Walton Business Ethics: Business Ethics

¶ … Walton

Business Ethics:

Business ethics is the discipline of ethics which looks at ethical rules and principles in a business perspective, the different moral and ethical problems which can crop up in a business environment; and any specific responsibilities and requirements that apply to persons engaged in commercial activities. The people interested in business ethics evaluate different types of business activities and questions if the conduct is ethically right or wrong. Business ethics is a type of applied ethics, a discipline of philosophy. Therefore, it takes the ethical concepts and principles developed at a greater theoretical, philosophical stage, and apply them to particular business circumstances. (Business Ethics)

Speaking in general terms, business ethics is a normative discipline, wherein specific standards are assumed and thereafter applied. It causes specific judgments regarding what is right or wrong, which is to mention, it makes assertions regarding what should be done or what should not be performed. Whereas some exceptions are there, business ethicists are normally less worried with the foundations of ethics, or with justifying the most fundamental ethical principles, and have a greater concern with the practical problems and applications, and any particular responibilities which might apply to business relationships. (Business Ethics)

Ethics of Business and Sam Walton:

Walton emphasized on the value of ethical business by making customer relations the top priority of the company. Wal-Mart Rule No. 1 has been that the customer is always right. Wal-Mart Rule No. 2 has been in case the customer happens to be wrong, refer back to Rule No.1 which again reinforces that customer is out and out right in every occasion. Other portions of this ethical culture comprises employee participation in decision-making process, dependence on seat-of -- the pants judgments, open book policies on performance of the company, welcoming the suggestions offered by the staff of the company and application of these suggestions into practice, recurrent visits to the store by the high ranked officials of the company and performance-oriented recognition of employees. (Sam Walton- Wal-Mart Corporation)

The employees are rewarded which includes more than the normal pay and praise. A pilferage control program is in operation that shares the advantages of achievement with the participating employees. Also is a profit-sharing plan which is linked to corporate profit objectives and gives various investment opportunities meant for the employees including acquiring Wal-Mart shares. It is the practice at Wal-Mart to believe in people. The company forges a partnership through the years with its employees, which is its basic philosophy and cutting across rank and file of the workforce are informed regarding gross margins, rent payments and other operating expenses and they even have a share in profits of the store. (Sam Walton- Wal-Mart Corporation)

The critical success factor regarding Wal-Mart was that its founder Sam Walton believed that these stores would be located in smaller towns and he held that there is a presence of lot more business in these towns than most people ever contemplated. At the core of Walton's vision for Wal-Mart were his robust personal values of modesty, honesty, penny-pinching and faith. The personal values of Walton was translated into three major business principles: (i) providing customers with value and service in a neat and friendly shopping atmosphere (ii) building partnership with the associates and (iii) maintaining commitment to the society. The crucial and exceptional causes of success at Wal-Mart were the strengths and qualities of Sam Walton himself, his dominant vision and steadfast values, his guts to take action, and his uncanny capability to motivate and inspire his associates. (the Concepts of Vision and Mission Revisited: Case Histories Wal-Mart, Hewlet Packward, Matsu*****a Appliances and the Body Shop)

Walton was a judicious strategist. He looked for with painstaking care for each individual who constituted his management team. He looked for individuals who trusted on the discount concept and dedicated to working for extended hours to ensure that his vision become a reality. He had built up an enterprise which flourished on innovation and in a setting where people reposed faith in themselves. He adopted technology as a change agent for innovation and to remain competitive in the field. And the outcomes are self-explanatory. Wal-Mart has succeeded in satisfying not merely its customers, but its employees, suppliers, investors, and host communities. Wal-Mart outpaces the rest of the industry in terms of growth and devlopment, sales, profits, margins, and staff and floor productivity. (the Concepts of Vision and Mission Revisited: Case Histories Wal-Mart, Hewlet Packward, Matsu*****a Appliances and the Body Shop)

Stakeholder Theory:

Anybody who subjects something of value to risk like capital, health, welfare, or happiness in interacting with a company can be stated to have a stake in it. From the context of business, a stakeholder can be considered to be a person or a group who has the capability to help or hurt the company. Stakeholders who exert influence to materially influence business performance might be favorably or unfavorably are crucial to the future of the company -these are the significant stakeholders. Economic stakeholders are involved directly in the value chain by adding upon the economic value to the company's end product or service. Societal stakeholders are external to the value chain, albeit they put considerable impact on a company's value addition. The influence of economic stakeholders is properly recorded in case of customers, employees, and suppliers; they are frequently vital strategic partners in case of companies more and more reliant on collaboration and networking to create and maintain competitive edge. (Expanding the Value Horizon: Stakeholders as Source of Competitive Advantage)

During the major part of the 20th century, destruction of value in case of stakeholders was regarded to be external to the enterprise. Companies had the upper hand to produce damaging impact to the society as these were regarded to be outside the purview of business or due to the fact that the perceived costs outweigh the costs. With the advent of modernization of information and communications technology, the gestation period for identifying and internalizing negative stakeholder influence has been shortened. The influence on a stakeholder group in any part of the globe is communicated immediately throughout the world having a direct bearing for its capability to conduct business. (Expanding the Value Horizon: Stakeholders as Source of Competitive Advantage)

Stakeholder Theory looks from the managerial point-of-view in terms that it reflects and gives direction regarding how managers operate rather than mainly dealing with management theorists and economists. The main focus of stakeholder theory is expressed in two central issues. In the first place, it questions about the purpose of the enterprise. It interrogates managers to be expressive in terms of the shared sense of the value they build, and what binds cohesively its core stakeholders together. This drives the enterprise forward and permits it to produce exemplary performance, determined as regards its objective and marketplace financial metrics. Secondly, stakeholder theory questions regarding the responsibilities of the management towards its stakeholders. This propels managers to express the manner in which they wish to perform their business- particularly what types of relationships they wish and require building with their stakeholders to deliver on their objectives. (Stakeholder Theory and the Corporate Objective Revisited)