Wal-Mart’s environmental drive, Sarbanes-Oxley and companies’ claims about offering work-life balance all put to the test

Bursting Wal-Mart’s bubble

Life in the “Bentonville Bubble” used to be simple. Every operation had to be streamlined, every market expanded and every last cent rung out of the Wal-Mart machine. In late 2005, that all changed. Greening the world’s largest retailer, headquartered in Bentonville, Arkansas, is akin to Oxfam becoming a profit-making company. It’s a staggering shift – and one this paper appraises with welcome balance.

With some 60,000 suppliers worldwide, the retailer realised that its primary environmental footprint lay in its supply chain. After extensive interviews with Wal-Mart representatives and the firm’s partners, the authors focus in on three of the 14 supplier engagement groups set up by the retailer. Their analysis of these so-called “sustainable value networks” – multi-sectoral groups covering the company’s seafood, textiles, and electronics supply chains – highlights the advantages and possible shortcomings of Wal-Mart’s approach.

On the upside, the company’s “whole-system perspective” is helping it find ways around issues such as fishery depletion, climate change and pollution. The long-term relationships that the company is building with suppliers are also a healthy change from its “price-based, transactional interactions” of old.

On the downside, the network approach could result in spiralling costs if not managed well. The company is also vulnerable to its public commitments backfiring, such as its pledge that all wild-caught fish sold will be sustainable-certified within five years. Balancing green and conventional products in its stores represents another potential point of contention. Eco-friendly products can “cannibalise” sales of shelf staples, the authors warn. Ironically, a last risk is its non-profit network partners dropping away, because a multi-sector approach makes it difficult for them to claim credit for environmental reductions. Fundraisers (such as shareholders and retailers) demand that their money be made to work.

“The Greening of Wal-Mart” by Erica Plambeck and Lyn Denend, published in Social Innovation Review, Spring 2008.

Crime and punishment, post-Sox

Bernie Ebbers became a household name eight years ago when WorldCom collapsed, leaving investors $11 billion out of pocket. The media circus has since moved on, but the former chief executive remains in Oakdale Federal Correctional Complex. Twenty-five years the judges gave him, for fraud and conspiracy in the US’s largest ever accounting scandal.

Sentences such as Ebbers’ would have been “unthinkable” before the Sarbanes-Oxley Act (Sox) of 2002, this paper maintains. Peter Henning goes on to examine Sox’s two pivotal steps in clamping down on corporate fraud: the creation of new criminal offences such as securities fraud and the destruction of corporate audit papers; and the requirement for the US Sentencing Commission to increase the potential penalties for a range of fraud offences in the Federal Sentencing Guidelines.

Using a hypothetical securities fraud case, Henning shows how sentences under the guidelines have tripled from what they would have been just a few years earlier. The paper then moves onto a real case where the US Supreme Court examines a judge’s discretion to decide punishment – that of Gall v United States. Worryingly, the author points out that the guidelines are now only “advisory”. The individual discretion typically granted to federal judges, he maintains, could reverse the tough sentencing created by the landmark Sox.

“The Changing Atmospherics of Corporate Crime Sentencing in the Post Sarbanes-Oxley Act Era” by Peter Henning, Wayne State University Law School, published in the Journal of Business and Technology Law, March 2008.

Work-life dalliance

Today’s corporations speak much about work-life balance. But many employees seem happy with an imbalance. Business academics have extensively documented the large number of young professional women who are opting out of work to put family first. Less attention has been paid to the career-minded women (and men) staying in the office and opting out of family.

Taking US graduate data from 2003, this paper provides grim evidence about the relationship success of high-flyers. Women, it seems, pay the higher price. Female professionals with MBAs are twice as likely to divorce as men with the same level degree. Many women, meanwhile, are avoiding tying the knot altogether. Women with MBAs, for instance, are three times as likely to skip on nuptials as their male counterparts.

Could companies do more? Probably, but the author chooses to focus on graduate-school educators. The ethos of business schools is teaching students early on that professional obligations come before personal considerations. Decreasing the admission age for women in business school, giving preference in admissions to applicants with children and providing financial support for student-parents are just some of the concrete measures put forward to help young professionals learn to enjoy work and play.

“Keeping Women in Business (and Family)” by Robin Fretwell Wilson, published in Rethinking Business Management, April 2008.

News from campus

More than 100 business schools and universities have now put their name to the United Nations-backed Principles for Responsible Management Education. Launched in July last year, the initiative seeks to encourage further education institutions to incorporate the theme of corporate responsibility into their teaching, research and public advocacy.

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