Wal-Mart: The Bad and The Worse

In our ordinary lives, ethics questions can be difficult not simply because of right-versus-wrong choices, but more commonly because of right-versus-more-right or wrong-versus-less-wrong choices.

It can be tempting just to let something slide: the cashier gave me an extra dollar in change because two bills were stuck together, and I should go back and return it to her, but I'm already running late, and what difference will $1 make anyway? (Answer: Not much ... except that it will be taken out of her pay.)

But for corporations chasing ever-higher-growth and ever-better-returns, the temptation to go really wrong can be huge.

As evidence, I draw your attention to the long, extraordinarily detailed, and compelling article written by David Barstow and published in yesterday's New York Times, about bribery at Wal-Mart Mexico.

Dating back several years, the investigation revealed a pattern of bribe payments as Wal-Mart built stores throughout Mexico. When Wal-Mart's headquarters eventually learned of the problem, instead of exploring the situation more deeply, it shut the investigation down:

Under fire from labor critics, worried about press leaks and facing a sagging stock price, Wal-Mart’s leaders recognized that the allegations could have devastating consequences, documents and interviews show. Wal-Mart de Mexico was the company’s brightest success story, pitched to investors as a model for future growth. (Today, one in five Wal-Mart stores is in Mexico.) Confronted with evidence of corruption in Mexico, top Wal-Mart executives focused more on damage control than on rooting out wrongdoing.

Most disturbing of all, "Primary responsibility for the investigation was then given to the general counsel of Wal-Mart de Mexico — a remarkable choice since the same general counsel was alleged to have authorized bribes."

Are you surprised? Sadly, I'm not.

That doesn't mean that I want to see Wal-Mart given a free pass on this issue. Some reader comments are along this line: "Why the outrage? This is apparently the method of doing business in Mexico and in many other Southern Hemisphere countries."

Such behavior might be common -- although that's tarring a whole continent with an awfully big brush -- but bribery is illegal both in the U.S. and in Mexico. Moreover, Wal-Mart prides itself for being a model corporate citizen. In its Statement of Ethics (note: launches as .pdf), there's great emphasis on "integrity". The first three "guiding principles" are:

• Always act with integrity.
• Lead with integrity, and expect others to work with integrity.
• Follow the law at all times.

So how well are those principles holding up here?

Actually, the principles don't seem to held up that well in the U.S. either. Showing a preference for hiring part-time workers over full-time (no benefits!); driving "less efficient" small-town stores out of business thereby (with other "category killers") hollowing out Main Street; resisting attempts to unionize, and so much more.

This is where the crucial difference between ethics and legality comes through. All too many of us assume that "if it's not illegal, it must be OK."

That's not integrity. That's rapaciousness.