CSR, Business Ethics & Sustainability

Business Ethics, Sustainability & CSR
Business Ethics, Sustainability & CSR

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Business Ethics, Sustainability & CSR


Intense competition has forced most companies to change their operations tremendously. Specifically, the retailer supplier relationships have been forced to change in the face of system level competition (Carne & Matten, 2010). The emergence of new forms of retailing such as the internet retailers has even put more pressure on the traditional retailers. In spite of the pressure. the expectations are still high from the stakeholders who expects the retailers to provide excellence services to their customers.

The customers are increasingly becoming concerned of what their retailers sell, in addition to the prices that they sell them. Of the concern to some people is that some merchandise sold by the retailers comes from sweatshops (Smestad, 2010). Many activists are concerned with the social contract that exists between such organizations and the society. Such groups argue that retailers must assume the greater responsibility for human welfare throughout their supply chain. At one time, it emerged that some cloth line being sold at Wal-Mart stores have come from intolerable working conditions in Honduras. This paper uses ethical theory and analyzes an ethical issue in Wal-Mart.

The Unites States have created a keen interest to monitor the supply chains with the sole aim of protecting the human rights and the environment. In this regard, companies have been forced to update their supply chains to ensure that all their suppliers meet the minimum required levels of the law. In this regard, the companies are required to verify, audit, certify that their suppliers comply with the law of slavery and human trafficking (Pickles & Zhu, 2013). In addition, the companies are required to maintain internal accountability standards and conduct proper training for their employees to reduce the risks associated with human trafficking and slavery.

Concept of Business Ethics and CSR

Globalization has facilitated more trade across the border, leading to lack of universal standards and regulation to protect such trade. In addition, the multinational corporations have become more powerful than the individual governments, thus limiting the ability of such governments to regulate them (Adams, 2002). However, the advancements in communications technology and the changes in consumer behavior have exerted pressure on organizations to become more accountable in terms of ethics and social responsibility.

The concept of CSR promotes the ethical behavior toward s the society, leading to increased consideration of stakeholders and the promotion of the social good beyond the legal requirements. Apart from making profits, it has become the responsibility of the firm to take care of the interests of its stakeholders and the environment. The diagram below shows the dimension of CSR.

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Ethical Theories

Ethical theories include systematizing, defending, and recommending on issues of moral values or right conduct. In arriving at a business decision, ethical theories are foundations of ethical analysis, as they are viewpoints on where the management obtains guidance. Wal-Mart applies the theory to a set of common goals for it to be beneficial for their organization. Ethical principles such as least harm and respect for human rights are some of the cornerstones of Wal-Mart CSR (Worthington, Ram, & Jones, 2006). Virtual ethics theory and utilitarian ethical theory are some of the theories that can be used to describe the Wal-Mart Practices.

Utilitarian ethical theory forecasts the impacts of any action taken. In this theory, Wal-Mart is able to compare similar predicted solution and choose the best course of action that is more beneficial to more people and the society. Therefore, the company settles on the choice that results to the greatest benefit to the most people (Vyakarnam, 1997). For example, Wal-Mart chooses to deal with supplies that have proven track record of human rights and environmental protection.

Categorization of utilitarian emanates into two groups namely; act and rule utilitarian. The company takes the action that favors the larger number of people regardless of personal feeling or societal rules such as law and constitution. In this theory, an individual right might be violated in order to attain a benefit to majority people. On the other hand, this law does not put into consideration justice, autonomy, and beneficence.

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It has the element that creates a typology of stakeholders’ cultures consisting of beliefs, values, practices that take a great role in problem solving and maintaining the stakeholders’ relationship (Smestad, 2010). For instance, by selling their products at profit, the company is able to finance initiatives that create benefits for its stakeholders. The customers may be paying more for the products. However, such extra profits are used by the company to support environmental protection initiatives and green economy.

The driving force behind the ethical behavior of Wal-Mart is based on their decision to act as a moral agent, rather than the outcome. The company applies the principles of kindness, humility, and charity to ensure that their stakeholders are safe (Herningway & Maclagan, 2004). These values are based on the religious beliefs that encourage their members to act with honesty and kindness while dealing with other entities.

In their business dealings, Wal-Mart protects their reputation through their honesty and fairness in their business dealings. In this regard, Wal-Mart partners with companies with world class eco-manufacturing facilities and good record of social compliance. In the United States which is the home town of Wal-Mart, majorities are Christians and thus tend to support the Christian beliefs in their business operations.

The ethical principles of Walmart employees is mainly based on the good conduct and fairness and portrayed in the Christian beliefs. Therefore, it is the principle of the company not to exploit people around them and shun any of their partners who exploits their stakeholders. The company does this at will without being forced by any other law or entity.

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Virtue theory holds is necessary to incorporate moral theory in management and the activities of the organization as it directs and motivate behaviors towards the success of the business (Crane & Matten, 2010). It provides for foundation of business ethics with the connection of ethics to business positivity. It also provides an environment in which managers’ advances on tactics, strategies, plans, policies, and procedures to attain a clear business mission and in achieving economic success.

Virtuous behavior is required at all the levels in a business from staffs who understands that an organization is a natural and moral ways of achieving actualization. Virtuous staffs set value producing goals and work towards their achievement as they are energetic who stress on reality, think positively, ask and listen carefully, manage time effectively and are organize their work efficiently.


Intense competition has forced most companies to change their operations tremendously. Due to this, some companies have gone to the extent of benefiting from sweatshops to increase their sales. However, people are increasingly becoming more aware and companies are forced to adhere to the requirements of ethics and CSR. Wal-Mart is one of the retailers that adhere to business ethics and CSR to help their stakeholder. On the other hand, they also benefit from the CSR initiatives.


Crane and Matten (2010) Business Ethics, OUP, Oxford, Chapters 1 & 3

Perry and Ahmad (2015, forthcoming) ‘Islamic and Buddhist perspectives of Corporate Social Responsibility’ in Örtenblad, A. (Ed.) Handbook of Research on Corporate Social Responsibility, Edward Elgar, UK

Adams (2002) ‘Retail profitability and sweatshops: a global dilemma’, Journal of Retailing and Consumer Services, 9 (3), pp.147-153

Porter, M.E. and Kramer, M.R. (2006) ‘Strategy and society: the link between competitive advantage and corporate social responsibility’, Harvard Business Review, 84 (12), pp. 78-92

Pickles, J & Zhu, S. (2013). The California Transparency in Supply Chains Act. Working Paper 15. University of North Carolina.

Smestad (2010) ‘The sweatshop, child labour, and exploitation issues in the garment industry’, Fashion Practice, 1 (2), pp.147-162

Hemingway & Maclagan (2004) ‘Managers’ personal values as drivers of corporate social responsibility’, Journal of Business Ethics, 50 (1), pp.33-44

Worthington, Ram and Jones (2006) ‘Giving something back: a study of corporate social responsibility in UK South Asian small enterprises’, Business Ethics: A European Review, 15 (1), pp.95-108

Vyakarnam et al (1997) ‘Towards an understanding of ethical behaviour in small firms’, Journal of Business Ethics, 16 (15), pp.1625-1636

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