Shared publicly  - 
 
Walmart's Mexico subsidiary paid $24 million in bribes to local officials to sidestep regulations and obtain construction permits for new stores.

The worst part? The story alleges that then CEO H. Lee Scott and other top executives knew exactly what was going on and tried to hush it up.
76
27
Farhankhan Daya's profile photoAndrew Kovacs's profile photoAntonia Dorantes Lopez's profile photoWendy Presswood's profile photo
52 comments
 
Anyone really surprised? NOT!!!!
 
Does anyone really know about business in Mexico before criticizing these practices? Almost every business I'm aware of has paid bribes to do business in Mexico or risk being shut down with no reason or cause.
 
1 of the many reasons I shop at K-mart & Target
 
If K-Mart and Target are in Mexico, they've paid bribes
 
then I may have to start using local small businesses & avoid the national retailers all together
 
But K-mart and Target haven't been caught yet, so they are unworthy of our attention.
 
agreed, I prefer articles that pull the skeletons of companies like this out of the closet
 
ahhh, ignorance is bliss. Just focus on the ones you hear about and ignore the others, that's the ticket. And besides, these bribes required by corrupt Mexican practices certainly harmed soooo many people in the process!!??
 
not ignorance, just no time to find the needle in the haystick
 
as I said before....can always go with local small businesses and avoid the global companies all together
JD Mo
+
2
3
2
 
I willing to bet every major american company has paid bribes in the third world countries that the have operation in. This news is not even making news in mexico.
 
this is how things done there. unless you pay bribes, the process takes 100x longer
 
It's no real surprise. There are plenty of places in the world where "baksheesh" is normal, and bribery is The Way Business Is Done. If you want to do business there, that's what you do. For an American company who wants to do business there, the choice may resolve to "break American law" or "don't do business there".

America can't impose its idea of right and proper elsewhere, and the issue often comes down to exactly how much clout you have and how badly the locals want to to business with you. A friend works for a big Wall Street financial outfit. They don't pay bribes, but manage because the locals in countries they deal with want access to US financial markets badly enough that they don't insist on the customary bribes and rake-offs. For everyone else, not doing so is probably a deal-breaker.

"OMG! Wal-Mart paid bribes in Mexico! Isn't that terrible?" Only by our standards. A Mexican might just laugh at you for thinking so.
 
Bribes
Corruption
Drug lords
Violence
Kidnaps

Not to bad in my beloved Mexico

But "Wallmart" it's a national treat you should send the us navy to help with Wallmart

:)
 
+Zackery Shoemaker just because others are doing it, doesn't mean you have to do it too.

Depends. Want to do business there? You may have to, because that's the way things are done there.
 
All the more reason to never go there, prod friends and family to never go there, help resist the siting of new stores and always refer to it as "Mall Wart".
 
Just to be clear, Walmart broke US law. They are in trouble with America not Mexico.
 
Isn't this normal overseas business conduct? The oil companies do the same thing. Apple is involved in pretty shady practices. We are supposed to be shocked that Walmart has poor ethics? Walmart has always been shady on many levels.
 
So are they going after Haliburton? Cause you can bet they paid all kinds of bribes to do business in the middle east. Somehow I don't think they will. Go after Walmart and the only people you upset are the poor and working class folks that shop there. Go after Halliburton and their ilk, and you have a bunch of angry rich folks with influence in Washington.
 
I worked at the Walman Marcus home office right after Sam Walton died. The transformation from a decent company to one that convinced its vendors to manufacture overseas and sidestep laws and regulations seemed to happen almost overnight.
 
+Zackery Shoemaker if it's against international business law, it's against the law. Is that hard to understand or something?

The whole world doesn't abide by international business law, and we can't force it to do so. Prohiibitions against bribery are our notions, and that behavior is not acceptable here. Go elsewhere in the world, and that changes.

You are effectively demanding that US companies simply don't attempt to do business in places where bribes are required to do so. Expect other places around the world where bribery is standard practice to be outraged at America attempting to impose its standards on them. It's simply the way things are done there, and they don't have a problem with it. Expect people who recognize that standards are not universal to point at you and laugh for expecting the impossible.
 
Nothing gets built in mexico without bribes. It's a requirement, not a crime.
 
This article is inciteful and defamatory. The author of the article and +TIME should be ashamed. +TIME has officially become a tabloid.
 
Not following you there, Karl. How is this tabloid? Shining a light on business practices, both here and abroad, by major global corporations seems like a legitimate pursuit for a "real news" organization. I can't figure out who has been "defamed" by this. Walmart? Mexico? And what is it inciting us to? Boycotting Walmart? Get in line, I know lots of folks (some in this discussion) who already refuse to shop there, for one reason or another. Please, set me straight on this...
 
+Zackery Shoemaker go read my comment, I didn't provide any justification rather a comment to the person saying that it's ok to shop with the people that haven't been caught yet. But thanks for taking the moral high road.
 
Don't see this having any long term impact on WMT. As long as they keep their low prices the overwhelming majority of their customers could not care less. My 2¢
 
When Mexicans hear about this..."eh, must be a Tuesday"
 
+Sean Gustafson As long as they keep their low prices the overwhelming majority of their customers could not care less.

And that is precisely the underlying issue. It's popular to talk about corporate greed on the part of outfits like Walmart. It's less popular to talk about the other side of the coin, consumer greed.

We live in a competitive economy. We're all in favor of competition when it benefits us, in terms of greater choice and lower prices. We're less pleased when we have to compete.

Walmart is a discount retailer, selling fungible products. It's the same product no matter where you buy it, so competition is principally on price. Walmart is competing with discount retailers like Target and warehouse stores like CostCo and Sam's Club, and everybody is competing with Amazon.

Retailing is a low-margin business, where you make pennies on the dollar. The measuring sticks aren't profit margins, they're inventory turns and Return on Assets. Because margins are paper thin, there is pressure to take in as many dollars as possible to make pennies on, and constant pressure to reduce costs to be able to offer lower prices. Pressure to take in as many dollars as possible leads to expansion into new markets, including overseas.

This has inevitable results and the process has been going on for decades. One result is that retailing has consolidated, because smaller retailers can't get the economies of scale the big boys have. Another result is that a lot of manufacturing has migrated offshore, simply because it can be done cheaper elsewhere. A third is that huge retailers like Walmart will place immense pressure on suppliers to lower costs. If Walmart tells a supplier "We will not pay more than X per unit of what you sell us", they don't have to tell the supplier "manufacture offshore." Moving manufacturing offshore may be the only way the supplier can meet Walmart's price demands and still make money and stay in business. And not dealing with Walmart may not be an option - Walmart is too large a percentage of the supplier's sales to drop them as a vendor. That would simply be another way of going belly up.

Why is Walmart making those pricing demands on its suppliers? Because we want our goods cheap, and Walmart is competing on price. We all like the idea of something for nothing, or at least really cheap, and the web has spawned scores of ways we can comparison shop and identify the lowest price. Wanting something for nothing or really cheap is greed, just like wanting to make the most profit possible.

The alternative to what Walmart and others do is simply paying more - perhaps a lot more - for what we get. How happy will folks be with that notion?

When we complain about stuff like this and ask why it occurs, we have to start by looking in a mirror.
 
At some point stereotypes are factual, but at what level?
.
Company Employees.
State Official.
City Official.
Finance Officer.
Mexican.
Human.
 
+Dennis McCunney there's even 1 more side to the coin. I'd be willing to bet a majority of their business is supported by consumers who can't afford to shop somewhere else. A lot of effort by the corporate greed is also to keep the wage gap larger, and thus ensure they keep their consumer base.

Just think of all the people who work 3 jobs just to feed their kids, trying to be good parents. They can't afford to be activists and deal with the politics. For those of us who can afford it, I hope they all agree with you.
 
everybody is doing it, is only when you are caught that you are a thief.
 
+Glenn Sidney I don't have numbers at hand, but I don't think supported by consumers who can't afford to shop somewhere else comprises the majority of their business. There are indeed many folks like that, but Walmart prospers on more then them. I think of the department store I encountered back when who recognized reality, and their marketing was essentially "Go to the discount retailer to buy your kid's underwear. Come here to get your daughter's prom dress." The money saved buying commodities cheap at Walmart gets applied to higher end purchases elsewhere.

And corporate greed really isn't about keeping the wage gap large. Think about it - if you're a corporation, which would you rather have? A wage gap that guarantees you a market because people can only afford to shop at your outlets, or an economy where every has enough money to afford to go elsewhere, and they can spend even more of it shopping with you?

I know which way I'd jump.
 
Dennis Mccunnery when you are judge by the quarter of the year, and any misstep can cost you your job you always go for the radical solution. (peny wise but pound folish)
 
Have you ever been to Mexico? That's just life there. I've never lived there personally, but worked with a Mexican daily for a year. He told me all about how it goes down there, and this is just the price of doing business there. It's not America, or even Europe. It's Mexico.
 
In business Dennis when two vendors go to shop and one can afford to buy 10 pallets and the other 1000 pallets who wins? Wal Mart has constantly pushed out smaller Mom and Pop businesses, had their lawyers use the eminent domain law to have areas rezoned. The buyers from wal mart rarely do any quality control checks on any products ( thats left up to seller) and as always you buy cheap you get cheap. If I had money to go elsewhere and shop then wal mart is one place I would not go.
 
After working for them for eight years YES I DO BELIEVE THAT IS RIGHT !!!!
 
+Glenn Sidney Wall-Mart does not have the best prices here at Mexico and people who are on a budget often shop at local markets.
 
soon to be renamed to wal*dsteinfeld*mart?... then it'll be a good ethical corporation... =s
 
+Enrique Hernandez when you are judge by the quarter of the year, and any misstep can cost you your job you always go for the radical solution. (peny wise but pound folish)

Oh, true enough. Short term thinking where all eyes are focused on the next quarter is a major problem, and hardly unique to Walmart.
 
+milton bonet I don't shop at Walmart either. They are trying to open a store in NYC, but have interesting questions is where they will put it. Underlying land values are such that the only way I see it happening is air rights over something like a railroad yard. There simply isn't any open land in NYC proper suitable to accomodate a Walmart super center. They also face competition from existing Target, CostCo, BJ's and Sam's Club installations just outside NYC.

But I'm not attempting to defend Walmart: simply explaining the circumstances that produced them. If Sam Walton had never existed, something like Walmart is likely to have emerged anyway for the reasons I've mentioned.
 
Big retail store doesn't focus on customer happiness
 
I don't understand how this is news. Most of the developing world works like this. You can't do anything without bribes. Small business owners do this too, so it isn't just corporations.
 
that is a load of crap Andrew, as the senior Chief Engineer of my company when I have a project handed to me (usually 1 to 2 years out) the time span was placed into it and factored for the sake of the payoffs which had to be given. This also throws ones budget into limbo, and this goes into even the delivery drivers. I once had a project shut down by a group of Muslims because they felt they wanted to have 100% of the work force on the project. The only problem was they had no skilled laborers in the group. Of course the only one who benefited was the leader who was paid off and the poof !!!! they were all gone?? total cost over run? 6.5 million
 
+Andrew Kovacs It's considered abnormal in China/India/Africa to actually set up a business the proper way.

"Normal" is what the society in question thinks it is. In China/India/Africa, "the proper way" is abnormal, because our idea of proper isn't how they do things.

A friend in the UK used to be involved in international education, and said "Don't get me started on the Chinese..." You not only had to know whose palms to grease and how much grease was needed - you also had to be aware of the correct order in which palms had to be greased, based in local Chinese notions of rank and status. Getting the order wrong could be just as deadly as failing to do it at all.
Translate
Add a comment...