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Wal-mart immediately implemented Wal-Mart's Katrina Aid as emergency operations after Hurricane Katrina hit the coast of Louisiana on August 29, 2005. This is to help its employees and the community to overcome the impact of the disaster.
Daniel Diermeier; Robert J. Crawford; Charlotte Snyder
Harvard Business Review (KEL556-PDF-ENG)
October 01, 2011
Case questions answered:
- Hours before Hurricane Katrina struck the Gulf coast in 2005, Walmart CEO Lee Scott issued the following instructions: “This company will respond to the level of this disaster. A lot of you are going to have to make decisions above your level. Make the best decision that you have with the information that’s available to you at the time, and, above all, do the right thing.” Does Wal-Mart's Katrina Aid support Steven Horwitz’s claim that private enterprise is superior to governmental action in responding to natural disasters. Remember: justify your claims with reasons.
- In what fundamental way does the virtue ethics test differ from the generalization and utilitarian tests? How does appeal to virtue involve purposes and the concept of integrity?
- Does Walmart’s bribery cover-up pass Hooker’s generalization, utilitarian and virtue tests? How could the same company that responded to Katrina (see the previous question) cover-up violations of US and Mexican law?
- Why, according to Hooker, does reason require that we choose the action that maximizes total net utility? (You may wish to discuss some of the difficulties in applying the utilitarian test that Hooker mentions.)
- Do you agree with Hooker that Jennifer’s choice to break her agreement passes the utilitarian test? Is it a strength or a weakness of the utilitarian test that applying it does not always lead to the same moral evaluation of action as applying the generalization test does?
- Post a link to a current news report that raises a business-related ethical issue. Identify the issue and analyze its implications for shareholders, managers, employees, and customers. Distinguish between legal and ethical implications. Or comment on an issue that another contributor has posted.
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Wal-Mart's Katrina Aid Case Answers
1. Hours before Hurricane Katrina struck the Gulf coast in 2005, Wal-mart CEO Lee Scott issued the following instructions: “This company will respond to the level of this disaster. A lot of you are going to have to make decisions above your level. Make the best decision that you have with the information that’s available to you at the time, and, above all, do the right thing.” Does Wal-Mart’s Katrina Aid support Steven Horwitz’s claim that private enterprise is superior to governmental action in responding to natural disasters?
It is true and I agree with the statement of Horwitz that the private sector is superior to government action when it comes to the quick and effective response to natural disasters. Because of their size and location as compared to other government organizations, with their policies and strategies. private organizations are normally within the surrounding of the community and in case of such disasters, they react faster and fulfill the needs of the community. This can be seen from Wal-Mart’s quick and effective response to the storm by the implementation of Wal-Mart’s Katrina Aid.
Walmart came to the New Orleans area before FEMA and provided for the needs of the community. The only lifeline for the New Orleans was the Walmart stores. The Mayor of the New Orleans suburb of Kenner, Mr. Phillip Capitano stated that Wal-Mart came with food and water to enable the victims of Katrina to survive.
Additionally, the logistics of Wal-Mart is outstanding. The company moved emergency supplies like dry ice, bottled water, generators, etc. from their warehouse locations to the various areas in New Orleans in a very short time.
FEMA, on the other hand, was more focused on the coordination aspect. It is also important to note that Walmart has stores across the country in small and big towns. Because of their decentralization, they were able to send supplies to communities around the disaster areas. Their employees are normally from the local areas and understand the local routes.
FEMA, however, does not have offices in small towns and suburbs and employees are more likely to be based in Washington or state capital. As a result, they do not have local knowledge of the community around them. The failure of FEMA resulted from a lack of expertise and resources.
But Wal-Mart responded much quickly and effectively. Their success shows their advantage over the public sector with regard to disaster management. Their quick action and flexibility towards Katrina is proof that the private sector is still more superior as compared to government agencies.
2. In what fundamental way does the virtue ethics test differ from the generalization and utilitarian tests? How does appeal to virtue involve purposes and the concept of integrity?
The concept behind the virtue ethics focuses on what other people should choose for their personal inward behavior instead of one depending entirely on the external rules and cultural customs. If one’s character is good, his/her choices and action would be…
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