Matthew Waller, dean emeritus for the Sam M. Walton College of Business, and Adam Stoverink, executive director of the Walton MBA programs, are co-teaching Leadership & Organizational Behavior this fall to Walton full-time MBA and Walton Executive MBA students. The class explores Walmart as a semester-long case study, bringing leadership theories and principles to life through compelling examples and executive guest speakers.
This week in our MBA Leadership course, we explored one of the most pressing questions for leaders today: How do we make sound ethical decisions when faced with dilemmas that are not “right versus wrong” but “right versus right”?
Unlike personality traits, which remain relatively fixed, values can evolve. Leaders must periodically reflect on their own values and how those values influence their choices in complex situations.
Ethical Leadership in Practice: A Classroom Lens
This week we discussed situations like the following: Imagine you are a senior manager on the verge of closing a major contract. Then you discover that a key salesperson exaggerated your product’s capabilities to get the client to this point. If you correct the misrepresentation, you risk losing the deal and demoralizing your team. If you stay silent, the company wins the contract, although the win is based on deceit. What do you do?
We also considered even more challenging scenarios where there is no simple answer. Leaders benefit from frameworks to structure their thinking.
- Ends-Based Reasoning: Focus on outcomes. Which decision creates the greatest good for the greatest number?
- Rule-Based Reasoning: Focus on principles. What rules, values, or moral duties apply regardless of the outcome?
- Care-Based Reasoning: Focus on relationships and compassion. What action best demonstrates compassion and care?
These three perspectives, when considered together, help leaders avoid simplistic solutions. They complement decision-making frameworks like WRAP and provide a toolkit for navigating “right versus right” dilemmas.
Our lessons connected these frameworks to classic studies:
- Stanford Prison Experiment (Zimbardo) showed how ordinary students, when given unchecked power as “guards,” quickly adopted abusive behavior, revealing how environments can override individual values.
- Milgram’s obedience studies demonstrated that people, under pressure from authority, would follow orders to administer (what they believed to be) painful shocks, even when it conflicted with their conscience.
- Moral disengagement and moral licensing illustrate how leaders justify unethical acts by reframing or excusing them.
These insights remind us that leaders must remain vigilant both about external pressures and about the internal rationalizations that can make unethical behavior seem acceptable.
Our discussion drew from three Harvard Business Review classics:
- The Parable of the Sadhu: A group of climbers encounters a dying pilgrim in the Himalayas. Each does a little to help, and no one assumes full responsibility. The story illustrates how groups without shared values or processes often allow responsibility to dissipate.
- Ethical Breakdowns: Bazerman and Tenbrunsel identify five common traps: ill-conceived goals, motivated blindness, indirect blindness, slippery slopes, and overvaluing outcomes. Each trap explains how ethical fading can cause moral dimensions to disappear from decision-making.
- The Discipline of Building Character: Badaracco shows how character is forged in defining moments when managers must choose between competing “rights.” These choices reveal, test, and shape both personal integrity and organizational culture.
These readings emphasize that ethical leadership is about recognizing dilemmas, reflecting deeply, and choosing authentically.
Guest Speaker: Maren Waggoner, Walmart
We welcomed Maren Dollwet Waggoner, Ph.D., Senior Vice President and Chief People Officer Digital and Associate Experience at Walmart.
Maren emphasized that Walmart grounds its leadership in four core values and a clear purpose statement. She noted that values on paper are not sufficient, and leaders must communicate them consistently so that associates understand how to apply them in daily decisions. The values include, service to the customer, respect for the individual, strive for excellence and act with integrity. Walmart is a people-led, tech powered omnichannel retailer dedicated to helping people save money and live better.
She also stressed the importance of Walmart’s Code of Conduct. It serves as a living guide that helps associates navigate both obvious “right versus wrong” issues and complex “right versus right” dilemmas. Regular training and refreshers keep the code active and practical.
We also talked about the new campus where buildings are named Sam Walton Hall, Cheer, Ol' Roy, Sparky, Trust, Maverick, Upstream, Purpose, Always, Together, Change etc. (If these names don't make sense to you, read Made in America by Sam Walton.) Naming buildings this way turns abstract values into landmarks. They become part of everyday conversation (“Let’s meet in Trust building”) or wayfinding, which increases visibility of values. They also serve to remind, reaffirm, and align behavior: the performance expectations are tied to these names. For example, “Purpose” building suggests people coming there are expected to act purposefully, aligned to cause, not just tasks. Core values “respect, service, excellence, integrity” are reflected in the Home Office street names as a daily reminder for associates.
Just as The Discipline of Building Character argues, Walmart is using more than just training and messaging. Through visible, constant, everyday signals such as the names of buildings, streets, gathering spaces, Walmart is structuring its environment so that defining moments are embedded in where people work, meet, and move. These names help make purpose and integrity built into the campus itself.
Ethical leadership requires alignment between personal values and organizational frameworks. Leaders who consistently communicate values, reinforce codes of conduct, and model purpose-driven behavior create cultures where employees are equipped to face dilemmas with integrity.
The journey to unleashing leadership and empowering others is built on a foundation of unwavering integrity, in reflections, in decisions, and in actions.
Her insights echoed our readings:
- Like the Sadhu, Walmart prevents diffusion of responsibility by embedding values and codes into its culture.
- Like Ethical Breakdowns, Walmart addresses blind spots through training and oversight.
- Like The Discipline of Building Character, Walmart equips leaders for defining moments by rooting decision-making in purpose and integrity.
Walmart’s purpose statement begins with “people-led.” Leaders such as Doug McMillon reinforce that technology should be “people-led.” This balance ensures humanity drives decisions. Walmart’s 10-K has ethics and values embedding it into strategy through governance, compliance programs, data responsibility, and human rights commitments.
References
Badaracco, J. L., Jr. (1998). The discipline of building character. Harvard Business Review, 76(2), 115–122
Bazerman, M. H., & Tenbrunsel, A. E. (2011). Ethical breakdowns: Good people often let bad things happen. Why? Harvard Business Review, 89(4), 58–65
Heath, C., & Heath, D. (2013). Decisive: How to make better choices in life and work. Crown Business.
McCoy, B. H. (1997). The parable of the sadhu. Harvard Business Review, 75(3), 54–64
Milgram, S. (1963). Behavioral study of obedience. Journal of Abnormal and Social Psychology, 67(4), 371–378. https://doi.org/10.1037/h0040525
Zimbardo, P. G. (1973). On the ethics of intervention in human psychological research: With special reference to the Stanford prison experiment. Cognition, 2(2), 243–256. https://doi.org/10.1016/0010-0277(72)90014-5
