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Why does Wal-mart continue to flout law?

(Guangming Daily)

16:32, November 01, 2011

Edited and Translated by People's Daily Online

Beijing, Nov.1 (PD Online) --After being fined and ordered to suspend business for 15 days by the Chongqing Administration for Industry and Commerce, Wal-Mart China's 15 stores in Chongqing started business again under a banner reading "Brand-New Appearance and Wholehearted Service."

Wal-Mart China expressed that operating with credibility and integrity and safeguarding the interests of the customers is an eternal principle and the culture of the company.

After entering the Chinese market, multinational corporations need to make some adjustments according to the specific conditions of different regions, and mistakes in the early stages are understandable. However, Wal-Mart's 13 stores in Chongqing have continued to make the same mistakes, and “inappropriate strategy of localization” is no excuse for their unethical and illegal practices. As habitual violators of laws and regulations, Wal-Mart's Chongqing stores have not made efforts to increase the quality of their service or products after receiving punishments.

Wal-Mart is not the only multinational corporation suffering a trust crisis in China. Another retail giant Carrefour has recently been embroiled in a series of scandals, such as illegally charging local brands additional fees, selling expired food and falsely accusing an elderly customer of stealing. Certain people said that Wal-Mart China and Carrefour China have become habitual offenders. In fact, fast-food giants Kentucky and McDonald's also have long dirty records in China.

Multinational corporations have abundant capital, advanced management systems and good brand reputations. Therefore, they should be lead the way in showing how to run businesses honestly and sincerely. However, the recent food safety incidents have made the public aware that mere self-control cannot prevent famous enterprises from violating laws and regulations. The desire for more profits always drives companies to keep approaching the lowest regulatory limit, which means lowest standards, lowest costs and highest profits.

Food safety is crucial to people's health, but in the eyes of certain companies, it is just business. The profits they reap from violating laws and regulations are much more than fines and compensation claims. If they reap millions of yuan in profits by violating rules, but are only fined 100,000 yuan, greed will naturally grow and eventually become unstoppable. Due to the extremely low costs of violating laws and regulations in China, multinational corporations simply cannot resist the temptation to reap easy profits.

Comforting companies that violate laws and regulations after punishing them will only make them greedier and eventually ruin an industry's reputation, instead of deterring them from violating rules again.

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Leave your comment5 comments

  1. Name

Jean-Francois Morf at 2011-11-0281.13.255.*
Wal-mart and wall-street: always dishonest, never learn from the past!
helen at 2011-11-02141.0.9.*
US multinationals have a habit of flouting with local laws wherever they may be. This is an extension of US politics. Unfortunately, they get away with it in many small helpless sovereign nations.In China, many of these multinationals are testing and pushing their luck. It is up to the Chinese government to put a stop to these practices and ensure that Chinese laws are adhered to and that the welfare of the Chinese people are protected.
Nancy at 2011-11-0258.210.253.*
self-control? a ridiculous controlling way. The only way to keep them legal is to punish seriously if they violate the law and discard people's life.
Observer at 2011-11-02203.177.74.*
I am sure that if you take a look at the name of who is running this Wal-Mart, you will find a Chinese name instead of an American name. Do not blame Wal-Mart, blame the Chinese person in charge. Quite an ethnocentric article.
Canada at 2011-11-0170.36.49.*
The article is exactly correct. I refuse to shop at Wal-Mart because it is so anti-union that in the U.S. & Canada it closes any stores where the workforce has signed up to join a union. It is also disliked by small business owners because it goes into smaller communities, & cuts its prices to put smaller stores out of business. It’s known to have “price leaders”, that is advertised prices that are lower for some items, & prominent store items displaying much lower prices than elsewhere, so people assume all their prices are lower, however some people have compared and said prices on other items are often comparable to other stores. Yes, a low fine would simply be the cost of doing business as they want to. Canada’s right wing government is in favour of deregulation & letting business set the rules. More and more food items are now sold with expired dates, some items have no date, or it is in a code known only to the manufacturer. There is food inflation here. One of the hidden ways prices are increased is making the cans & packages slightly smaller. The label is identical to the previous larger sizes so people are unaware of the price increase. I hope China cracks down hard on violators & gives them lots of bad publicity when they violate the rules.

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