Walmart and the Mexican Brivery Scandal
Business and Management
Submitted By garthlisa
Walmart and the Mexican Bribery Scandal
On April 22, 2012, the New York Times reported a scandal of bribery in Walmart’s Mexican subsidiary (Markowitz, 2012). Walmart’s actions created issues of legality and ethics. First, in 1977, Congress passed the Foreign Corrupt Practices Act that makes foreign bribery illegal (“Walmart’s Bribery”, 2013). Second, expanding into Mexico caused an ethical dilemma for Walmart as Mexican business practices regularly include bribery (Markowitz, 2012). After discussing Walmart’s bribery actions, Utilitarian practices, and the outcome, this paper will analyze the opposing Deontological model and propose a personal opinion of the proper business ethic for this situation.
Walmart’s Actions In 2012, the New York Times revealed three details in the investigation of the Walmart bribery case. First, officials at Walmart de Mexico made cash payments of 24 million dollars to officials to alter city zoning to expedite building permits. Second, going back to 2005, Walmart learned of the bribery accusations and sent an investigator who reported that laws were being broken. Third, despite investigator recommendations to probe further, Walmart’s CEO stated the investigations were too aggressive and transferred the investigation back to Walmart’s general counsel in Mexico who authorized the bribes (Gusin, 2012).
The Utilitarian Model of Business Ethics, Bribes, and Walmart The Utilitarian model states that decisions are based on outcomes that are “consistent with goals such as efficiency, productivity, and high profits” (Robins & Judge, 2015). To expedite profits, Walmart offered bribes to avoid the bureaucratic red tape that slows Mexican business and to conform to the Mexican way of doing business (Markowitz, 2012). In this situation, Walmart’s actions supported the Utilitarian model of maximizing financial benefits to stakeholders...