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Why does Wal-mart continue to flout law?

11-02-2011 08:11 BJT

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.

Editor:Zhang Jianfeng |Source: Global Times

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