“Are global corporation cleaning up their supply chain? Trying to answer heat question is like wrestling an octopus into a shoebox: no matter how hard you try, something dangles out somewhere.” Discuss John Entine, Ethical Corporation, March 2012
A Critical Analysis
Supply chain is a process that has been conventionally viewed where raw materials are converted into final products and then delivered to the end consumers (Kumar and Chandrakar, 2012). Managing supply chains effectively is an important tool for companies worldwide due to intense global competition, short product life cycles, out-sourcing of various activities to developing nations and time compression in different aspects of supply chain (Skjott-Larsen, Schary, Mikkola and Kotzab, 2007). Therefore, attention has switched from competition between firms to competition between supply chains amongst global corporations (Christopher, 2005). Due to this, it has been noticed that over the last thirty years, global companies have increased their relocation processes from Europe to other developing nations. By doing so, firms reduce their costs and risks of productions especially in sectors like textiles and electronics which are labor intensive in nature (Saage-Maab, 2011). Global corporations face the challenge regarding three issues: how to engage global workforce in adopting its corporate values, how to maintain ethical conduct in all countries of operation and how to make sure that all legal requirements and laws of each country are fulfilled (Stimspon, 2002; Daft, 2010). It was discovered in a study conducted by LRN Ethics and Compliance Risk Management Practices Study that global companies commented that they performed better in headquarters location as compared to the international locations since they rated 7.65 to headquarters and 6.71 for their international operations. Along with that, these global corporations further revealed that they found it difficult to engage all or most of their workforce in ethics and compliance programs (LRN, 2007). A large number of companies in particular global firms have engaged themselves to implement sustainability strategies, environmental annual reports, code of conducts and the environmental targets that they want to accomplish within a particular time period. Despite global organizations efforts to showcase environmental and communal issues in their reports, a gap exists within the desired objectives in theory and the results of implementation by these companies (Bowen,Cousins, Lamming and Faruk, 2001). The core problem underlying this situation is that many global companies have been seen to “walk the talk” of adopting cleaner strategies in supply chains rather than putting the amount of effort that is required in doing so (Anderson and Skjoett-Larsen, 2009). The aim of this report is thus, to analyze why global corporations need to clean their supply chains and how are companies tackling this issue. Discussion
Global corporations need to clean up their supply chains since it has been observed in literature that various stakeholders including consumers, shareholders, trade unions, and employees, international organizations, Government and even non-government organizations are becoming increasingly aware of social and environmental issues that are related to global businesses (Stimpson, 2002). Therefore, a number of concepts which were not known before are receiving improved attention in academics, media and even the corporate world. These concepts include environmental management, supply chain sustainability, corporate greening, social responsibility and green supply in companies supply chains (Dyllic and Hockerts, 2002; Sarkis, 2003; Vachon and Klassen, 2006). This interest has been further triggered by the openness of the organizations regarding their environmental practices which has given a chance to not only scholars to conduct researches but also to the company’s stakeholders to make various...
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Source: Anderson, M., Skjoett-Larsen, (2009). Corporate Social Responsibility in Global Supply Chains, Supply Chain Management: An International Journal, 14(2), pp. 79
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