Ethics - Case of Walmart

Ethics Case of WalMart

Jingwen Jiao

MBA 535 Managerial Accounting

May, 8, 2016

Mark Hoover

City University of Seattle

Abstract

This paper will mainly discuss the business ethics, because the managerial accounting is heavily related to business ethics. The company’s manager and leader always meet a circumstance what they need to make a decision or judgment to do the “right ” things. This case study will analyze the Wal-Mart ethics case what the corporation treats their employees in an inappropriate and unethical method. And this paper will also provide a solution and some recommendations about how to operate a business more ethically.

Introduction

Business ethics is the moral principles which guide the direction and method of  business behaviors. The business ethics is always guided by law, and on the other hand, companies will also provide a basic social security to enhance public receiving and support. At the same time, the ethics principles both identify personal actions and business behaviors.  

The most significant part of ethics business is that people need to learn how to distinguish the “right” and “wrong” of the business behaviors and then making the “right” choice. Sometimes that is hard to explain what is ethical business behaviors, but relatively, It is easier to identify the unethical business practices. For instance, the companies should not hire or use child labors. They should not use copyrighted materials or intellectual property without authorization. They should not engage in bribery (Gavai, 2009).

In addition, the companies also have broad corporate social responsibilities. They should minimize the damage to the environment when the corporation operates its business. Nevertheless, there is no clear moral compass to guide leaders through complex dilemmas about what is right or wrong, but at least, they must abide by the law.

Brief Introduction of Wal-Mart

Wal-Mart Stores, Inc is an American biggest public corporation, and it is the largest grocery retail company throughout the world. The Wal-Mart corporation was established by Sam Walton in 1962, and it was incorporated in 1969. Wal-Mart operates its business of the retail stores in various countries. Wal-Mart uses a low-price strategy to operate its business. They provide the low prices of diverse products to increase their market competitiveness (Walmart, 2012).

Wal-Mart Unethical Case Background

        The Wal-Mart corporation has the biggest revenue of grocery retail industry in worldwide. However, the company has a controversy of an ethical issue,  because the Wal-Mart corporation presents an unethical and inapplicable business policy of their employees.

The most famous and influence incident is the Deborah Shank’s brain damaged case. Deborah Shank was a Wal-Mart employee, who suffered a miserable collision with a truck in many years ago, and after that accident, she got a permanent brain damage. Since she already involved in the Wal-Mart health-care plan, she got her initial medical payment from Wal-Mart. Nevertheless, Wal-Mart wanted to withdraw the expenses, because Shank family won 1 million dollars from the trucking company in a lawsuit. Finally, the Shank family received $417,000. Wal-Mart sued the Shank family was sued by Wal-Mart, and the company requested the couple to pay back $470,000 for her medical care cost. The U.S. Supreme Court judged Shanks needs to return about $275,000 to Wal-Mart. And then, CNN reported the Shank family’s story. A large number of citizens were indignant about the Wal-Mart inappropriate behavior and tried to boycott the company. The company can't afford the pressure from the Shank’s supports. They announced that Wal-Mart would modify their health-care plan, and they will not seek the refund anymore (WalMart, 2005).