CASE 3
Walmart Manages Ethics and Compliance
Challenges
CASE NOTES FOR INSTRUCTORS
This case examines Walmart and its approach to ethics from its origins to the present time period.
Students will see the difficulties Walmart faced as it became the largest retailer in the world. The case
serves as a thought-provoking exercise on the importance of establishing a strong ethics program in a
company.
The company has also encountered leadership issues including the 2005 incident of board vice chair
Thomas Coughlin’s forced resignation for stealing as much as $500,000 from Walmart, and the more
recent bribery scandal in Mexico possibly implicating former CEOs Mike Duke’s and Lee Scott’s
knowledge of the misconduct. In addition, safety has also become an issue for Walmart after a fire in an
unsafe Bangladesh factory killed many workers. Walmart is devising a new safety plan for factories in
Bangladesh and is revising its auditing policies.
Despite these criticisms, there are several activities the company is involved in that have a positive
impact. For example, it has become a leader in installing renewable energy sources in many of its stores
all over the world including solar, wind, biodiesel, and fuel cell installations; it works with The
Sustainability Consortium to develop a sustainability index to measure the sustainability of its products
The case closes with a discussion of the actions Walmart is taking to improve its relations with
stakeholders, such as tighter corporate governance policies and philanthropy. A look into the company’s
present and possible future creates the opportunity for students to engage in a fruitful discussion of the
role of ethics and compliance in a large company.
QUESTIONS AND DISCUSSION
1. Assess how Walmart is managing ethics and social responsibility as one of the largest corporations in
the world.
Student’s answers will vary and should be supported by reasoning. Some might view Walmart as a
socially irresponsible company that is only pretending to engage in socially responsible activities to
improve its image. Other students will likely acknowledge that Walmart has made many mistakes, but
2. Evaluate various ethical issues Walmart has faced and how the company responded to stakeholders.
The company’s size is a major factor in its ethical issues because the consequences of its actions
affect more people (e.g. putting smaller, local businesses out of commission; lowering of wages;
exerting too much power over suppliers; and offshoring). Other ethical issues include employee
treatment such as healthcare and cutting work hours; alleged union busting; leadership issues
including embezzlement; bribery in different countries to secure contracts; and safety issues.
3. What are Walmart’s contributions to improving the well-being of consumers and the economic
sustainability of society?
Walmart employs millions of people worldwide, and its EDLP pricing strategy allows consumers to
ADDITIONAL RESOURCES
