Gini Dietrich

The PR Nightmare for Walmart

By: Gini Dietrich | April 24, 2012 | 
118

I would be remiss if I didn’t blog about the PR nightmare Walmart has caused itself by allegedly covering up the bribes they paid Mexican officials in exchange for getting building permits faster and other favors to help it aggressively expand in the region.

Late last week the New York Times revealed a Walmart attorney received an alarming email from a former executive at the company’s Mexico subsidiary, which described how the company had orchestrated a campaign of bribery in order to win market share. The problem? This happened in 2005.

That same year, the attorney dispatched a committee to Mexico City and found, yes indeed, there was suspicion both Mexican and U.S. laws had been broken. The lead investigator at the time recommended Walmart continue the investigation to confirm suspicions.

Instead, Walmart shut it down.

The campaign of bribery isn’t the PR crisis…it’s in how it was handled. Rather, in how it was not handled.

I’m not an investor relations communication professional, but I do know enough to know Walmart has violated the Sarbanes-Oxley act, which was instituted in 2002 in the wake of accounting scandals at Enron, Tyco, WorldCom, and other giant organizations.

Sarbanes-Oxley requires corporations and their auditors to report on the company’s internal controls for financial reporting. It also requires CEOs and CFOs certify the material accuracy of financial reports.

If these allegations are true, Walmart has run afoul of all of these provisions…and the responsibility lies at the feet of its current chief executive, who had just been promoted to run all international divisions in 2005…which Mexico falls under.

If Walmart is found to have violated the Foreign Corrupt Practices Act, which forbids paying bribes to foreign officials, there will be huge fines, its executives will lose their jobs, or they may even go to jail.

And the giant retailer will be left with a PR crisis that will hurt its reputation for years to come, not to mention the distraction the company is facing for most of the rest of this year.

It’s been reported Lee Scott, the company’s CEO in 2005 and current board member, called a meeting in early 2006 to discuss the findings of the investigation committee and decided to hand it back to the Mexico subsidiary’s general counsel (who has been named in the investigation). From there it went nowhere.

I know I’ve been accused of being ethical to a fault, but I really don’t understand how you can sit in a board meeting and decide not to do anything, when it’s pretty clear there have been bribes.

Did we not learn from Arthur Andersen and Bridgestone/Firestone and Enron and WorldCom and John Edwards and Bill Clinton, and, and, and?

The problem is never in the issue at hand. The problem is always in how it’s handled when the truth comes out.

Why is it so hard for human beings to say: We made a mistake, we’re fixing it, and we’re sorry?

Are we so ego-centric we think we won’t get caught?

About Gini Dietrich


Gini Dietrich is the founder and CEO of Arment Dietrich, an integrated marketing communications firm. She is the author of Spin Sucks, co-author of Marketing in the Round, and co-host of Inside PR. She also is the lead blogger at Spin Sucks and is the founder of Spin Sucks Pro.

  • burgessct

    There is a word to describe this lapse in judgement: Greed.
    One asks, what were you thinking? Answer: They weren’t.
    So now that they have wrapped themselves up in FCPA violations, their “spin cycle” will be long, arduous and totally self-inflicted.
    Thanks for a great post
    Christopher (@burgessct)

    •  @burgessct Greed is really at the bottom of all of these problems. So sad.

    • ginidietrich

       @burgessct It’s really bothersome to me. They have to know they’re going to get caught. It’s so much easier to deal with it in 2005 than in 2012.

    • rustyspeidel

       @burgessct Oh, they were thinking. Thinking about deliberately hiding the truth! Arrogance. 

  • JeffRice64

    @ginidietrich It’s impossible 2 tweet about the injustices done by American Co. 2 keep wages low. Walmart, Mandarin 4 cheap goods.

    • ginidietrich

      @JeffRice64 It’s pretty bad for them right now

      • JeffRice64

        @ginidietrich I’ve seen other ‘calamitous’ events before that didn’t deter shoppers 1 whit. Somethin 4 nothin rules among everyday people.

      • JeffRice64

        @ginidietrich Even my acidic tweets have no effect on the every day person. All they do is rile me up. Me. Only.

        • ginidietrich

          @JeffRice64 LOL!

      • JeffRice64

        @ginidietrich I’m surprised I didn’t use the ‘F’ word n all grammatical forms n tweeting about Walmart.

  • hriefs

    @ginidietrich Nice post. Should be “Arthur Andersen” instead of “Anderson Consulting”

    • ginidietrich

      @hriefs Oh good catch. Thank you!

      • hriefs

        @ginidietrich It’s still fresh having worked on it at Ketchum way back when.

        • ginidietrich

          @hriefs I would imagine so!

  • SnezanaSubotic

    RT @ginidietrich The PR Nightmare for Walmart http://t.co/sHHYmLXz

  • RickCaffeinated

    Gini – love love love the article and the issues you address. But the grammar nazi in me asks that a comma be removed: “Late last week, the New York Times revealed, in September 2005, a Walmart attorney…” – that first comma makes it read like “late last week in Sept 2005”. I know – I’m sorry – forest for the punctuation trees. 🙂

    • ginidietrich

       @RickCaffeinated Good catch. Thanks.

      • RickCaffeinated

         @ginidietrich you’re going to block me, but … your edit still reads like “recently” and “Sept 2005” – recommended: “The New York Times recently revealed **that**, in September 2005, a Walmart attorney received…” – or, “The New York Times recently revealed a Walmart attorney, in September 2005, received…” 
         
        Sorry – trying to be a good grammarist 🙂 – thanks again!

        • ginidietrich

           @RickCaffeinated OK. I had my team change it as I’m on the road. I can’t do anything about it right now so you’ll have to close your eyes past it until I can get to it.

        • RickCaffeinated

           @ginidietrich Aquaman is probably sending giant squid after me right now…. 🙂

  • The language of FCPA might play to WalMart’s favor here, quite honestly. “Facilitating payments” aren’t exactly bribes, to my limited understanding, so the accusations of bribery *might* be a bit premature. Not really my speciality area. 😉
     
    I did catch an NPR report on this story yesterday – at one point, Walmart de Mexico was opening a store every day for an entire year, in an economy 1/10th the size of the US’s. That’s jaw-dropping. 

    • ginidietrich

       @jasonkonopinski Based on everything I’ve read since last Thursday (and it’s a lot), there are very specific bribery charges that are being investigated. They were brought to light in 2005 and then nothing was done about them. So it’s more around that than the exact charges. It’s always about how it’s handled, than about the issue to begin with. That’s when it becomes a PR issue separate from the legal issue.

  • This isn’t the first PR debacle Wal-Mart has been in the middle of and it won’t be the last.  They pay low wages, work you to the bone, have been sued for not promoting females into positions of management. Sure, we’re all upset and angry about this one – but pull up in a parking lot on a Saturday afternoon and it’ll be pretty clear just how much the general population cares about their alleged bad business dealings. 
     
    It’s sad because the business that Sam Walton created was one based on completely different principals and greed has clouded everyone’s judgement. I’ve tried to avoid Wal-Mart as much as possible in the last five years. 

    • ginidietrich

       @Maranda I think the difference here is the executives could go to jail. That’s the first time that charge as been on the horizon. And, like many companies and politicians before then, we see what happens when the general public finds out about that.

      •  @ginidietrich Personally, I think you’re right and I have a feeling that this will end up going much higher up in the long run. However, I think it is important to note that Wal-Mart is the only game in town in many places. For example, the community that I am from does not have a Wal-Mart directly in town and they have access to a family owned grocery store, but since this store has the most ridiculous markup ever, people chose to drive 30-45 minutes to get to Wal-Mart. That won’t change just because of this. In fact, most people will probably never know what’s going on behind the scenes. 

        • ginidietrich

           @Maranda It will change if this causes Walmart to go out of business. That might be a bit of a stretch, but they’re going to be distracted with this all year. And, if it goes further, they’ll start looking at the practices of the company in all countries. It could very easily mean they go out of business. And then local businesses will reign again.

  • jenzings

    This is part and parcel to the growth at any cost strategy that companies seem to think they need to maintain to keep share prices going ever higher. I don’t know what the answer is. My guess is that it isn’t just WalMart, they are simply the ones that got caught. Will people notice? I don’t know. I really wonder if they care as long as they can continue to stampede all over one another for $4 waffle irons on Black Friday.
     
    Side note: companies are constantly complaining about government regulations being a cost to doing business. And yet, some–a handful of bad actors–continue to pull moves like this, which inevitably lead to Congress getting its nose out of joint and proposing more regulations to “fix things.” They are inviting just the sort of heavy-handed regulation they are constantly complaining about. Want fewer regulations? Start aggressively self-policing.
     
    Wow, a bit grouchy today, aren’t I? This sort of thing just bugs me, but I too have been accused of being ethical to a fault, whatever that means. Go get ’em, Gini.
     

    • ginidietrich

       @jenzings I do think people will notice if their executives go to jail. Look what happened to the companies before them. I just don’t understand how you find out a subsidiary is doing this and sweep it under the rug. It’s SO EASY to say, “We just discovered this is happening and this is what we’re doing about it.” You become a hero at that point – looking out for your customers and all of that. But noooooo. 
       
      And I’m with you on the self-policing thing. In fact, it is an ongoing topic of conversation with one of our clients (they agree). 

      • rustyspeidel

         @ginidietrich What kills me is they PROMOTED and GAVE MORE RESPONSIBILITY to the very people that initiated the bribes. And the guy that blew the whistle? Discredited, blamed, marginalized. Classic bullshit.

        • ginidietrich

           @rustyspeidel Yeah…the GC who seems to be to blame is now in one of the highest leadership positions. It’s bad.

      •  @ginidietrich But when you did it and you know it’s your fault and that you let it happen…i.e. when your hands are all dirty…it’s harder to say “We just discovered this…” because well if it’s a lie it’s easier to just sweep it under the rug now isn’t it?

        • ginidietrich

           @rachaelseda I mean, they should have said they (the U.S.) discovered it in 2005 because they did. The Mexico branch is a subsidiary, run by a completely different executive team. It was a discovery they swept under the rug, but they could have done the honorable thing and come out with it instead.

        •  @ginidietrich  @rachaelseda I don’t mean to diminish the import of this whole ordeal (because, it’s definitely BAD), but there’s a real culture of corruption and bribery that exists in Mexico. If you’re not greasing palms, things aren’t getting done.  
           
          There’s a larger conversation to be had about the culture ‘in country’ that contributes to the larger problem of greed. 

        • ginidietrich

           @jasonkonopinski  @rachaelseda Sure, but it violates the Foreign Corrupt Practices Act. Just because it happens doesn’t make it right. And, when it’s discovered, you don’t send it back to the guys are suspected of doing it. You open an investigation and you make it stop.

  • I hope the upper management goes to jail and gets beat up and assaulted in jail. Considering the damage they have had on families and workers and communities in pursuit of profits while holding the bible they have earned this. Walmart is a skeezy sleazy company and it was only time before something happened to come back and get them kharma always comes around.
     
    Guilty until proven innocent in my book. I feel if they were ultra christian conservative speak family values out of one mouth corner while they destroy them out the other mouth corner I wouldn’t be so upset at them. I would then view them just as a cut throat company vs a blight on this planet.
     
     

  • I hope the upper management goes to jail and gets beat upin jail. Considering the damage they have had on families and workers and communities world wide in pursuit of profits while holding the bible they have earned this. Walmart is a skeezy sleazy company and it was only time before something happened to come back and get them kharma always comes around.
     
    Guilty until proven innocent in my book. I feel if they were not ultra christian conservative speak family values out of one mouth corner while they destroy them out the other mouth corner I wouldn’t be so upset at them. I would then view them just as a cut throat company vs a blight on this planet. But the hypocrisy makes things so much worse.
     
    Jesus farts in the Walton’s general direction as monty python would say.

  • I hope the upper management goes to jail and gets beat up in jail. Considering the damage they have caused  families and workers and communities world wide in pursuit of profits while holding the bible they have earned this. Walmart is a skeezy sleazy company and it was only time before something happened to come back and get them kharma always comes around.
     
    Guilty until proven innocent in my book. I feel if they were not ultra christian conservative speak family values out of one mouth corner while they destroy them out the other mouth corner I wouldn’t be so upset at them. I would then view them just as a cut throat company vs a blight on this planet. But the hypocrisy makes things so much worse.
     
    Jesus farts in the Walton’s general direction as monty python would say.

    • ginidietrich

       @HowieSPM It makes me angry because it’s all so unavoidable. Come out in 2005/2006 and say this is what you’ve found and you’re a hero. Sweep it under the rug and you go to jail. Why is that so hard for people to get?

      •  @ginidietrich the delay makes it worse. What sucks is every B-School Undergrad Degree requires an ETHICS class. We have laws that punish. and who also gets screwed when this stuff happens? The PR?marketing folks who now have to react and fix ‘the image’

        • ginidietrich

           @HowieSPM Yep. You’re exactly right.

      •  @ginidietrich Because people tend to think they’re invincible, especially those in power. It’s unfortunate and despicable…but in the end those who can’t truly handle the responsibility that power brings, are revealed. It’s crazy to see greed and conceit consume people but what sucks is all the innocent people who are hurt along the way.

        •  @rachaelseda  @ginidietrich and if the executives don’t go to jail this blows up the whole law forbidding bribery of foreign governments and officials. So if I was Walmart execs I would be crapping in my pants because I seriously do not believe they can let some underlings pay for the misdeeds. It will green light chaos.
           
          Though we tend to allow CEO’s to get away with sleazy work in the US this is different in my opinion.

        • ginidietrich

           @HowieSPM  @rachaelseda It’s going to be interesting to watch, that’s for sure. There are plenty of people in the U.S. who want to see them fall. I wonder if that will have any affect on how this plays out?

        •  @ginidietrich  @rachaelseda I took a screen shot of Gini’s comment ‘Yep You’re exactly right’ and I blew it up wall sized and it is now my office wallpaper and also now the top of my letterhead.

        • ginidietrich

           @HowieSPM  @rachaelseda Bwahahaha! I just spit Cheerios at my screen. LOL!

        • rustyspeidel

          @HowieSPM @rachaelseda @ginidietrich They promoted the perpetrator!!

        •  @ginidietrich  @HowieSPM HAHAHA LOL hilarious!

    • ladylaff

       @HowieSPM Totally agree with your point about hypocrisy and so-called family values.  I’m all about peace so don’t wish anyone to get beat up on jail.  But I do sincerely hope some of the other inmates fart in their general direction.

  • HLeichsenring

    RT @ginidietrich: The PR Nightmare for Walmart http://t.co/BCu9MjxI #PR

  • rustyspeidel

    Dammit! I KNEW you were gonna write about this before I could!!! 

    • ginidietrich

       @rustyspeidel Where were you going to write it??

  • John_Trader1

    Maybe I’m not giving Wal Mart’s clientele enough credit here, but in the grand scheme of things will the majority of their customers really care about this in the end? Do you think it’s possible that Wal Mart made a calculated guess that they would take the risk of getting caught to more rapidly expand their Latin American foothold by banking on the public’s apathy or ignorance on how this would ultimately affect their own lives?
     
    This is a great case study on lack of investor relations PR and questionable ethics, and I suppose that by writing about it, analyzing it, and discussing the situation among a community it will get attention. Sadly, in my opinion it may not be nearly enough to have any real effect on the bread and butter of Wal Mart’s customer base to really have any tangible impact on Wal Mart’s perception.

    • ginidietrich

       @John_Trader1 I do think they will…if the executives go to jail. This is bigger than sleazy work practices and no benefits. This could take the company down completely. 

      • jenzings

         @ginidietrich  @John_Trader1 Gini, you’ve said that this could take down WalMart a couple of times–do you really think so? I guess I’m of the mind that: 1) they’d be more likely to do a clean-house type thing first, and 2) *maybe* rename/rebrand the company.
         
        The jolt to the economy–number of people fired, etc. if the company just went under would be staggering. It’s honestly not something I’d like to see, nor am I hoping it will happen.
         
        It also important to note–I think–the good that WalMart does, and I know I’m in the minority when I point these things out. WalMart’s move to provide organic produce has done more to increase the amount of farmland to move to organic growing than pretty much every other source combined, including Whole Foods. Their size and buying power can do much harm, but can also, when directed properly, do a lot of good too.

        • ginidietrich

           @jenzings  @John_Trader1 I do think it’s going to affect them significantly. They could go the way of Arthur Andersen and rebrand themselves. If their executives go to jail, the company will be in shreds.

        • ElissaFreeman

           @jenzings
           @John_Trader1 @ginidietrich I have to disagree with you Gini (as odd as that sounds!) You invest money with Arthur Anderson and Walmart providesy you with savings on everyday purchases.  Customers may “tsk tsk” them…but will it stop them from entering their stores.  I think not. A deal is a deal is a deal.
           
          However, the other point I’d like to raise is this: when it comes to providing PR/crisis comms counsel to major corporate players like Walmart…perhaps we as PR pros should add in the “just because you are big and powerful, you are not beyond reproach…or the law” strategy.  Hmmmm….

        • ginidietrich

           @ElissaFreeman  @jenzings Same thing happened to Bridgestone/Firestone (and I worked on that crisis). I don’t know…based on experience, I think this has bigger implications. 
           
          I know the communication pros aren’t typically at the table during these conversations and many are fearful of their jobs if they speak up, but I do think it’s our jobs to say exactly what you’ve said here, Elissa. 

        •  @ginidietrich I hope they don’t go under.  I one of the poor people who buys his groceries there, because I get more.  I wish they hadn’t bribed people, but ultimately, when I’m hungry I just want inexpensive food (and grotesquely expensive blueberries, which are super  yummy)
           
          Someday, I hope to be in a financial position to be unaffected if they go down, but for now, I still need them.  Of course, whatever the fallout, it should take a while.  BP is still standing.

        • ginidietrich

           @ExtremelyAvg I wonder why their blueberries are expensive?

        •  @ginidietrich Oh, I think blueberries are always expensive.  I don’t think it is just Wal-mart.

        • ginidietrich

           @ExtremelyAvg Stupid blueberry agents.

        • rustyspeidel

          @ginidietrich @ElissaFreeman @jenzings The only thing that will stop them is devastating legal or financial consequences. Ethical dilemmas seem lost on many public company execs these days. Bank bailout. No consequences. Bonuses paid. WalMart bribes, exec gets promoted or assigned his own investigation.

  • ladylaff

    As an obsessive watcher of the Leveson Inquiry on ethics in the media, which has at its heart, the analysis of News International, a subsidiary of News Corp., I am utterly fascinated by this topic.  News Corp is now up to its neck in doo doo because employees of News International have been, among other things, including phone and internet hacking, have been bribing the POLICE to obtain exclusive access to information about crimes in order to sell more newspapers.  In many documented cases paparazzi arrived at crime scenes BEFORE the actual police.  It is a crime and assault on democracy of EPIC proportions and you can’t tell me for a second that the Murdochs were too busy at their high-level meetings to recall why a series of humongous payments to private individuals continued to be rubber-stamped.  But unfortunately the corporate lawyers tend to commandeer the communications strategies in these circumstances and their instincts are to do everything in their power to keep the genie in the bottle.  However as the News Corp case study reveals, when the truth inevitably escapes in a slow, painful, and in this case, mind-blowing series of extraordinary revelations, the ultimate damage to both the reputation and the bottom line becomes much greater.

    • ginidietrich

       @ladylaff I wonder what would happen if we bribed the police for a news scoop? Oh yeah…we’d be arrested. You’re absolutely right in that the slow, painful death is always more costly than just coming forward to begin with. Makes me crazy.

  • VickiDay

    Very interesting comment in the Times Business leader column by the editor Ian King about this – he says the same as you (due to pay wall can’t do the link online) but also that these allegations will be used as a stick to beat it every time it seeks to expand.
    That may not be an unwelcome development for investors , many of whom are unhappy at the pace of Wal-Mart’s international expansion not all of which has proved profitable .
    In the UK we have four large supermarket groups and Wal-Mart trades under the name of Asda  

    • ginidietrich

       @VickiDay It’ll be interesting to see how this affects their international expansion. If they did, indeed, violate the Foreign Corrupt Practices Act, that article you mention is dead on right.

  • ginidietrich

    @RickCaffeinated Ha!

  • ginidietrich

    @MeredithLEaton Sheesh is right

  • I don’t know, but is it really too much to ask for big business to play by the freakin rules? Or is it established that there are a different set of rules? Probably both, although my contempt is pointed more toward the Mexican Government. If they’re condoning this practice, it’s just

  • GrizzardComm

    @ginidietrich Humans have an instinct for self preservation, and honestly confessing one’s mistakes is sort of counter-intuitive for that.

  • I don’t know, but is it really too much to ask for big business to play by the freakin rules? Or is it established that there are a different set of rules? Probably both, although my contempt is pointed more toward the Mexican Government. If they’re condoning this practice, it’s just an extra cost of doing business. Btw, I love the evil smiley face!

    • rustyspeidel

      @SociallyGenius AppArently it is. They are never held appropriately accountable.

    • ginidietrich

       @SociallyGenius I really don’t understand why it’s so hard for human beings to say they’re wrong. If you look at this logically, you know it’s going to cost you less if you come clean seven years ago than if it comes out down the road. The only reason people don’t come clean is because they think they won’t get caught. Makes me nuts.

      •  @ginidietrich  @SociallyGenius Even further, just look at our littered history of this sort of thing. in EVERY case where someone denies they are wrong, and tries to hide it, they are caught.  The upfront denial after being caught always works against you. 

        • ginidietrich

           @KenMueller  @SociallyGenius EXACTLY!!

      •  @ginidietrich I’m backlogged, so I hope you’ll excuse the majorly late reply… but we aren’t talking about human beings here – we’re talking about a corporation. (Yeah, I know, don’t get me started on that debate.)While a human being might want to say “I’m sorry, what I did was wrong” – that’s a whole different matter from a human being saying that as part of a corporation. That becomes a nightmare on the legal & fiduciary duty side of the house. Because “coming clean” in our society if you are an executive means admitting to legal wrong-doing. That means opening not just yourself, but the corporation up to legal liability.  If 2 centuries of being one of the most litigious countries in the world has taught us nothing else? It has taught us that you don’t say “I’m sorry, what I/we did was wrong” because that means your lawyers are going to murder you since you essentially just ‘confessed’ on the record and it’s going to be more than just a matter of stock prices dropping.That said – I’ve had the personal fortune of meeting both Lee Scott & Eduardo Castro-Wright briefly back in 2008. In the few minutes I had to assess them? Both struck me as sincere, smart, driven men – also the kind of people who wouldn’t say “I’m sorry, I was wrong” if that was the case. But they also have a pretty savvy (and large) in-house legal team at Walmart – and there’s no way you get to C-level status with a multinational corporation without learning when to listen to your lawyers and shut up.
         
        I guess what I’m saying is that no matter what turns out to be the truth of the case or who ends up bearing the onus? It’s one thing for a human being to say “I’m sorry” and another for a human being to say “we’re sorry” on behalf of a corporation. :

        • ginidietrich

           @LucretiaPruitt I know. And that’s what is so disturbing. This stuff will continue until a corporation stands up and does the right thing. It’s a shame it’s determined OK to lie in our country to avoid lawsuits.

  • GrizzardComm

    @ginidietrich It’s undoubtedly the right thing to do, but it sort of short-circuits our brains. We want to cover up and lie and spin instead

    • ginidietrich

      @GrizzardComm It’s awful because it’s always worse when it comes out. And it always comes out

      • GrizzardComm

        @ginidietrich Exactly. But we tend not to want to admit it unless we have to. It’s hard to convince someone to admit it when they don’t.

  • mitchellfriedmn

    @ginidietrich FCPA, business practices overseas, corporate ethics bigger issues here

    • ginidietrich

      @mitchellfriedmn Yeah…bit time

  • People like cheap products and unless there is more than a hand slap here nothing much will happen because their customers will keep shopping there. I wouldn’t say that the company is above the law because no one/thing is, but there is an enormous beast here.
     
    The automotive and banking industries were bailed out. Curious to see what happens during an election year.

    • ginidietrich

       @TheJackB The difference is when executives go to jail, which could happen here. It may not be the end of them, but it may end their international growth.

      •  @ginidietrich  @TheJackB the Huff Post reported congress and department of justice have been investigating since December and the CEO has been requested to talk with the Feds. Assuming there are any available Feds not at Colombian Brothels.

        • ginidietrich

           @HowieSPM  @TheJackB HAHAHAHAHAHAH!!!

  • sherrilynne

    RT @ginidietrich: The PR Nightmare for Walmart http://t.co/GWy1aA06

  • JulesZunichPR

    The problem is that there are far too many people who are willing to sit on Boards and not do anything about anything. Generally these people are the ego-centric type who would rather choke on their own stock options than say “We made a mistake. We are sorry. This is how we are fixing it.”

    • ginidietrich

       @JulesZunichPR It’s astounding to me. It always costs more and hurts more when it eventually comes out. Because it always comes out.

  • savithoughts

    Agreed Gini, but having worked in corporate America, I don’t have much faith or trust in them anymore. Profits first. It’s ironic, this foolish action. Had they put people/ethics before profits in the day-to-day decisionmaking, they’d see long-term gains and sustainability. This short-term tactic of lying/sweeping under rug to keep current profits intact only shortchages companies, by shuttering a consequence into the future, only making the financial impact that much greater and the reputational impact insurmountable.

    • ginidietrich

       @savithoughts That’s what totally gets me. It’s completely short-sighted. It’s going to cost them….why not manage it when it happens instead of when it comes out?

  • ginidietrich

    @imacsweb Seriously

  • nateriggs

    @imacsweb haha. Well said!

  • kamkansas

    Right on! Sing it, Gini! MT @Soulati: A big ol’ PR crisis for Walmart http://t.co/MT9rzBQX by @ginidietrich

    • ginidietrich

      @kamkansas Singin’!

      • kamkansas

        @ginidietrich So are you glad March Madness is over? It was quite a ride for the Jayhawks! My fingernails are just now growing back 🙂

        • ginidietrich

          @kamkansas LOL!! Mr. D was in New Orleans for the Final Four. He came home very unhappy

        • kamkansas

          @ginidietrich Oh my goodness! Lucky Mr. D to be there! Sorry he came home unhappy. Nobody at my house was happy that night either 🙂

        • ginidietrich

          @kamkansas It’s OK. I think he drank through it.

        • kamkansas

          @ginidietrich Haha! I think I did too. And I may have even consumed a few cupcakes to help drown my sorrows!

  • ginidietrich

    @ckrohn1 Chris! Hi!

    • ckrohn1

      @ginidietrich hi yourself! How are things? Just as time-pressed?

      • ginidietrich

        @ckrohn1 Have a book coming out next week so, um, yeah… How are you??

        • ckrohn1

          @ginidietrich Wow next week – you *are* busy! All good here, no books ready to publish tho. 🙂

  • ginidietrich

    @TMuellerFFM Thank you!

    • TMuellerFFM

      @ginidietrich You’re welcome, Gini. Thanks for the great post!

  • M_Koehler

    Ok take 2 on the comments….. As you know, my dealings with Wal-mart take up an exceptionally large portion of my work day. This situation is being watched closely here. We hope this doesn’t hurt us. I am not shocked this went on. They are Wal-Mart and they get what they want. That is their attitude. We venders do not help the situation by capitulating to their demands. But most companies are not in a position that they can pass on that much business. This is one of the many reasons we try to a avoid shopping there but it is increasingly difficult to do so in this semi rural town of ours.

    • ginidietrich

       @M_Koehler So what happens if their executives go to jail? Is there discussion happening internally about that?

      • M_Koehler

         @ginidietrich I’m sure there is discussion surrounding them going to jail, however our bigger concern is how bad is their business going to suffer from this and how much is that going to impact us and on the flip side who is going to gain from this mess. I would expect you to see some small upticks in business at regional chains, however I bet you see the largest increase at Target. I’m not sure if this will effect sales at WM for petfood however. If I start seeing retail teams scrambling for last minute promotional volumes in the coming weeks, I will know my answer.
         
         @ElissaFreeman I completely agree. I’m very curious to see who the next one is that’s caught doing this. WM is not the only one and I’m sure it’s not just in Mexico.

    • ElissaFreeman

       @M_Koehler
       Your point is well taken. It’s that “we are Walmart and you’re not” attitude this is pervasive among similar companies in the Fortune 50. Sure it takes cojones to run a successful corporation, but social responsibility is not just an HR program; it”s something that needs to be embodied by the C-Suite.  Part of me thinks that Walmart felt it was ‘okay’ to engage in bribery, cuz “everyone in Mexico does it.” I’m sure other companies have engaged in the same practice…it’s just that they never got caught.

      • M_Koehler

         @ElissaFreeman See my above comments. Not sure why it got added to that reply. Another sad part to ponder, no one is going to learn a hard lesson from this. Yes someone will go to jail but is it really going to be the people that did this or fall guys. And are they going to be doing hard time. Time will tell, but I don’t think the punishment will send a harsh [enough] message to corporations that this is just unacceptable behavior.
         

        • ElissaFreeman

           @M_Koehler
           Perhaps its our jobs as PR counsellors to start providing early advice to the C-suite on playing fast and loose with the law….and the ramifications it can have???

  • They just think that their money, power and lawyers can fix everything if they get caught doing something illegal, and 99 percent of times they are just right. Human beings tend always to see those with a lot of money as different. Mr. Hughes would have been thrown into an Asylum if he was just a common human being but being Hughes he was more or less seen just as highly “particular” or “extravagant”.
     
    If I’m right it’s not the first time Wal-Mart indulges in unethical behaviors, isn’t it? Only that with money you can buy more or less everyone and everything. Luckily not all the times but usually it’s needed a catastrophe to have those kind of businesses to expose their business practices like in the Gulf of Mexico or Fukushima.
     
    Also usually they don’t say “We made a mistake” but “We got caught”. It’s like those criminals who become witnesses but only after being caught by the Police, before that everything is cool.
     
    Well, when you get caught it’s easy to say sorry. But there are no excuses.

  • annelizhannan

    @SpinSucks Looks like they are addressing their nightmare in DC!! http://t.co/8KuWufob

  • Corruption can be deeply entrenched in business, politics, and culture. Really. It’s everywhere.
     
    I think of Loïc Le Meur’s team of Seismic-related mobile app developers which he recently blogged about – trying to help them find new jobs.
     
    http://loiclemeur.com/english/2012/03/who-wants-a-great-engineering-team-in-bucharest-please-help-me-spread-the-word.html
     
    I am told Le Meur’s team was employed in a manner that subverts the ordinary employment taxes according to Romanian Law. Official salaries were registered at the minimum legal salary (around $250/month). The remainder of the “salaries” were paid in other ways that avoided the taxes the company should have been paying to the Romanian government. But this is a common practice…
     
    I once wrote about an investigation of such practices: The Scourge of Inexorable Corruption http://wp.me/pbg0R-5W
     
    Le Meur is someone anyone in social has heard about. Like I said, corruption is everywhere.
     
    As I further consider corruption, I am thinking now that the only way to deal with it is to grant a general amnesty for the past (where no direct physical harm to people was done) and start over with intimidating, severe punishment imposed forward from the restart.
     
     

  • kamichat

    @paulmerrill Hey Paul, thanks for the RT. Also see you are in Littleton. I grew up in Englewood 🙂

  • kamichat

    @RaeganHill thanks for the Rt Reagan

  • kamichat

    @Samjb Thank you, Samra.

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