A huge new scandal with the nation’s largest retailer at its core shows again why following the law is the only way to do business.
There’s trouble for Wal-Mart brewing in Mexico over a major bribery scandal. While it is illegal in the U.S. for American companies to pay bribes here or abroad, it is routine practice in Mexico. It’s just part of their business culture; if you want to get something done, you need to pay someone.
Now it’s come to light that Wal-Mart paid bribes to everyone from minor to major officials to try to become the dominant retailer in what is their second largest market.
When a whistleblower in the company emerged, Wal-Mart allegedly engaged in a major cover-up at the highest levels, according to what I read in The New York Times. In fact, the company even reportedly promoted the key architect of the bribery plan to an even higher position.
Stockholders saw a collective $12 billion lose in one day when news of this scandal broke. Several board members and key executives are likely to be booted and there may be some perp walks. Nor is it good for the morale of workers. And the people who don’t like Wal-Mart will just pile on with this news. They’ve feed their critics all the ammunition they need.
Following the law is so fundamental when you do business. That’s why a company like Costco Wholesale famously has “Obey the law” at the start of its code of ethics.
As for Wal-Mart, they will suffer a serious body blow and get new leadership who will hopefully put things right. Because there’s no way Sam Walton would have tolerated any underling paying bribes. And they need more of that founding culture back sorely right now.