RUNNING HEAD: BUSINESS ETHICS OF AMAZON, APPLE AND WALMART 1

The history and evolution of business ethics

The topic of business ethics has evolved across time and disciplines with various systems

and frameworks being derived to shape how businesses should conduct themselves in their

operations. Stanwick and Stanwick (2016) state that business ethics relates to the collective

values of an organization that are used to measure and evaluate the actions and behaviors of the

organization’s members to determine whether the actions or behaviors are acceptable or not.

They added that individual moral values comprise of three components, which include the

individual’s principles, character, and the consequences of a taking a particular action.

According to Stanwick and Stanwick (2016), there are 3 forms of ethical examinations

which shape business ethics and these are teleological, deontological and values driven

frameworks. The teleological framework comprises of 3 frameworks which are ethical egoism,

utilitarianism and Sidwick’s dualism. Teleological frameworks focus on the results of the

conduct of the individual. Contrast to the teleological framework which focuses on whether the

results are favorable or not, the deontological framework focuses on the duty or obligation s of

the individual in determining the appropriateness of their actions. Under deontological theories

there are 3 branches which are existentialism, contractarianism, and Kant’s ethics.

Good ethics make good business and the primary responsibility of businesses is to

provide a business environment where ethical conduct is practiced. This can be done through

having systems that foster compliance to ethics programs and ensuring these systems are

evaluated regularly to determine their effectiveness. This study seeks to evaluate the ethical
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systems of 3 of the Fortune 500 firms which are Apple, Amazon and Walmart. We will start by

giving an overview of the companies, assessing their code of ethics and their CSR programs.

Overview of Amazon

Founded in 1994, Amazon started off as an online book retailer and has evolved over

time due to its two technologies which are the driving force behind its success- customer

relationship management and information technology systems. Demri (2017) describes Amazon

as an emerging American multinational E-commerce company, which has turned out to be a

leading online retailer offering cloud computing services. Clement (2020) also added that

Amazon.com is an international e-commerce company offering online retail, computing services,

consumer electronics, digital content as well as other local services such as daily deals and

groceries. Amazon is ranked 5th in the Fortune 500 companies and employees about 647 000

employees, with a revenue of $232 billion and net sales of $280.5 billion. The major revenue

generating products for the firm are e-retail sales which comprise of electronics and other

products followed by third-party seller revenues, subscription services and AWS activities

(Clement, 2020). However because Amazon has grown in leaps and bound in comparison with

its competitor’s e-Bay, Alibaba, Flipkart and Walmart, Amazon has been considered to be the

most vulnerable brand worldwide.

The ethical system of Amazon

Utilitarians focus on the net result of their actions instead of the means or motives that

generated the reason for their actions thus they focus on the net results of their actions if they

provide good for the greatest number of people (Stanwick & Stanwick, 2016). Arguable this

philosophy is embedded in the vision and mission of Amazon whose primary focus is on
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ensuring that the customers’ needs are satisfied. One of the major driving forces of Amazon is

their customer relationship management programs which have given them a competitive

advantage over their rivals. In the following section we will assess Amazon’s code of ethics at

play and how they reflect the company’s utilitarianism philosophy.

Amazon’s code of ethics

Amazon.com employees are expected to always act lawfully, ethically, and in the best

interests of the organization as set out in the company’s Code of Business Conduct and Ethics

(the “Code of Conduct”) retrieved from the Amazon website. Being a market leader, Amazon’s

code of ethics shapes the conduct of its business operations with policies that cover employee

health and safety and advocate for zero tolerance to employee discrimination and harassment.

Amazon code of ethics also extend to coverage of conflict of interest issues, and have set out

platform for reporting violations of the code of ethics and anti bribery and payment to

government officials. Their information and technology policies also cover procedures for record

keeping, reporting and financial integrity. Amazon also has policies against price fixing.

Amazon has a commitment towards its employees and has resolved to paying its workers

above the minimum wage, embraces workplace diversity, prioritizes equal pay and gives equal

opportunities regardless of ethnicity or disability, Amazon acknowledges that human-induced

climate change is real, serious, and action is needed from the public and private sectors. Amazon

has embedded in its operation the commitment to reduce carbon emissions, moreover, the firm

has implemented the use of renewable energy sources in their outlets. Customers are at the heart

of Amazon and the firm understands the importance of consumer data privacy and protection.

Amazon is also in support of the Organization for Economic Co-operation and Development
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(OECD) and its work with global governments to review the international tax system and secure

consensus on these points (Amazon, nd).

Evaluation of Amazon code of ethics and ethical system

Amazon has received many critics for the various ethical violations it has committed. The

Ethical consumer (n.d) highlights some of the ethical issues which include inadequate effort on

climate change. tax evasion charges, human rights violations for its employees who work long

hours in harsh conditions, pollution and toxic waste, irresponsible marketing, the usage of

controversial technology, anti social finance, violations on environmental reporting and

involvement in political activities. For an organization whose policies are well crafted to ensure

ethical compliance , Amazon still has a lot of work to do to ensure it operates its business

ethically for the greater good of its stakeholders. Without that, Amazon can lose its market share

as customers switch to more ethical organizations. There is scope for growth in business and

being socially responsible for the e-commerce giant if they are to maintain their reputation and

brand loyalty.

Amazon CSR works

Amazon’s CSR works integrate most of its major stakeholder, i.e. customers, employees

and communities (Ferguson, 2017). Amazon prioritizes customers as the major stakeholder as is

embedded in the overall corporate strategy and vision. The firm also addresses the needs of other

stakeholder, governments and investors. Amazon’s CSR works include supporting the local

communities in which they operate. Some of the works include; Amazon relief fund, device

donation program, educating and empowering workers, energy consumption, carbon emissions,

girls who code, water consumption, waste reduction and recycling and sustainable sourcing.
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Taubin (2015) indicated that for several years Amazon has been criticized for their practices, or

insufficiencies when it comes to community involvement. Although they have worked to

improve their CSR strategy over the last several years many aspects of the company’s practices

have been brought into question.

Overview of Apple Inc.

Apple Inc, whose headquarters are located in Cupertino, California, was established in

1976 as a computer company. The information technology company has designs and

manufactures a wide range of products which include cell phones, computers, tablets, television

products and wearable devices, portable digital music players, and other media devices, as well

as software and services (Kerr, 2015; Aljafari 2016). The iPhone is the core product line of the

organization although its products also include the iPad, Mac, and iTunes. According to Kerr

(2015), the iPhone and the iPad account for nearly 75% of the company’s revenue. Apple

operates in a highly competitive environment and its major competitors are Samsung (on the cell

phones and tablets line) and HP and Lenovo (on the computers line). Apple is cognizant of these

facts and they form part of the firm’s overall strategy as they manufacture their products. Apple

thrives to enhance the simplicity and uniqueness of their products and its customers appreciate

the quality of the products performance (Aljafari, 2015). Apple also differentiates itself from its

competitors by providing the hardware and software of all their devices, this enables them to

leverage on pricing by managing their supply chain. According to the Fortune 500 companies,

Apple is ranked forth as at May 2020.

The ethical system of Apple Inc

According to Stanwick and Stanwick (2016) “ethical egoism is based on the belief that

every individual should act in a way to promote himself or herself if the net result will generate,
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on balance, positive rather than negative results”. It can be argued that the Apple program is

more inclined to the ethical egoism framework as captured in the vision extracted from their

website which states that “Apple is committed to bringing the best personal computing

experience to students, educators, creative professionals and consumers around the world

through its innovative hardware, software, and Internet offerings”. The Fortune 500 companies

ranks Apple 4th, and its market value is $1.1 trillion with revenue of $260 billion.

Apple code of ethics

Apple is committed to conducting its business in an ethical environment and has crafted

its code of ethics policies which are adopted by all employees and Apple suppliers. The Apple

code of ethics covers labor and human rights and advocate for anti discrimination, fair treatment,

prevention of involuntary labor and human trafficking, prevention of underage labor, working

hours, juvenile worker protection, wages and benefits, freedom of association, health and safety,

occupational injury prevention, prevention of chemical exposure, environmental impact, solid

waste management, hazardous substance management restriction, environmental permits and

reporting, pollution prevention and resource reduction. Other sections also covered in the code of

ethics include business integrity, disclosure of information, whistle blowing and anonymous

complaints, protection of intellectual property, audits and assessments, risk assessment and

management, management accountability and responsibility and management commitment

engagement.

Evaluation of Amazon code of ethics and ethical system

Critics have argued that although Apple is reputable and profitable, it has had its fair

share of ethical dilemmas which include; charging much higher prices in the Australian market

than in other markets; making unfair advantage through its dominant market share; condoning
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harsh working conditions (present at its suppliers); misappropriation of the IPR (intellectual

property rights) of rival companies; engaging in unethical marketing activities and compromised

quality on its latest iPhone, child labor, human right infringement, lack of disciplinary actions on

suppliers ethical violations (Callahan, 2012). Apple is also guilty of retailing poor quality

products, misleading advertising, withholding information, infringement of patents and

environmental damage, evading taxes by transferring intellectual property to tax havens to

circumvent profits from that IP, using dangerous chemical bromine in the iPhone undermining

green and sustainable business initiatives Vascellaro (2012). The evidence presented indicates

flaws in the efforts that Apple is making towards ethical compliance

Apple CSR works

According to the Apple CSR report of 2019, Apple undertakes specific corporate social

responsibility (“CSR”) projects and programs, as approved from time to time by the Board in its

capacity as the CSR Committee of the Company, within the following CSR categories:

Promoting education, including special education and employment enhancing vocational skills

and livelihood enhancement projects, ensuring environmental sustainability; promoting gender

equality and women’s empowerment; promoting healthcare including preventive healthcare;

providing disaster relief and providing financial assistance to reputable non-governmental

organizations (“NGOs”) working in any of the above indicated areas.

Overview of Wal-Mart Stores,

Wal-Mart Stores Inc. was founded in 1962 in Arkansas and is now a multinational retail

store with numerous discount stores and warehouses. Wal-Mart provides general merchandise:

family apparel, health & beauty aids, household needs, electronics, toys, fabrics, crafts, lawn &

garden, jewelry and shoes. The company runs a pharmacy department, Tire & Lube Express, and
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Photo processing center as well (www.walmart.com). It is ranked first on the Fortune 500

companies and employees over 2.3 million people and generates revenue of $523 billion.

According to Marcilla (2014), the firm was founded with a mandate to serve customers at

“lowest prices anytime, anywhere”. The focus is on making a difference in the lives of their

customers, and helping customers and communities save money and live better as embedded in

their mission. It has more than eleven thousand stores in 23 countries and 80% of those are in the

United States. Walmart is very competitive and has managed to sustain a competitive edge over

its rivals Target, Home Depot, Sears, Kmart, Safeway and Kroger combined.

Walmart ethical system

When Walmart was established it had 3 policy goals: respect for the individual, service to

customers, and striving for excellence (www.walmart.com). To enable it to achieve these goals,

Walmart employees advanced technology to manage inventory, reduce costs by negotiating

directly with manufacturers and eliminating middlemen (Hayden, Lee, McMahon, & Pereira,

2002). Walmart’s philosophy can be attributed to Sidwicks’s dualism which seeks to establish

common ground between the ethical egoism and utilitarian frameworks (Stanwick & Stanwick

2016). It can be established that since Walmart’s vision is to lower the cost of living to everyone

and to ensure everyone lives a better life it serves the utilitarian aspect and the low prices for

everyone enable it to be sustainable and yet profitable, hence fulfilling the ethical egoism aspect.

Walmart’s code of ethics

According to Mujtaba and Maxwell, (2007), WalMart’s founding philosophy and the

implementation of successful leadership skills and management strategies have led to its global

success. The Walmart ESG report of 2019 indicates that Walmart expects team members,

suppliers and contractors to foster a common culture and set of values. The scope of Walmart
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code of ethics includes Anti-corruption , antitrust , consumer protection , environmental, anti-

money laundering , food safety, health and safety, health and wellness, labor and employment,

licenses and permits, privacy , product safety , responsible sourcing , trade. The Audit

Committee has risk oversight responsibility for ethics and compliance matters and the ethics &

compliance programs have six basic building blocks which are: leadership, risk assessment,

standards and controls, awareness, training, monitoring and response

Walmart CSR works

The Walmart CSR report of (2012) highlights some of the works undertaken by Walmart

and these include winning a Community Commitment Corporate Award in recognition of

community involvement and diversity practices. Through providing low prices always, Walmart

provides value to customers. Walmart also thrives to make a difference in the communities it

operates through; educating the public about recycling and other environmental concerns via a

“Green Coordinator,”, fundraising for local children’s hospitals via the Children’s Miracle

Network Telethon, sponsoring a Community Matching Grant program that involves fund-raising

efforts by a nonprofit organization with the participation of Wal-Mart associates and

underwriting college scholarships for high school seniors.

Conclusion

In their bid to maximize on earning and become sustainable in comparison to

competitors, companies should uphold the highest ethical standards. Apple, Amazon and

Walmart operate in 3 different industries and their founding philosophies are also different to

reflect their values and beliefs. While Apple follows the ethical egoism philosophy, Walmart is

more inclined towards the Sidwick’s dualism while Amazon has a utilitarian philosophy. Both

Walmart and Amazon are customer centric and customers are at the core of their operations as
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embedded in their missions, visions and values. Changes in the operating environment and the

demands of business stakeholders have necessitated that organizations embrace corporate social

responsibility programs. As such, even organizations such as Amazons which were reluctant on

CSR have now come on board. Walmart’s CSR works seems to be fair well in comparison with

those of Apple and Amazon. Amazon and Apple continue to face criticism for their violations of

ethical systems and their violations include tax evasions, unfair marketing, and child labor

among other violations.

The competitive nature of the business environment may force some entities to resort to

non ethical means for survival to maximize on revenue. Some of the unethical practices include

tax evasions so as to reduce operational expenses and increase revenues resulting in higher

margins, hence out pacing their peers in the industry. Ethical business practices aid business

firms to gain competitive advantage because ethical behavior of firms generate positive

externalities, necessary for long term performance of the firm. Management philosophy should

reflect the steps taken by these organizations towards being more ethical and maximizing their

CSR effort. There are opportunities for growth and improvement for all 3 if they are to continue

performing well.
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Apple India Private Limited Corporate Social Responsibility Policy (as of 7 May 2019)

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Ferguson, E. (2017). Amazon.com. Inc stakeholders’ corporate social responsibility analysis.

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Taubin, L.(2015). Issues with Amazon’s CSR strategy. Retrieved from

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Vascellaro, J. E.(2012). Audit faults Apple supplier. The Wall Street journal.78(1), 32-36.