It's tempting to shrug off the report that Walmart illegally bribed government officials abroad in order to open new stores as yet another scandal around a company with a rapacious reputation.
U.S. companies are bound by the Foreign Corrupt Practices Act, which makes it illegal to bribe foreign officials. That law originated partly in response to the 1970s scandal where Lockheed bribed Japanese officials in order to sell its L-1011 aircraft. As in that case, it looks like executives at Walmart tried to cover up $24 million in bribes to Mexican officials in order to thwart competition.
But it's a lot more complex than that to me personally. I started my career at Panasonic, working with Japanese colleagues who did business every day in Indonesia, Tanzania, Peru and other places where there were plenty of temptations to fudge the rules. As a reporter, I wrote about Weyerhaeuser's operations in Uruguay, where it competed with less scrupulous rivals. For the right price, it's easy for officials to ignore safety warnings on pesticides or look the other way at labor violations.
Now as a communicator I see this sort of thing as a new challenge. So far, two issues seem most interesting:
- Walmart's wicked problem. How do you grow when you're already the world's largest retailer? Assuming illegal activity isn't an option, satisfying conflicting stakeholders is a dilemma where every move has drawbacks. (For more, see the classic 2008 article in Harvard Business Review.) Apple faces similar challenges balancing most-valuable-company status with demands to treat workers better.
- Dealing with Mexico. This scandal is proof that we need to change the way we look at our neighbor. Obviously we can't complain about corruption and then contribute to it. If we ever want to solve immigration, resource problems and transborder crime then Mexico needs stronger rule of law and the financial means to provide education and infrastructure.
Classic crisis communications methodology says Walmart should follow a simple strategy to deal with this mess: 1) get the facts out, 2) focus on the business and reassure everyone that the damage is limited, 3) isolate the problem and act convincingly (eg, executives leave, consumers are compensated) so things die down. Walmart knew the New York Times story was coming for months so their plan should be well rehearsed. We'll see if it works.