Refer to Case 3: Wal-Mart Manages Ethics and Compliance ChallengesInvestors in your company have been complaining because they feel that top executives are taking the company in a bad direction. Investors are calling for new board members. How would you answer these stakeholders?Be sure to address:How Wal-Mart is managing ethics and social responsibilityWal-Mart’s response to ethical issuesWal-Mart’s contribution to improving economic sustainability of society ### Relationships with Supplier StakeholdersWalmart achieves its "everyday low prices" (EDLPs) by streamlining the company. Well known for operational excellence in its ability to handle, move, and track merchandise, Walmart expects its suppliers to continually improve their systems as well. Walmart typically works with suppliers to reduce packaging and shipping costs, which lowers prices for consumers. Since 2009, the company has worked with The Sustainability Consortium, an association of businesses that helps its members achieve sustainability goals, to develop a measurement and reporting system known as the Walmart Sustainability Index (discussed in further detail later in this case). Among its many goals, Walmart desires to use the Sustainability Index to increase the sustainability of its products and create a more efficient, sustainable supply chain.In 2008 Walmart introduced its "Global Responsible Sourcing Initiative," a list providing details of the policies and requirements included in new supplier agreements. In 2012 then-CEO Mike Duke expanded upon these initiatives to set improved goals for increasing the sustainability of the company's supply chain. He highlighted four main sustainability goals: (1) by 2017, purchase 70 percent of merchandise sold in U.S. Walmart stores and Sam's Club from global suppliers that use the Sustainability Index to assess and share information about their products; (2) use the Sustainability Index as a model for U.S. private brands; (3) apply new evaluative criteria for key sourcing merchants to encourage sustainability to become a more important consideration in buyers' daily jobs; and (4) donate $2 million to fund The Sustainability Consortium. If fully achieved, these goals will increase the sustainability of Walmart's supplier significantly. Company leaders stated Walmart was moving into "phase three" of its sustainability plan, which will involve "reshap[ing] entire systems" toward achieving sustainability goals. Further details have not yet been revealed.Some critics of Walmart's approach note that pressure to achieve its standards will shift more of the cost burden onto suppliers. When a supplier does not meet Walmart's demands, the company may cease to carry that supplier's product or, often, will be able to find another willing supplier of the product at the desired price.Walmart's power over its suppliers stems from its size and the volume of products it requires. Many companies depend on Walmart for much of their business. This type of relationship allows Walmart to significantly influence terms with its vendors. For example, Walmart generally refuses to sign long-term supply contracts, giving it the power to **CASE 3: Walmart Manages Ethics and Compliance Challenges**Walmart Stores, Inc. is an icon of American business. With net sales of nearly $500 billion and more than 2 million employees, the world’s largest retailer and one of its largest public corporations must carefully manage many stakeholder relationships. Its stated mission is to help people save money and live better. Despite past controversies, Walmart has attempted to restore its image with an emphasis on diversity, charitable giving, support for nutrition, and sustainability. The company, along with its Walmart Foundation, has donated $1.3 billion in cash and in-kind contributions. Walmart often tops the list of U.S. donors to charities. However, more recent issues such as bribery accusations in Mexico have created significant ethics and compliance challenges that Walmart is addressing in its quest to become a socially responsible retailer.This analysis begins by briefly examining the growth of Walmart. Next, it discusses the company’s various relationships with stakeholders, including competitors, suppliers, and employees. The ethical issues concerning these stakeholders include accusations of discrimination, leadership misconduct, bribery, and unsafe working conditions. We discuss how Walmart has dealt with these concerns, as well as some of its recent endeavors in sustainability and social responsibility. The analysis concludes by examining what Walmart is currently doing to increase its competitive advantage and repair its reputation.### HISTORY: THE GROWTH OF WALMARTThe story of Walmart begins in 1962, when founder Sam Walton opened the first Walmart Discount Store in Rogers, Arkansas. Although its growth was initially slow, over the next 40 years the company expanded from a small chain to more than 8,000 facilities in 27 countries. The company now serves more than 200 million customers weekly. Much of Walmart’s success can be attributed to its founder. A shrewd businessman, Walton believed in customer satisfaction and hard work. He convinced many of his associates to abide by the “10-foot rule,” whereby employees pledged that whenever a customer came within 10 feet of them, they would look the customer in the eye, greet him or her, and ask if he or she needed help with anything. Walton’s famous mantra, known as the “sundown rule,” was: “Why put off until tomorrow what you can do today?” Due to his staunch work ethic and dedication to customer care, Walmart claimed early on that a formal ethics program was unnecessary because the company had Mr. Walton's ethics to follow.In 2002 Walmart

Economic sustainability refers to the ability of an economy or a business to maintain long-term…

Answered: Refer to Case 3: Wal-Mart Manages…

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