Business ethics assignment 2 1. a) A stakeholder of a corporation is an individual or a group which either: is harmed by, or benefits from, corporation; or whose rights can be violated, or have to be respected, by the corporation. According to this statement the four main stakeholder groups in the video related to Wal-Mart are: 1. Competitors - Competitors are influenced negatively, by Wal-Mart’s operations. Many small retailers are forced to close down their business, even though there business are 40-50 years old, and they have good name at the market.
Wal-Mart policy of “everyday low price” is pushing local stores to the edge of bankruptcy. In order to be competitive to Wal-Mart, smaller retailers have to cut down their costs, such as wages of their staff. Each year Wal-Mart drives down retail wages with $3 bln. The ability of Wal-Mart to sustain the low prices and wages creates a monopoly and unfair competition. 2. Employees – According to the Freeman’s stakeholder theory, a company should not focus only on shareholders interests, but also on the interest of whole range of groups, or stakeholders, part of which are the employees.
Wal-Mart is in conflict with that theory, since they do not mind the opinion of their employees. The employees are closely related to Wal-Mart while they are working there and they receive the salaries from the shop. Since employees have contracts with the company their interests are protected and closely related to the companies operations. The employees are influenced negatively because they receive very low wages. Instead of paying for its employees to have health benefits, Wal-Mart is making the government to take care after them. The store offers an expensive medical-care health package, which employees cannot afford.
What is more is that the job tasks for first floor staff are enormous, compared with the salaries they receive. Furthermore sometimes the additional working hours of the workers are not written properly, so they do not receive the money they worked for. Racial and sex discrimination. 3. Government – The government substantial subsidies reinforce Wal-Mart’s business and policy. Although local schools and fire-fighter services, need money to renovate their building, and to continue working properly, subsides are received by Wal-Mart. Wal-Mart’s national-wide subsides account for $1,008 bln.
Another issue is that the government is trying to enforce the laws for Wal-Mart, but the corporation is not taking this seriously. Examples are: the pollution of waters through fertilizers and chemicals stored at the parking lot, and the beg from the government to Wal-Mart to put cameras on their parking lots in order to provide security for their customers. 4. Civil society – Civil society is influenced indirectly, negatively by Wal-Mart. Since the corporation is not providing medical care about its employees the government is paying $1,557 mln from the citizen’s taxes.
While spending so many hours at Wal-Mart, employees do not have time for their personal life and their families. What is more is that there are 26 699 678 square feet of empty Wal-Mart’s, this space could be large enough to build 29 666 classrooms and educate 593 326 children, from which the civil society can benefit a lot. b) The employees are the most important stakeholders in that video case, since they are most influenced (negatively) from the corporations policy. They are receiving lower wages, from what they deserve. Their health care is extremely expensive for what they can afford.
What is more is that their personal life is disturbed from spying from the upper-levels of the company. The company policy is in conflict with the Freeman’s stakeholder theory, which makes it unethical. What is more is that racial abuse can be seen in the Wal-Mart, which is in conflict with the social and civil rights according to the corporation citizenship theory. The social rights are abused since there is no freedom to participate in healthcare, and the civil rights is broken since there are people who are abused by third parties. 2.
THINK !!! 3. THINK !!! 4. a) Carroll’s four-part model of Corporate Social Responsibility (CSR) consists of economic, legal, ethical and philanthropic levels. Wal-Mart tries to incorporate all of these levels in their policy, and make it publicly available through advertisements. - The first is the economic responsibility. It is focused on the responsibility of the business, to be a properly functioning economic unit and to stay in business. This level is required of all corporations. Wal-Mart tries to achieve this through … THINK !!! The second level of Carroll’s four-part model of CSR is the legal responsibilities. This level suggests that business have to “play by the rules of the game”. According to this level, companies have to follow laws that are codification of society’s moral views. This level is required of all corporations. Wal-Mart is trying to achieve this through … THINK !!! - The third level of Carroll’s CSR pyramid is the ethical responsibility. These responsibilities oblige corporations to do what is right, just and fair even when they are not compelled to do so by the legal framework.
This level is expected by the society. Wal-Mart try to achieve it through … THINK !!! - The forth level of the CSR pyramid is the philanthropic responsibility. This is the top of the pyramid. It suggests that, companies have to improve the quality of life of employees, local communities and society in general, by their desire. This level is desired by society. Wal-Mart tries to implement this level of the pyramid by advertisements, which shows charities. One of the advertisements says that, the store gives $5 each second, to the welfare of the communities in need. ) The documentary shows the reality through the critic’s eyes. In their opinion the corporation policy is not meeting the Carroll’s entire four-stage CSR pyramid, and does not reflect the promises in the company advertisements (point a)). - The first level of the pyramid is the economic responsibility. The critics of the documentary think the corporation does not meet this level, because the jobs are not paid fairly, and the company does not meet the employee’s demands for better quality work environment. …. - The second level of the pyramid is the legal responsibilities.
The critics in the video think that the corporation does not meet this level of Carroll’s pyramid, because when the employees want to make an union, the company acted illegally and unfairly to keep the union out. There were anti-union camera packages, undercover spy vans, 24 hours anti-union hotline, and rapid response team with corporate jet. …. - The third level of the pyramid is the ethical responsibilities. The critics said that there were racial and sex harassment; managers manipulated the workload time schedules of the employees. Even more, the critics in the video entioned a case when Wal-Mart polluted the local waters through storing fertilizers at the parking lot in the local store. Last but not least, Wal-Mart is not providing proper priced health-care for its employees. - The top level of the pyramid is the philanthropic responsibility. The critics in the movie mentioned said that Wal-Mart is not donating money for the people in need. According to the video Wal-Mart is donating 1% ($ 5000) per year, compared to its employees, they donate approximately ($ 5 mln) per year. Bill Gates, a single person, donates 58% of his wealth, which is way more than huge corporation such as Wal-Mart.