Case Study Questions--norway Sell Walmart.docx

CASE STUDY QUESTION 1：What are the potential ramifications of the Norwegian Fund’s sale of Wal-Mart stock?

Please consider the perspectives of all Wal-Mart

stakeholders. After being expelled by the Norwegian Pension Funds, the global stock market must react to this big movement, the stock price of Wal-Mart may experience a plummet, which may bring immeasurable negative impact to the company, the stockholders of Wal-Mart may start to dump the stock, which may eventually lead to operation cash-flow deficiency，thereby put the stakeholders of Wal-Mart at risk, they may face huge financial burden for this.

2： Was the sale of Wal-Mart stock consistent with the ethical and economic mandates of the Norwegian Fund? What other courses of action could have been pursued by the Ethics Council or the Minister of Finance? The sale of Wal-Mart was consistent with the ethical and economic mandates of Norwegian Fund, Ministry of finance proposed two ethical obligations for the fund that are to generate high financial return and also

to avoid those investments that have a substantial involvement in unethical actions. Moreover, The ethical guidelines focus on the exercise of shareholder ownership right. Although the companies convicted of unethical practices will face hard financial consequences but this will also force them to adopt ethical practices to get reinstated in one the largest government investments of the world. As Wal-Mart violated the rules and set an bad example for other companies, the Council did the right thing. By exercising these guidelines moral rights are also protected. As the companies violating moral rights are excluded from the fund so protection of moral rights are forced on the companies by negating their unethical practices and forcing them to adopt moral standards.

3：How should Ray Bracy respond to the Norwegian Fund’s sale of Wal-Mart stock?

Please develop a detailed plan involving internal and external

actions by Wal-Mart. The first thing CEO of Wal-Mart has to do is to determine the elements that hurdles the council to contact with Wal-Mart and discuss the issue. The CEO should contact the Ethical Council and has an investigation of the allegations. Also the managers should make sure that Wal-Mart practices

are according to the ethical guidelines of the funds to get it reinstated in pension funds. Wal-Mart should also establish a department that responsible of maintaining relations with the investors. The department should make sure that Wal-Mart is fulfilling all the criteria required standardized by their investors. The department should also guide the investors about Wal-Mart’s ethical initiatives. The department should also address truthfully about allegations on Wal-Mart and what polices they are undertaking to address those allegations. Wal-Mart should publically publish report highlighting its ethical initiative and social responsibility. Wal-Mart should also allow third parties to monitored ethics of its operations and publish reports.

4：What economic and regulatory issues are raised by the growth of sovereign wealth funds? Is the Norwegian Fund a good model for other sovereign wealth funds? The ethical and economic principles of protection of human rights, environmental protection as well as ownership right protection of the share holder is in the larger benefit of the Norwegian people as well as the rest of the world. The proposed ethical guidelines of Norwegian Pension funds

were correct as there guidelines produce maximum benefits from the moral values that is the values is greater if everyone is to follow them. The Norwegian Fund is a good model for other wealth funds. Distributive and retributive justice is also followed by these guidelines. Undoubtedly these guidelines are very beneficial from ethical point of view as they are pursuing an effort to urge companies for follow ethical standard to protect moral rights of human beings and also to preserve the environment for future generations