Management Audit: Wal-Mart Stores, Inc.
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Introduction
Management audit is conducted to monitor and keep track of the management through a systematic, comprehensive and extensive evaluation of an organization . The goal of a management audit is to identify the weakness and potential challenges that confronts the organization . This is in pursuit of trying to address and resolve whatever problem is identified in the management as part of the risk management program that organizations typically employ. However, management audit is specifically targeted on a particular managerial aspect. Among the areas of concern that management audit are directed on involve the organization’s policies, procedures, programs and performance . A responsibility management audit is a specific kind of management audit that focuses on the organization’s governance, operations and management in relation to how dedicated it is in complying with the specific principles identified under the Ten Principles of the UN Global Compact. Considering the benefit of a management audit, it is valued as an important tool that helps organization at ensuring that the company is able to effectively manage their weaknesses and address the identified challenges for efficiency and productivity. This paper aims to conduct a responsible management audit on Wal-Mart Stores, Inc. The paper will utilize the UN Global Compact's Ten Principles as a matrix for evaluation for its management audit. The selected tool will cover four dimensions which include (a) human rights, (b) labor rights, (c) environment, and (d) anti-corruption.
Wal-Mart Stores, Inc. is an American multinational retail corporation with main headquarters stationed at Brentonville, Arkansas by founder Sam Walton . The company now sits positively at the first spot in Fortune 500’s Top Performing Company for 2014 . Wal-Mart was incorporated in 1969 following its creation in 1962. However, despite the short time that Wal-Mart has been in the business it already has 11,000 stores in over 27 countries worldwide . Given the number of outlets that Wal-Mart has, it is reported to be the largest company by revenue in the world as reported by Fortune 500 in 2014. As per the financial statement submitted by the company in 2014, the company’s revenue was documented at US$ 485.651 billion . With over 2.2 million employees, Wal-Mart is the biggest private employer from a global perspective .
Management Audit Tool: UN Global Compact's Ten Principles
A management audit tool refers to the framework used by auditors to evaluate the performance and the degree of compliance of organizations with the standardized system or matrix. For the responsibility management audit auditors recommend the use of the “Ten Principles” prepared by the United Nations Global Compact, a division of the United Nations Organization in-charge of ensuring the compliance and the dedication of companies towards of the Global Compact Principles . The Ten Principles covers different core values in four specific areas of (a) labor rights, (b) human rights, (c) anti-corruption, and the (d) environment. The documents that serve as framework for the evaluation of the four dimensions are derived from four different documents, namely: (a) The International Labor Organization’s Declaration on Fundamental Principles and Rights at Work, (b) The Universal Declaration of Human Rights, (c) The United Nations Convention against Corruption, and (d) The Rio Declaration on Environment and Development .
Responsibility Management Audit
Labor Rights
Considering that Wal-Mart is the largest private-employer in the world with over 2.2 million employees worldwide, the organization ensures to uphold the highest standards of safeguarding the welfare of their workers. This section contains four specific provisions that were as follow:
The first principle discusses the earnest effort of the organization to associate itself only with a diverse and most reliable suppliers. In the company’s statement of inclusive association it is affiliated with over 3,000 minorities and women suppliers allowing for the organization not to be restricted or limited to a specific kind and classification of supplier.
Wal-Mart abhors any kind of force labor. In response to the recognition of allowing employees to work efficiently and effectively, the company adopt the enhanced scheduling system which allows employees to select their schedules according to what is most convenient for them. Hence, employees who are studying and attending to other obligation are not being forced to choose between their jobs and their other obligations.
Wal-Mart employs an effective system that abolish and segregates applicants and aspirants in terms of meeting the age requirement for working. It does not personally hire employees that are below the acceptable age and neither does it affiliate itself with companies who accepts child laborers as part of its active workforce.
Inclusive in Wal-Mart’s policy is the Inclusion and Diversity Program that was first initiated by its founder Sam Walton since 1962. Central to Walton’s employment policy was the diversity clause.
Human Rights
As part of the Global Ethics that is embraced by the organization, Wal-Mart participate in the global cause of protecting human rights and welfare of the every individual. In fact, inclusive in the diversity program of Wal-Mart is recognition of cultural and religious practices that every employee adapts or honor.
Wal-Mart upholds the rights of the employees and documents every complaints that might be connected with any untoward incident that is associated with human rights abuse and violations.
Anti-Corruption
Wal-Mart aims to fight corruption in the management. In response to the fight against corruption the company has allowed an open feedback system which would cross-validate the performance of their employees.
Environment
Wal-Mart participate in advocacies that is intended to reach a wider market to let them know about the efforts to save the environment. In fact, Wal-Mart has participated in efforts that would inform the people about greenhouse gases and the effects it has on the environment.
Inclusive to the company’s environmental sustainability measures is the earnest interest of Wal-Mart to help make the environment a better place fit for human survival and sustenance. To adhere to these policy the company has adapted three goals that it intends to meet in reference to energy, waste and product. As far as environmentally friendly technologies, the organization has adapted mechanisms that would utilize technologies that limits the use of fuel to reduce fuel consumption for a much cleaner air.
Conclusion
After running a responsibility management audit of Wal-Mart, it came to the understanding of this paper that the organization has been very conscious about meeting the standards. Wal-Mart has been very cautious especially in the process of affiliating and associating themselves with third party representatives like suppliers, dealers and distributors. The organization is aware of the reflective feedback of this association. Hence, they secure that all their suppliers, dealers and distributors are also meeting the same standards of excellence and integrity. Wal-Mart draw important lessons from other organizations who suffer for their affiliates’ lack of social responsibility.
Wal-Mart tries to cover the areas where employees usually encounter some issues. Primarily with the scheduling. Wal-Mart believe in the time management. Time is an important resource for everyone and accounting for the effective and efficient use of time reflects to productivity. Since Wal-Mart encourages their employee to seek further training and growth through advanced learning, the company has adapted what is referred to as the enhanced scheduling system. This system allows employees to carefully manage their time and suggest their own feasible working schedule. Wal-Mart recognize that unless employees are fully concentrated on their work could they only be productive the management has decided that employees need to feel that they are not being forced to working rather they should feel that they are ready for work in mind and body. The enhanced scheduling system incorporate the employees’ feedback of their preferred working hours believing that this approach would assure the maximum productivity of employees with them having the opportunity to select their own preferred schedule.
The company being the largest private employer in the world accounts to 2.2 million workers under its payroll. In addition, Wal-Mart runs 11,000 stores in 27 different countries worldwide. Given these figures it is not surprising if Wal-Mart has a highly diversified workforce. Wal-Mart has been very vocal of how it values its employees and consider them the company’s biggest asset. In lieu with this, the company has embraced a policy of non-discriminatory practice in hiring employees. In fact, part of this non-discriminatory practice of Wal-Mart is their campaign towards Women's Economic Empowerment. The goal of this campaign is to help provide women with the opportunity to better themselves and make themselves economically productive.
In terms of environmental sustainability, Wal-Mart is an ardent defender of the environment. In fact, the company has adapt several ways to help ensure the safety of the environment. Wal-Mart also participated in campaigns that brings the cause to a bigger audience. One of the campaigns that Wal-Mart has initiated is called the truck fleet. The truck fleet employs the use of solar powered carriers that replaced the fuel-based machines used for transporting and lifting of goods. This technology is embraced by Wal-Mart to actually lessen the use of fuel consumption that contributes to air pollution.
Another environmental sustainability project that the organization has embraced is the use of 100% renewable energy. This is another step towards the organization’s carbon foot printing. The use of a 100% renewable energy is a commitment initiated by Wal-Mart in 2005. In 2006, on top of the on-sit solar-project, Wal-Mart has also initialized the construction of large-scale windmills in Mexico. The advocacy was to fully power Wal-Mart using renewable energy. It is the belief of the organization that by converting its energy source to renewable energy the organization will not only save money but they will also help in protecting the environment.
Appendix
Ten Principles of the UN Global Compact
Source: The United Nations Organization, 2014. FAQ: UN Global Compact. [Online] Available at: https://www.unglobalcompact.org/AboutTheGC/faq.html[Accessed 20 April 2015].
Labor Rights
Principle 1: Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining;
Principle 2: The elimination of all forms of forced and compulsory labor;
Principle 3: The effective abolition of child labor; and
Principle 4: The elimination of discrimination in respect of employment and occupation.
Human Rights
Principle 5: Businesses should support and respect the protection of internationally proclaimed human rights; and
Principle 6: make sure that they are not complicit in human rights abuses.
Anti-Corruption
Principle 7: Businesses should work against corruption in all its forms, including extortion and bribery.
Environment
Principle 8: Businesses should support a precautionary approach to environmental challenges;
Principle 9: Undertake initiatives to promote greater environmental responsibility; and
Principle 10: encourage the development and diffusion of environmentally friendly technologies.
Wal-Mart: Global Audit Results
Source: Wal-Mart Stores, Inc., 2014. Wal-Mart 2014 Global Responsibility Result. [Online] Available at: http://www.corporatereport.com/walmart/2014/grr/compliance_global_audit.html[Accessed 20 April 2015].
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