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Ethics Choices and Communication Challenges In 2012, Walmart…
Ethics Choices and Communication Challenges
In 2012, Walmart faced an investigation into business practices in Mexico that were thought to violate the U.S. Foreign Corruption Practices Act (FCPA). The FCPA makes it unlawful to “make payments to foreign government officials to assist in obtaining or retaining business” (An overview). The investigation suggested that Walmart made “suspect payments totaling more than $24 million” to expedite the opening of stores in Mexico (Barstow, 2012, p. A1). To make matters worse, it was revealed in the investigation that company executives were aware of questionable practices by employees as early as 2005 and were not diligent with their internal investigations. In the years since the investigation there have been at least eight senior-level executives who have left the company and Walmart has added more than 2,000 employees who focus on corporate compliance (Harris, 2014).
Similar types of bribery allegations have been associated with the cosmetics firm, Avon (Henning, 2014), and the industrial company, Alstom, which was recently acquired by General Electric (Ivory, 2014). It is reported that Avon spent $300 million on internal investigations and establishing monitoring systems (Henning, 2014). Similarly, Walmart is reported to have spent $439 million on the investigation and new compliance structures (Harris, 2014), with an additional $200 million estimated for the coming year (Berfield, 2014). The reported expenditures do not include costs associated with lower employee morale and customers’ negative perceptions of the company. In addition to fines and penalties against a company, individual employees can be at risk for criminal charges.
While not specifically linked to the bribery scandal, the American Customer Service Index, an organization that conducts an annual survey of customer satisfaction in the United States, reports that Walmart’s customer satisfaction score consistently ranks in the top 10 worst retailers and the score for 2014 was their lowest since 2007 (Retail satisfaction drops). Since the investigation into Walmart’s actions in Mexico, investors have even begun to question their affiliation with Walmart. The New York Times reported the City of Portland, Oregon, decided in October of 2014 that it would no longer invest in Walmart because of “concerns over the company’s ethics and labor practices” (Harris, 2014, p. B5).
John Gress/Corbis
And yet, Walmart has worked hard over the years to build its core values, develop its communication structure, keep its focus on saving customers money, and perpetuate good intercultural and international relations. Walmart employs 1.3 million people in the United States and has approximately 11,500 retail locations spread across 28 countries (About Us, 2016). The current President and CEO, Doug McMillon, started with the company in 1984 as an hourly summer employee and has worked his way up through the organizational structure (About Doug McMillon, 2016). In the United States, Walmart was a leader in increasing wages in 2015 for their 500,000 hourly employees (DiChristopher, 2015). Critics, however, show how an increased hourly wage can become meaningless for individual employees when they are assigned fewer hours in the work week (Tabuchi, 2015). Further, some suggest the wage increase is in response to very low employee morale and an active employee group that has staged protests over the past several years (Lathrop, 2015).
The bribery allegations and investigation create a continuing communication challenge for Walmart. Two years after the initial New York Times report, the company is still being associated with bribery. Reuters recently reported on a change in leadership for the Mexico division of Walmart. The bribery claim, although not cited as the reason for the change in leadership, was mentioned in the news report (Gardner & Gomez, 2014). The New York Times reported the change in leadership “follows a string of high-level departures at Walmart after allegations of widespread bribery at its Mexican unit … [which] prompted a flurry of investor lawsuits and a United States government investigation” (Tabuchi, 2014, p. B2).
Walmartone of the largest employers in the United Stateshas experienced ethics choices and communication challenges both inside and outside the company. As they, and any organization in today’s multi-national business environment, will tell you, developing skills at communicating with all types of people in all types of positions using constantly changing technologies requires awareness and practice.
To see where your skills stand and what enhancement is needed to ensure your employability, look for the Polishing Your Career Skills features in each chapter in this unit and throughout the book. By the time this course is completed, you may be the very person that Walmart is looking to hire to help with their ethics choices and communication challenges.
2. Reflect and Respond
As you read the three chapters in Unit I and exploring their topics and learning objectives, refer back to the Real-Life Case and see how you might answer these questions:
Be sure to use vocabulary from the chapters in your responses.
Chapter 1
How do companies like Walmart use one-way, circular, and/or transaction communication? What specific advice would you give Walmart executives to improve their communication with employees, customers, and/or the general public? Answer in 100-150 words
Chapter 2
2. Which of the five types of organizations best describes Walmart? How do you know? Support your answer by explaining at least three ways that you feel sure your answer is correct. Answer in 100-150 words
Chapter 3
3. Which of the five conflict styles do you think Walmart is most likely to use in its dealings with American manufacturing companies? How would conflict styles change if the company were from a collectivistic culture? Answer in 100-150 words
4. Give some suggestions for how Walmart (being from an individualistic, low-context, monochronic culture) should approach companies from a collectivistic, high-context, polychronic culture such as Mexico without compromising its ethical standards. Answer in 100-150 words
