Corporations and institutions with relative high visibility have a lot to lose when internal misconduct is exposed. If you are an institution, such as a school, prison, or government body, internal misconduct can strongly shake the public’s confidence in how that misconduct will impact the groups and communities being served. Embarrassing, pervasive issues, such as a business party culture, can really drive down faith in your brand. If you’re a large corporate chain, such as Walmart, or McDonald’s, your corporate culture is subject to criticism from current/past employees, with heavy emphasis on how that corporate culture effects both productivity and the workforce.
Just one week after ringing in the new year, McDonald’s current CEO, Chris Kempczinski, has announced that he plans to bring an end to the business party culture embroiled in their corporate atmosphere. According to The Wall Street Journal, Kempczinski, “…is seeking to restore a more professional culture at McDonald’s after what some current and former employees described as an environment influenced by his predecessor’s late-night socializing with some executives and staffers at bars and flirtations with female employees…” This business party culture was pervasive. His predecessor, Steve Eastbrook, was terminated in November of 2019 after he confessed to having a relationship with an employee. What is particularly problematic about these circumstances is that healthy corporate culture begins with leadership. When leadership behaves ethically within the organization, employees are more likely to follow that example. When executives, managers, and supervisors are not held accountable for bad behavior, it sends a message to the rest of the organization that poisons the well of corporate culture.
But inappropriate personal conduct is not the only challenge
currently facing McDonald’s culture. Strains imposed by the franchises’
renovation program has franchisees challenging their relationship with the
corporation. In addition, unions are still reeling from a decision handed down
by a national union-organizing supervision board, which states that the
corporation will no longer be liable for labor violations committed by its
franchisees. Labor advocates who made their concerns apparent to the board were
ignored, and the decision came down with a 2-1 vote. In the background,
employees continue their cause of “Fight For 15,” in reference to their desire
to have McDonald’s starting wage raised to $15 per hour.
Kempczinski’s promise to diffuse a business party culture within the corporation is a promising start—however, in order to make meaningful changes to the corporation, there needs to be a top-to-bottom evaluation of internal processes, and of the behavior exhibited by leadership—both in the public view and behind closed doors. That is why so many institutions and corporations are subjecting their internal operations to a corporate culture audit to ensure that they won’t be caught unawares about the debilitating, pervasive issues within their organization. Regardless of quality, corporate culture moves in a cycle. The actions of leadership filter down through the workforce, influencing productivity and engagement from employees. Employees either contribute positively or negatively to the corporation as a result of that leadership, and that leads directly back to leadership in a supervisory capacity. For the sake of a long-beloved American corporation, let’s hope that Kempczinski follows through on his promise for change.
With retailers like Walmart, Kroger, and Amazon at the forefront of consumer watchdogs, the conversation around corporate culture and how it affects business continues to become inwardly focused. The nature of capitalism and supply-and-demand business models sometimes stand in the way of true reform when it comes to some of the nation’s most profitable corporations. Despite major retailers like Walmart and Kroger vowing to improve culture in several arenas of their business, the actual enforcement of these new “policies” has employees feeling lukewarm.
Walmart has recently been at the forefront of several different types of corporate crisis. Most notably, the tragic active shooter event at a Walmart in El Paso, Texas that killed 20 people and left dozens more injured. This horrible event is an example of a contextual corporate crisis, in which external events directly affect the public’s perception of the company. While contextual corporate crises typically have little to do with internal operations, the ever-growing epidemic of gun violence in the United States has CEOs and leadership of large retailers like Walmart rethinking their strategies. Since the shootings, Walmart CEO and President, Doug McMillon has announced the retailer will now discontinue sales of ammunition in their stores for handguns and military-style firearms like AR-15s. More notably, McMillion also said the company would “respectfully request that customers no longer openly carry firearms into their stores” with the exception of law enforcement. For many in the nation, “respectfully requesting” customers not openly carry in their stores is not enough, but it is symptomatic of changes in a capitalist society.
Following the tragedy at El Paso, eight more stores received threats of varying specificity. In the wake of the statement by McMillion, gun rights activists are already reporting individual stores are not enforcing their “respectful request” to not openly carry in their stores. David Amad, the vice president of Open Carry Texas, has reported members of the organization had openly carried in their local Walmart and not a single member was asked to leave, despite their visible firearm. When asked about it, Amad was quoted as saying, “They’re ducking the issue. They are trying to get the gun haters to leave them alone, while at the same time leave us alone when we carry in their stores.”
When it comes to improving the culture and perception of a company in the public eye, there can be no room for soft enforcement of policy. Revised, enforced policies are how companies improve their culture, and no one knows that better than the employees who are seeing internal operations every day. According to the New York Times, “Walmart employees are instructed not to obstruct peaceful shoppers from openly carrying guns in the stores…But if an employee or customer feels unsafe, the store workers should call law enforcement.”
What we know about the cycle of good corporate culture indicates that when employees feel valued, they remain engaged in operations and contribute to the overall improved health of the company. It is not a leap at all to assume employees who do not feel safe in the workplace do not maintain high engagement in daily operations. This is a corporation that is already the subject of gratuitous coverage involving internal issues, such as compensation, work conditions, and how toxic corporate culture continues to pervade within the organization. Now the soft enforcement of no open-carrying in Walmart stores may cause employees to further lose hope that the retail giant will ever make meaningful changes within the organization. Research has shown, as the workforce continues to age, corporations will have no choice but to improve their corporate culture, or risk a consistent pattern of turnover and decline in profits. Glassdoor reported millennials are the largest generation within the workforce currently, and they are the prospective employees who will make unprecedented choices in their employment, favoring healthy corporate culture over high rates of compensation. If corporations wish to retain otherwise dedicated employees for the continued growth of their organization, they’re level of integrity in changing their corporation’s culture must have a stronger resolve.
