce, a happier public, and a better stance in the socially responsibility arena. Walmart has long been known for paying its employees minimum wage. A survey conducted by the Oregon Police showed that panhandlers outside of Walmart in the Coos Bay area make more money in a day than what many walmart employees make in a full week (Komonews.com, 2008).
There have been several cross country strikes of Walmart employees asking for a living wage. Many of these protesters were met with threats, intimidation and loosing their jobs. According to the study done in the University of California Berkeley, if Walmart paid all its employees a living wage of $12 per hour and passed the costs down immediately to the shopper the average shopper would only end up paying an extra $0.46 per shopping trip or a little over $12 a year. This would be the extreme method of deflecting the cost associated with giving employees raises because walmart could absorb these costs by increasing productivity or lowering profit margins.
Bottom line: It is more than feasable, it is ethically right, but it is not happening. Walmart should at least consider this measure to help employees gain a wage that they can live on. (Jacobs, Squire, & Luce, 2011) Walmart’s produce is shipped by farms. Sometimes farms employee migrant workers. It is important for Walmart to familiarize itself with the Migrant and Seasonal Agricultural Worker Protection Act because it pertains to migrant workers and their agricultural employers. Walmart must ensure that it is not doing business with farms that are breaking the law.
This could lead to public lash back, lawsuits and loss. This can also damage the brand name. For this reason familiarization with the Migrant and Seasonal Agricultural Worker Protection Act to make sure that business partners are not violating the law, which could lead to consequences. The Occupational Saftey and Health Act of 1970 (OSHA) and has two regulatory functions: setting standards and conductiong inspectinos to ensure that employers are providing safe and healthful workplaces(Department of Labor, 2009).
It is the responsibility of Walmart to take care of its employees physically while at the work place. As such Walmart must provide the necessary saftey equipment and proper training to ensure employee saftey. It is also important that these regulations are enforced. The punitive measures in place for not doing so involve hefty fines for Walmart to pay. More importantly, it should be done because it is the ethically correct thing to do. Protecting your employees, protects your largest investment and what keeps the company running. (Department of Labor, 2009) Organizational Viability Considerations & Recommendations
As stated before, Walmart is a powerhouse with annual revenues exceeding $400 Billion. In order for Walmart to stay on top some fine tuning that will improve its green footprint and lower costs associated to waste. Walmart could also benefit from brilliant ideas that will reduce emissions and make it eco friendly. It should introduce a performance appraisal system. This would accurately measure what needs to be addressed and provides employees with direct feedback about their performance with encouragement.
This would then increase moral. This documentation would then provide substance in the case of raises or termination. A good performance review will highlight what is expected of the both the employee and the employer, the acceptable standard of performance, where the employee is rated with in the standards, performance and career goals, guidance as to how to correct deficiences or guidance on how to get to the next step in the career ladder.
This clear communications empowers employees to take control of their career and let them know that you are aware of their concerns and anything else important. It also may identify key skill which may be needed else where in the company. Walmart needs to develop and maintain a sucession plan. A succession plan assess the organization and identifies important positions. This identification of important position also reveals a set of skills needed to perform the task or job. By identifying what is needed, Walmart can be better suited to fill that open spot.
Also by continously developing and implementing such a plan walmart can have a pool of qualified candidates available to fill necessary slots which helps conitnuity. Furthermore, Walmart can develop a traning or series of training that would facilitate its own employees learning needed skill sets. This would allow Walmart to promote from within and raise moral, but also reduce the costs associated with advertising open positions. A succession plan is vital to a business such as Walmart because it needs to meet the ever shifting man power demands of today.