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Many Flipkart employees and other observers have found Walmart's action confusing.
The surprise resignation of a technology billionaire has induced Indian companies deeper into the #MeToo fire of action that has swept the American business world for more than a year. Walmart Inc. announced Tuesday that Flipkart co-founder Binny Bansal was leaving the company after an independent investigation into allegations of sexual assault. While Bansal denies any wrongdoing and the investigators found no evidence of assault, the process revealed "errors of judgment" that disrupted the leaders of the parent company.
By buying a Flipkart, Walmart has made Bansal a billionaire and a national icon. By forcing his resignation, the company has turned it into an example of the kind of zero-tolerance business policy that was expected in the US, where the #MeToo movement has had dire consequences. for dozens of CEOs and senior executives in the business and finance sector.
Many have been fired, resigned or have been sidelined. US companies have been asked to formulate and, in many cases, strengthen their policies on sexual harassment. Investors have begun to take into account the risk of sexual harassment when allocating capital.
The #MeToo Indian movement exploded this fall and continues to grow. A handful of influential men in the fields of entertainment and government – executives of local units of Dentsu Aegis and Fox Star Studios; a minister, MJ Akbar – have suffered professional consequences. But business leaders have remained largely intact.
Bansal's dismissal by Walmart is significant, said Zoe Kinias, a Singapore-based professor at INSEAD, as it sends a clear signal to the country's leaders: "Actions of this kind have consequences".
"I'm not sure that global companies are managing these situations perfectly, but processes are in place," she added.
Many Flipkart employees and other observers have found Walmart's action confusing. Bansal has denied any sexual assault and the internal investigation of the company has resulted. But the Bentonville executives thought this upset accuser was a business risk and they wanted to know why Bansal did not reveal it. At Flipkart, this information would have been considered personal.
Crop shock is inevitable when one company buys another. But as multinational companies increasingly seek to expand in India – often by taking equity positions in local businesses such as Walmart – Indian companies may be more likely to strengthen their own policies and practices on sexual harassment. inside and outside the country. office.
According to Kannan Ramaswamy, a professor at the Thunderbird School of Global Management at Arizona State University, many Indian companies will have a steep learning curve. He specializes in management strategy in India. "We do not have the mechanisms in place to deal with this problem with haste," he said. "The awareness is not there, the legal infrastructure is not supported and you fight against the weight of tradition and culture."
A former Flipkart employee contacted Walmart executives at the end of July and accused Bansal of sexual assault, according to a knowledgeable person, who asked to remain anonymous because the details are not public. The investigators concluded that Bansal and the woman had a consensual case, people said.
Walmart finalized its $ 16 billion purchase of a controlling stake in the online retailer in August, a transaction that took Bansal's net worth to $ 1 billion. "Although the investigation did not find evidence corroborating the complainant's allegations against Binny, it revealed other errors of judgment, including a lack of transparency about how Binny was reacted to the situation, "said Walmart in a statement, without specifying the nature. allegations.
Walmart's reaction reflected not only the influence of #MeToo in the United States, but also the company's desire to reinforce the impeccable clean image that it cultivates. Until now, he has avoided public accusations of sexist behavior on the part of his managers, although store employees have been accused of harassment by their supervisors over the years. But with few women in management positions and its treatment of core workers, Walmart has also been the target of criticism of unions and activists over the years.
Lately, she has been trying to improve her reputation by investing millions of dollars to increase salaries, increase benefits and create more opportunities for women and minorities, and hire public relations managers with worked for the presidential administrations Clinton and George W. Bush.
The company has also strengthened its ethics and compliance department following a global investigation into allegations of corruption by the retail giant. For six years, US officials have been investigating whether, over the past decade, Walmart has corrupted government officials in countries like Mexico, India, and China to speed up store openings.
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