The Core Issue Of Wal Mart De Mexico Essay

The Core Issue Of Wal Mart De Mexico Essay

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1. Summarize and discuss the core issue in the case. Do not repeat the entire case details but only pertinent information at the heart of the case.
The core issue in this case is about how Wal-Mart de Mexico covered a vast bribery orchestrated by government officials, authorities, and executives from Mexico. Wal-mart de Mexico perfected the art of bribery by using fraudulent accounting and building stores so fast by getting zoning maps changed and making environmental objections disappear. Wal-mart de Mexico’s executives bribed government officials to aid in getting permits faster, since this is a process that typically takes months to complete. However, the company’s executives managed to get them materialized in days. Bribes were also managed through fixers, known as “gestores.” Usually, companies hire gestores as quasi-lobbyists to help get things done fast and easy. In this case, Wal-mart de Mexico’s gestores submitted invoices with their services. Their invoices were written in codes, with indications of bribes to speed up permits, bribes to obtain confidential information or to eliminate fines. Every month, Wal-Mart de Mexico executives received a detailed schedule of the payments performed. These payments, however, were then “purified” in accounting records as simple legal fees. These were basically Mr. Cicero’s allegations. However, this was not the first indication of corruption in Wal-Mart de Mexico. In an investigation in 2003, it was found that Wal-Mart de Mexico had systematically increased sales by aiding favored high-volume customers avoid sales taxes. Wal-Mart de Mexico had failed to enforce their own anticorruption policies. As the investigation from Mr. Cicero’s allegations moved forward, there was corroborati...

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.... As Wal-Mart is the best retail company, it has great strength and would take a lot to weaken its financial position. Unethically, the case was handled in a way it did not affect its financial position. On the contrary, it helped them strengthen their financial position.

7. Going forward, does the scandal affect Wal-Mart’s international operations in both developed and emerging countries? If so, how?
I do not think the scandal affects Wal-Mart’s international operations in developed and emerging countries. Wal-Mart was able to enter Mexico’s market. Corruption and bribery is common in the Mexican culture, since many believe it is a fast way of getting things done. In order for a company like Wal-Mart to enter into new markets internationally, culture and other factors are studied. It is a retailer that provides consumers in what they want and will continue to do.

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