Unethical Practices of Mike Duke Final

7/22/2019 Unethical Practices of Mike Duke Final

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Unethical Behaviour

Mike DukeCEO of Walmart

Team Members:Minell Nimasha

Nayomi Mafaz

Aqeel

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Overview of Presentation

Intro about Walmart CEOMike Duke

Unethical practices by Mike Duke

Character theory

Ethical behaviour and Organisational performance

Importance of being Ethical

Growing demand for ethical Businesses

What We Can Learn from Walmart's Extensive Bribery in

Mexico

Recommendations

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Intro about Walmart CEO Mike

Duke Mike Duke was born in 1949 (Tharpe, j , 2009)

He serves as the fourth chief executive officer of Walmart(Walmart, 2012)

From 2005 to February 2009, Mike served as vice chairman of

the company, with responsibility for Walmart International(Walmart, 2012)

Since joining Walmart in 1995, Mike has led the logistics,

distribution and administration divisions as well as Walmart

U.S (Walmart, 2012)

Under Mike's leadership, the company's international business

became a fast-growing part of WalMart's overall operations(Walmart, 2012) 3


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Unethical practices by Mike Duke

Bribing the officials - Bribing foreign officials to grow its business. Just on the basis ofknowing about illegal activity, not doing anything about it (and probably condoning andrecommending more,) and then trying to change U.S. law to diminish the legalrepercussions, Mr. Duke should have long ago been fired.

Health Care - Nationally, 64% of workers in companies of 5,000 employees ormore receive their health benefits from their employer. However, Wal-Marttypically covers only around 50% of its employees.

Low Wages - Wal-Mart typically pays its sales associates, cashiers, team leaders, andovernight stockers 26-37% less than the national average for the same jobs in the retailindustry. A study conducted by Dr. Richard Drogin in 2003 revealed then women earn

less than men and hold fewer managerial positions at Wal-Mart.

FLSA Violations - Wal-Mart, a frequent violator of wage and hour laws, now finds itselfdefending its labor practices in legal battles across the nation. Wal-Mart is currently facingmore than 80 lawsuits alleging that employees were forced to work off the clock and skip lunchand rest breaks while management manipulated time and wage records in order to keep laborcosts down.

(Walmart Corporate Watch, 2013)4


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Overcoming unethical practices

Ethical TheoriesBuilding

trustworthinessamong employees

Wal-Mart shouldencourage employees tofeel that the company is

conducting ethical businesspractices and acts for the

betterment of the businessand not for the purpose of

filling officials pockets.

Company hasauthorized millionsof dollars to officers

to speedup thebuilding permits andto gain other favors.

Be legallybinded, self-

monitored andaccountable

Shouldconsider aboutthe laws and

regulations ofgovernment

Wal-Mart offeredlarge payoffs to

get the things donewhich were law

prohibited.

(Shayon,S, 2012)

Make ethicsbased decisions

should be able to do theright thing by putting theleadership roles of Wal-Mart in forward but they

should be monitored.

Wal-Marts managementknew that they areestablishing a campaignof bribery to dominatethe market, but they

decided to keepcontinuing it rather thanstopping it. (Shayon,S,

2012)

Honesty inbusiness

This helps to

show thecompetition edgein the market.

Company has carried outthe bribery campaign toboost the companysgrowth in the market.

(Shayon, S, 2012)5


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Overcoming unethical practices

Social responsibilities

Consideration about thepolicies, training and

laws

Beyond the companyeconomic should

consider about the lawsand the external

environment.

Wal-Mart have violatedenvironmental laws and

violated air pollutionregulations.

Transparency in businesspractices

Consumers should be ableto know the fact that Wal-Mart business has nothing

to hide and allowsconsumers to view the

company practices clearlyand the rules and

regulations as well.

Though the management of thecompany knew about thecampaign of bribery, they

could not decide to expand aninternal investigation for the

consumers.

Higher performance withintegrity

Should lead with topand establish robust

system and change themanagement style

Wal-Mart managementhave ignored trainings, a

strong tone at the topand the policies.

(Benjamin, W, 2012) (Lister, J, n.d)6


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Character theory

Criteria Scores

Self Awareness and self control (slide 5) 6/10Empathy (Refer slide 5) 4/10Compassion (Refer slide 6) 6/10Courage (Refer slide 6) 5/10Generosity (Refer slide 6) 4/10

Honesty(Refer slide 5) 4/10

Fairness and justice (Refer slide 6) 4/10Sociability and interest in others (slide 5) 6/10

Note : Please refer the given slide no's and reference for justification on scores assigned.

*Our view only

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Ethical behaviour and

Organisational performance

The term ethicalbehavior refers to how an organization ensures that all its

decisions, actions, and stakeholder interactions conform to the organizations

moral and professional principles. These principles should support all applicable

laws and regulations and are the foundation for the organizations culture and

values. They distinguish rightfrom wrong.(Baldrige, 2004)

Ethical Business Practices of Walmart

100 million customers every week.

"Low prices, always"

Helping Hands

Helps in saving money.

Private label brands.

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Importance of being Ethical

Walmart Company and their employees are required to comply withnational, international, and local laws governing their operation. Failureto comply with these standards can be costly in terms of time, resources,brand image and employee and customer loyalty as Walmart is a worldrecognize large scale business.

Potential Avoidance

of Fines As Walmart develop or enhance their overseas operations, decentralize

their business functions, and empower their workforce, it is imperativefor them to develop ethics practices that provide the necessary trainingand tools to assure that their employees throughout the world can makeethical decisions.

DecreasedVulnerability

Several ethics awards and media lists on corporate reputation (e.g.,American Business Ethics Awards, and Business Ethics "100 Best

Corporate Citizens") consider a range of ethical criteria for determiningthe companies' rankings. So that Walmart can be nominated too.

Improved Brand

Image and Reputation A 1996 survey by Bozell Worldwide, The Wall Street Journal

International Edition, and Nihon Keizai Shimbun, titled "GlobalCorporate Good Citizenship: Improving Perceptions in the '90s," reports

that business ethics matter to consumers.

Customer Loyalty

(Inc,1999) 9


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Growing demand for ethical

Businesses

The growing demand for businesses to behave ethically is an

opportunity, not a threat, for companies and countries smart enough to

see it that way. One thing upon which we all agree is that consumers are

increasingly looking to do business with companies that are, in some way,ethically, environmentally and socially responsible. People are worried

about the fundamental challenges facing our planet and, increasingly, they

want the things they buy to reflect their concerns. (Davis, 2008)

Walmartscorporate culture has been built on a foundation of acting with

integrity and the highest ethical standards. The company has the same high

standards of integrity for every associateregardless of his or her position

and everyone is held accountable for those standards.

(Walmart News, 2012)

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Wh t W C L f


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What We Can Learn from

Walmart's Extensive Bribery in

Mexico The Independence of Investigators When it comes down to it, there is very little

difference between self-investigation and cover-up. If allegations are true, those charged

with investigating the allegations don't have to investigate them at all. They know what

happened. If the allegations are false, an investigation stating they are false won't be

believed by anybody in the public for this instance.

Jurisdiction over Applicants - Government officials certainly have the higher obligations,

but there is no reason to leave applicants out of an ethics program. Their participation can

make it far easier to bring ethics proceedings against them and, therefore, far more likely

that they will not tempt officials into ethical misconduct or give in to unethical officials

demanding money for action.

(Cityethics, 2012) 11

Wh t W C L f


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What We Can Learn from

Walmart's Extensive Bribery in

Mexico Confidential Information - It's worth noting that Walmart not only paid to speed up permits

and the like, but also to purchase confidential information. Confidential information

provisions are too often thought to be about confidentiality, when they are really about misuse

of office to benefit oneself and others.

Gifts to Governments - It is important to remember that money given to governments is not

always used to benefit its citizens. And even when it is, it still benefits high-level officials by

keeping down tax increases, which makes re-election much easier.

The Importance of Government Ethics - It would have not only meant less bribery inMexico, but in the long run would have been better for Walmart's reputation. It will now

deservedly be dragged through the mud, with the careers of many executives ended, and some

possibly going to the prison.

(Cityethics, 2012) 12


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Recommandations

1. Initially when the scandal was informed to Mr.Duke in year 2005 (The

Nation, 2013), Mr.Duke at that time holding the responsibility of

international operations, should have implemented a honest internal

investigation, instead of helping to take steps to scrub off the evidence ofbribery. If such step was implemented due to leaders honesty, the negative

effect upon Wal-Mart would have reduced up to a certain extent.

2. Implement strict internal controls within Wal-Mart, to ensure all

transactions follow & obey the necessary standard internal & externalrules, regulations & laws, which would contribute towards ethical

business

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Recommandations

3. Should take solid steps at the initial stage, to panelize employees who

involves in unethical business practices, Ex: Instead of promoting

Mr.Eduardo Castro as the vice chairman of Wal-Mart in year 2008, should

have taken steps to degrade, Mr.Eduardo Castro as Mr.Eduardo wasidentified as the driving force behind the scandals in year 2005 (The New

York Times, 2013), which would act as a demotivation for further

unethical business practices taking place in Wal-Mart.

4. Train all employees at every level, in order to ensure, employees areknowledgeable about the practices needs to be followed within Wal-Mart,

which would ensure an effective & efficient work environment, leading

towards positive feedback from all stake holders

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Referencing Baldrige Glossary (2004) Ethical Behavior [WWW] Retrieved from:

http://www.baldrige21.com/BALDRIGE_GLOSSARY/BN/Ethical_Behavior.html [Accessedon: 21/04/2013]

City Ethics (2012) WhatWe Can Learn from Walmart's Extensive Bribery in MexicoHome:

Blogs: Robert Wechslers blog [WWW] Retrieved from:

http://www.cityethics.org/content/what-we-can-learn-walmarts-extensive-bribery-mexico [

Accessed on: 20/04/2013]

Davis, Craig, (2008) Business ethics (Evaluation) [WWW] Retrieved from:

http://www.freepatentsonline.com/article/International-Trade-Forum/199121229.html [


Eidelson, J, (2013) Congressmen: E-mails Reveal Walmart CEO Was Repeatedly Informed of

Bribery Scandal in 2005 [Online Newspaper] Retrieved from:

http://www.thenation.com/blog/172127/congressmen-e-mails-reveal-walmart-ceo-was-repeatedly-informed-bribery-scandal-2005#[Accessed on: 17/04/2013]

Heineman, B, W , (2012) Wal-Mart Bribery Case Raises Fundamental Governance Issues

[WWW] Retrieved from: http://blogs.law.harvard.edu/corpgov/2012/04/28/wal-mart-bribery-

case-raises-fundamental-governance-issues/[ Accessed on: 20/04/2013]

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Referencing

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After Top-Level Struggle WAL-MART ABROAD: How a retail giant fueled growth with

bribes [Online Newspaper] Retrieved from: http://www.nytimes.com/2012/04/22/business/at-

wal-mart-in-mexico-a-bribe-inquiry-silenced.html?pagewanted=all&_r=0 [Accessed on:17/04/2013]

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Story:Leadership:Executive Management [WWW] Retrieved from:

http://corporate.walmart.com/our-story/leadership/executive-management/mike-duke [


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Walmart Global Compliance Action Steps [WWW] Retrieved from:

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Thank you

Mansethical behavior should be based effectually on sympathy, education

and social ties and needs; no religious basis is necessary. Man would

indeed be in a poor way if he had to be restrained by fear of

punishment and hope of reward after death

Albert Einstein

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