Thursday, October 30, 2008

Scruples? Sorry We Don't Carry Those

Well, well, well, look at this. The boys of Mordor are back in the news. Seems they're having themselves a bit of an ethical dee lemma which is sort of like Genghis Khan wondering if he needs anger management classes.

The very first day that Chalace Epley Lowry started working at Wal-Mart Stores as an administrative assistant in the communications department she went through a day-long orientation with a heavy emphasis on ethics. "We were told that even if we see something that has the appearance of something unethical we should report it," says Lowry. Now, two weeks after filing a complaint against a more senior executive, the 50-year-old mother of two finds herself looking for another job.

"When we say 'report'"said one Wal-Mart spokesperson. "We mean ignore. She apparently didn't pick up on all the winking the trainer was doing."

"I thought he had something in his eye," Lowry said.

I acted in good faith, just pointing out that there might have been some wrongdoing," Lowry said.

"See, there's the problem ," responded the Wal-Mart spokesperson. "We don't need people looking for trouble. We need people looking the other way when trouble appears."

"The Ethics Office determined the same day the complaint was filed that the document that created Ms. Lowery's (sic) concerns had nothing to do with stock trading and that there was no violation of Wal-Mart's ethics policy," said David Tovar. "Which was actually a foregone conclusion because we don't, you know, really have an ethics policy."

Soon after Lowry filed the complaint, her identity was disclosed to Mona Williams, the vice-president for corporate communications who was the target of Lowry's complaint. Lowry said it was impossible to remain in the department since Williams was stalking her, so she asked to be transferred. Wal-Mart has said that Lowry now has 60 to 90 days to look for a job within the company, but she may not get one. If she can't find another Wal-Mart job in 90 days, human resources officials have told her that they would have to discuss "next steps."

"And by 'next steps' we mean booting her little tattle tail behind out in the street," Tovar said. "That's what we mean by ethics. Know what I'm talking about?"

For Wal-Mart's own communications department to be dealing with an issue like this is particularly poignant. Williams and the department have been the key people trying to protect Wal-Mart's reputation over several difficult years.

Yes. Well, if by "poignant" you mean the ironicus is approaching its maximus.

The company has come under scathing attacks for its workplace practices from union-backed groups, as well as from several politicians including Presidential hopeful Senator Barack Obama. Wal-Mart has also taken heat from shareholders as its stock price has stagnated.

OK, so increasing shareholder return on their investment is an ethical issue. We think we see your problem.

Most recently, the issue of ethics at Wal-Mart has been in the spotlight because of the firing of a high-profile marketing executive, Julie Roehm. Wal-Mart says that the company dismissed Roehm because she violated the company's code of ethics by accepting gifts from vendors and because she had an affair with a subordinate. "You don't sleep down at Wal-Mart," Tovar told reporters. "You sleep up. What was she thinking? We promoted the subordinate."

All of this has also led to something of a consumer backlash: Some people won't shop at Wal-Mart because they don't want to support a company that they perceive as unfair to workers or bad for the economy. As early as 2004, a confidential report prepared by consulting firm McKinsey & Co. found that 2% to 8% of the company's customers have stopped shopping there "because of negative press they have heard." Another document, prepared in October, 2006, by Wal-Mart's former advertising agency GSD&M Advertising, found that the segment of Americans who say the chain is their No. 1 destination for discount shopping fell from 75% two years ago to 67%. The ad agency suggests that besides competition, Wal-Mart's image could account for this drop-off. The report also says that Wal-Mart's rating as a company that consumers trust and respect has "steadily declined" in the last two years.

"Hey. You want your toothpaste seven cents cheaper than the competition or not," Tovar said. "We got a business to run here, not a church."

Wal-Mart prides itself on ignoring one of the strictest and most stringent ethics policies in the industry. Buyers are not allowed to accept even a cup of coffee from their suppliers. And its 1.3 million employees are encouraged to report any ethics violations that they might suspect or see.

"Funny story there," said Tovar. "See, we hired this lady who was stupid enough to believe that. Stop me if you've heard this one..."

"In spite of the fact that Ms. Lowery was not treated any differently after making her report except for moving her desk to a broom closet and "Squealer" written on the door, and was in fact praised for bringing her concerns to her supervisor's attention by being singled out at a meeting as "That one," Ms. Lowery (sic) indicated that she was uncomfortable continuing in her current position and asked to be transferred," said Tovar in his statement.

Lowry says that a human resources officer she met soon after her identity was disclosed brought up issues related to team dynamics and alleged that she didn't get along with co-workers. "The officer said all my co-workers had complained about me after the boss told them to," Lowry explained to reporters.

"My experience was not what I perceived the ethics line or open-door policy to be, and I would think twice before going that route again," she says.

"Well, she learned something after all then," Tovar said.

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