EHM1 - Task 3 - Grade: Pass PDF

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1 EHM1 – Task 3

EHM1 – Task 3 8/29/2020 Western governor’s University

2 EHM1 – Task 3 Walmart was founded by the Walton family and the headquarters are located in Bentonville Arkansas. The current CEO of Walmart describes their culture as one that saves people money to live better, the foundation of the culture is a commitment to operating with integrity. Sam Walton was the founder of Walmart and instilled values that currently lead the organization in an ethical way. The beliefs that guide their leadership are as follows: Respect for the individual, service to our customers, striving for excellence and act with integrity. The vision of Global Ethics is to promote ownership of Walmart’s ethical culture to all stakeholders globally. A1. Corporate Social Responsibility The Global Statement of Ethics provided by Walmart is comprehensive in its coverage of corporate social responsibility. There are a vast number of people covered by the statement of ethics, which include all associates regardless of rank, all board members and all of the organizations subsidiaries. The statement of ethics also covers third parties, such as distributors, suppliers, contractors, etc. The code of ethics that Walmart employs is one that covers discrimination, sexual harassment, inappropriate conduct, wage and hour regulations and conflict of interest. The disciplinary action for violation of the code of ethics is listed as appropriate and could lead to termination depending on severity of infraction. A2. Legal Mandate Compliance The code of ethics covers the policies and local laws in regard to compliance. Since Walmart operates in many different countries, the local laws in each have to be reviewed and followed. It is encouraged that Global Ethics be contacted if the laws conflict with the code of

3 EHM1 – Task 3 ethics in any country to find resolution for said conflict. The Global Ethics is an anonymous reporting line that allows any member of the workforce to call for any concern. A2a. Implications of Noncompliance The ramifications for legal noncompliance can vary in severity, depending on the infraction. Distrust from the community is one that could prove detrimental to an organization as the community would choose to do business with a company with higher ethical and moral standards. If the infraction caused any damages, the company would be responsible for repairs and possibly paying for inconveniences to the customer. There is also a risk of losing contracts with suppliers, distributor, etc. that could cripple an organization. A2b. Legal or Ethical Safeguards One of the safeguards that Walmart has in place is their Speak Up for Good. There are multiple ways to report a concern and their investigation practice is quite robust. When any concern is brought to attention, they conduct a confidential investigation, most likely by a risk manager or a risk management team, to determine if any law, policy or ethics violation has occurred. These investigation are used to determine root causes so further procedures can be placed to prevent the event from reoccurring. Reportable criteria listed in the statement of ethics are as follows: Bribery, Officer Misconduct, Fraud or theft Greater than $100,000, incorrect records and accounts, Information System Hacking and Global Brand Reputation Risks. Another safeguard Walmart employs is the Global Ethics Helpline, in which any person falling under the umbrella of the organization can call to report a concern. This resource is available worldwide twenty-four hours a day, seven days a week. This helpline is also available in

4 EHM1 – Task 3 a variety of languages so the team members that are operating in other counties have the same benefit of use. A3. Development of an Ethical Culture Sam Walton instilled the values and practice within the organization as the founder. Today, associates are still encouraged to challenge themselves in a way that every decision is thought through to validate that it matches the beliefs and core values of the company. The code of ethics provides anonymity for those wishing to raise concerns without fear of retaliation. A4. Raising an Ethical Concern Within the Global Statement of Ethics, there are clear guidelines on how to report concerns, it is simply to follow the chain of command. If the one needing to report is the violator, he/she can self-report and that could lighten the disciplinary action if the infraction isn’t too severe. If there is a concern, speak to the person(s) directly involved. If the concern persists, there is an open-door communication process, report to the manager. If there is no resolution after speaking with the direct manager, call the Global Ethics Helpline for anonymous reporting and that will initiate an investigation. A4a. Preferred Resources The most likely used resource would be the anonymous Global Ethics Helpline. Regardless of the Non-Retaliation Statement, most team members would feel uncomfortable reporting, even to a direct manager. Suppose it was the manager that was the guilty party, that would not be the person to report the concern. Reporting with the helpline would be the best option just for the anonymity.

5 EHM1 – Task 3 B1. Whistle-Blowing Factors Personal considerations that should be taken into account before reporting are the impact it could have on ones family. What is the motivation for reporting? Personal gain, revenge, will it benefit the greater good of the organization, the employees and/or the customers? Is the conviction to report strong enough to report or let it go? Does it warrant disciplinary action? Organizational factors one might think about are the support from your leadership team. What is the impact on the stakeholders? Review the pros and cons of reporting the concern. Are there alternatives to reporting that could correct the issue and educate the violator? Was it a malicious act that was intentional with anticipated damage to the organization? These are all questions ones should ask themselves before reporting a concern. B2. Whistle-Blowing Process Internally the team member should follow the chain of command, unless one of those members is the person committing the infraction. Report directly to your immediate supervisor. If there is no action, report to the manager. Still no action taken, report to the executive leadership team. Finally, if there is no response from the executives, the board members would need to be notified of the concern. Externally, depending on the infraction, the local police department may be the first choice of reporting. The district attorney/local court system is an option as well. Acquiring a personal attorney should probably be the first choice when looking to report outside of the organization. Make certain there is evidence, preferably physical evidence to back up the claim, and get the investigation started into the concern. Again, depending on the infraction it could

6 EHM1 – Task 3 be local jurisdiction that takes the case or could go to the government level for more severe accusations. For reporting purposes, the whistle-blower should keep accurate accounts of witnessed activity. C. Advantages and Disadvantages of Paying Whistle-Blowers Whistle-blowers face a long journey when deciding to report a concern to an outside agency. There are a multitude of factors to consider: loss of job, tarnished reputation even death threats. One must carefully consider all possibilities of the outcome and potential negative outcomes from the initial reporting. The Dodd-Frank Act provides reparation for whistle-blowers. For those who can provide original information to the government in regard to fraud or other illegal activity, they stand to take 10-30% of the recovered funds for their assistance in retrieving what was taken illegally. If the company is a government contractor or the government has been defrauded, the FalseClaims Act awards 15-30% of recovered funds. There are disadvantages to whistle-blowing. The first disadvantage is that it can take years for an investigation to come to a conclusion and reparations to be paid. There is also the reporting of false claims that could leave an organization with a damaged reputation that is irreparable. If there is not enough legal action taking place to expedite the investigation, there could be a delay or complete halt to the claim and the whistle-blower would receive nothing and out of a job. There are many factors to consider when contemplating whistle-blowing. D. Impact of U.S. Sentencing Guidelines The U.S. Sentencing Guidelines have changed the way organization behave and conduct business by imposing different rulings for unethical or illegal acts. These could include fines,

7 EHM1 – Task 3 probation, restitution, etc. These changes in the guidelines have prompted organizations to develop robust code of conduct/ethics programs, which educate the workforce on how to conduct themselves while in the workplace, also how to report any concerns that may place the organization in danger. D1. Culpability Factors There are different factors that are used when scoring an organizations involvement with illegal or unethical act. The first being the size of the organization and to what degree they were involved. Another would be prior history of committing the same acts or behavior in a previous complaint. The third would be obstructing the investigation/prosecution. There are also mitigating factors that play a role, such as having a robust compliance program or self-reporting when the act was unintentional. Many organizations have members of their workforce designated to these specific task to prevent these occurrences from getting to the level of having a whistle-blower. Compliance program officers, risk managers or a company disciplinary panel that performs initial investigation to decide if the concern needs to be escalated and self-report to the appropriate agency.

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References Ethical Statement. (2020). Retrieved August 29, 2020, from https://www.walmartethics.com/content/dam/walmartethics/documents/statement_of_ethics /Walmart_Statement_of_Ethics_English.pdf...