Ethics for Individual Learning

Paul Sunny

G11093

TABLE OF CONTENTS
a. Objective

..3
b. Ethics in Supply Chain

Management.... ..3
I.

II. III. IV. V.

Ethics in SCM ...3 Building an Ethical Supply chain......4 The Ethical Supply chain Is it viable?...................................................................4 Reducing Environmental Risk through SPM.4 Buying your way out of climate change: What does Carbon offsetting really achieve? 5

c. Ethics in Retailing

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I. II.

III. IV. V.

Retail Ethics and Green Retailing 6 Ethics in Organic Retailing 6 Ethics in Retailing: perceptions of management and sales personnel..7 Retail Ethics: An Exploratory Examination of Consumer Perceptions8 Retail Ethics and Green Retailing 2011: More than plastic bags?.........................8

d. References

..9

Objective
The objective of this paper to understand how ethics can be applied to the following industries Supply Chain Management Retailing

Ethics in Supply Chain Management

The following section will review five literatures published in various publications pertaining to how ethics can be applied to the Supply Chain Management. Ethics in SCM
By Abedullah Zama

Companies can use the supply chain to deliver products and services by minimizing the cost but also to nurture long term relationships with its stakeholders. Reasons behind the societal concerns about SCM Environmental effects The mismanagement of the SCM can have detrimental effects on the environment such as pollution and natural resource depletion. Health and safety 4

Usage of pesticides, hormone treated edibles can cause health related issues for it users . Consumer rights Legislations about right to safety, right to choose, right to be heard. Examples of ethical supply chain management Marks & Spencer: Ethical concerns about child labour, prison labour, discrimination and terms and condition of work environment. Nike: Code of Conduct- Improve working conditions in factories. Reebok: Sourcing Procedure- Supplier list based on Fair Factories Clearing House evaluation GAP: Apparel Outsourcing- Social Responsibility

Addressing issues in Supply Chain Role of Certifications: WRAP (World Responsible Accredited Production) Apparel certification Other Regulations: International Labour Organization (ILO) Conventions and United Nations (UN) Universal Declaration of Human Rights regulations Building an Ethical Supply Chain
By Michael R. Levin

The paper narrates about necessity of having a credible Supplier Ethics Management (SEM) initiative. Supplier Ethics Management is the management of suppliers and supply relationships with strategies, programs, and metrics that better align supplier business conduct with purchaser standards, with the goal of reducing the purchasers overall risk of corporate integrity failure in the supply chain. Various surveys done for companies in Global 2000 points to the fact that most of them do not consider suppliers while assessing companys own ethical and compliance risks. Companies cite three reasons for their inaction in SEM; insufficient time, inadequate budget and insufficient administrative resources. Having a web based SEM platform will help the companies to perform risk management functions such as distributing a companys code of conduct and regular updates to its suppliers documenting supplier receipt of these requirements 5

facilitating two-way communication between a company and it suppliers, on mission-critical topics relating to matters of ethics and compliance

The Ethical Supply Chain Is it Viable?

By Dr. Alan Knight, OBE

The paper tries to define what is ethical in order to determine whether it is viable within the supply chain. The author argues that there is no universal ethical standard and, while the language of human rights allows for some absolutes, when this is taken into the complex and hugely subjective areas of production, labour and the environment, it is very difficult, and perhaps even unethical, to rely on a single code of ethical standard. An ethical supply chain must not only consider the present-day issue, but think about how, in the future, it can deliver the same financial rewards while using far less resources. The most ethical approach is for retailers to use their influence and knowledge to drive their supply chains down a route of continuous improvement. Reducing Environmental Risk through SPM
By Philip McVeigh page no: 21 Supply Chain September/October 2008 (www.scemagazine.com)

This paper highlights how Supplier Performance Management (SPM) approaches can identify and control environmental and social impacts. All companies have some social and environmental impact on the world so formal measurement and management of the environmental results of these actions is paramount in achieving a socially responsible supply chain. A companys competitiveness is becoming increasingly dependent on successful collaboration with its suppliers. By providing a holistic understanding of a companys supply chain, SPM can identify the impacts the company has throughout the entire procurement process to the point of sale Key Performance Indicators (KPIs) assist the measurement of suppliers across Health, Safety, Social and Environmental (HSSE) guidelines Examples of KPIs for companies wishing to commence an SPM initiative (depending on the industry) could be Energy costs Per unit of Production, Total Waste Disposal costs, or Raw Material costs Per Tone of Product. The ultimate goal of SPM is to achieve strong lines of visibility and communication with suppliers, help to develop collaborative relationships and drive performance forward.

Buying Your Way Out of Climate Change: What Does Carbon Offsetting Really Achieve?
By Jill Barker page no: 24 25 Supply Chain September/October 2008 (www.scemagazine.com)

The author argues that a credible carbon management strategy should focus on avoidance, reduction and replacement options, which must be exhausted before offsetting is used to neutralize any unavoidable emissions. ARRO defines a hierarchy of carbon management options Avoidance of emissions Reduction through energy efficiency Replacement of high-carbon energy sources Use of high-quality offsets.

Usage of CHG protocol Most companies use The GHG Protocol to measure their emissions and scope out an appropriate carbon reduction strategy Scope 1: Direct corporate greenhouse gas emissions, from sources owned or controlled by the company. Scope 2: Indirect corporate emissions: These emissions result from the off-site generation of electricity, steam, or heat which is then purchased by the company. Scope 3: Expanded indirect emissions: These emissions result from activities related to company operations, but from sources not owned or controlled by the company.

Ethics in Retailing
The following section will review five literatures published in various publications pertaining to how ethics can be applied to the Retailing. Retail Ethics and Green Retailing
By Rahul Gupta & Dr. L. K. Singh (International Journal of Retailing and marketing)

The paper undertakes the study concepts of Green Retailing and its emerging competitive advantages Green Retailing What you sell: A green product is one that benefits both people and the planet and is ideally regenerative for life on Earth How you sell: Companies can operate and sell in a green way Advantages of Having Green Buildings for Green Retailing Higher worker productivity Improved employee health Longer employee retention periods Positive corporate image

Competitive advantages of Green Retailing Environmentally friendly project Sustainable Recyclable Hazardous/Toxic Renewable

Ethics in organic retailing

By AUSTRALIAN ORGANIC JOURNAL SPRING 2005

The paper talks about the opportunities for altering the traditional marketing habits of retailers. The various options suggested are Buy local as a preference. Reduce food miles and greenhouse gas emissions. Buy first from small producers and processors in preference so their efforts are rewarded. Pay them more than larger businesses in recognition that they do not have the economies of scale or capitalization. Value small is good". Buy first from producers or processors that pay according to accepted award structures or above award. Offer long-term contracts five years with a clause to renegotiate after three to four years so if things dont work out, the producer and or processor has time to retool and find a new buyer if needed. Offer protection in contracts so that if producers or processors are hit with forces outside their control, such as drought or disease, they are supported, not penalized. 8

 Consider offering staff ownership options in the business model perhaps through shares. Price foods for sale fairly, and avoid the use of low prices and loss leaders to entice customers.

Ethics in retailing perceptions of management and sales personnel

By Dr. Nripendra Narayan Sarma

This study focuses on the ethical practices of retailers and the ethical beliefs of retail sales force. The ethical issues faced by retail sales force are broadly classified into three Customer related, peer related, work related. Customer related ethical issues Charge full price for a sale item without the customers knowledge Dont tell the complete truth to a customer about the characteristics of a product Customer damages product in the store and wants a mark down Make excuses when merchandise is not ready for a customer to pick up Sell a more expensive product when a less expensive product would be better for the customer Dont offer information to the customer about an upcoming sales (which will include merchandise the customer is planning to buy) Make excuses to customers about unavailable merchandise when merchandise is not yet in stock or is sold out Give preferential treatment to certain customers

Peer related Pressure from fellow employees not to report employee theft Offer to give a friend and employee discount

Work related Salesperson receives an unfair workload Sell merchandise that is not of good quality Sell the product as if it were an exclusive when in fact it is available in other stores Perform your job with inadequate job information or training Use of sales contest for salespeople in order to generate sales from customers

Retail Ethics: An Exploratory Examination of Consumer Perceptions

By James L. Thomas, Jr., University of Mississippi , Faye S. McIntyre, Rockhurst College and Faye W. Gilbert, University of Mississippi

The sample frame for this study consists of the 31,000 residents of a Southern county. Respondents were clustered using the nearest neighbor method with a squared Euclidean distance measure. Consumers in Cluster One appear to believe retailers act unethically less frequently than do those in Cluster Two therefore, Cluster One members is called as trusting consumers and Cluster Two members are called as skeptical consumers. The important findings of the study are summarized below. Trusting consumers are older than skeptical consumers Women are more likely to be trusting consumers, while skeptical consumers tend to be male. Single people are more often skeptical, while those who are married are trusting Consumers with lower income levels(less than 10,000) are more skeptical Consumers with income levels (between 50,000 and 74,000) are more trusting Customers with no high school degree are skeptical Customers who are high school graduates are trusting Customers who are graduates are trusting

Retail Ethics and Green Retailing 2011: More than plastic bags?
By Centre for Retail Research

The study was conducted by Centre for Retail Research, UK. The conclusions of the study are as follows Greener Shops: Most retailers are keen to show they are environmentallyconscious Green policies: Most large retailers are now committed to environmentalism through - 'green policies', curbing waste, less packaging, product revamps, reduced energy use, fewer distribution trips, reducing product-miles Retailers Probably Do Far More to Green Their Operations than the CustomerFacing Bits of the Store Retailers would do more if the Green Suppliers Were There Humane Food and Fair-trade Consumer Information Packaging: Movement on packaging has been slower Subsidies are a Danger Green-wash is a Danger Customers will expect environmental transparency 10

References
Ethics in Supply Chain Management (SCM) by Abedullah Zama
http://www.idt.mdh.se/kurser/cd5590/Archives/06_11/lectures/Ethics%20in%20Supply %20Chain%20Management.pdf

Building an Ethical Supply Chain by Michael R. Levin

http://www.integrity-interactive.com/docs/Boardroom_Briefing-SEM.pdf

The Ethical Supply Chain Is it Viable? by D r. Alan Knight , OBE

http://www.touchbriefings.com/pdf/199/ifpm032_p_knight.pdf

Reducing Environmental Risk through SPM by Philip McVeigh page no: 21 Supply Chain September/October 2008 (www.scemagazine.com) Buying Your Way Out of Climate Change: What Does Carbon Offsetting Really Achieve? By Jill Barker page no: 24 25 Supply Chain September/October 2008 (www.scemagazine.com) Retail Ethics and Green Retailing by Rahul Gupta & Dr. L. K. Singh (International Journal of Retailing and marketing)
http://ijrm.org/issuedetail.aspx?iid=36

Ethics in organic retailing by AUSTRALIAN ORGANIC JOURNAL SPRING 2005

http://www.bfa.com.au/Portals/0/BFAFiles/ethics%20in%20organic%20retailing%20pg2021.pdf

Ethics in retailing perceptions of management and sales personnel by Dr. Nripendra Narayan Sarma
http://dspace.iimk.ac.in/bitstream/2259/388/1/61-68.pdf

Retail Ethics: An Exploratory Examination of Consumer Perceptions by James L. Thomas, Jr., University of Mississippi , Faye S. McIntyre, Rockhurst College and Faye W. Gilbert, University of Mississippi
http://www.sbaer.uca.edu/research/sma/1995/pdf/32.pdf

Retail Ethics and Green Retailing 2011: More than plastic bags? by Centre for Retail Research http://www.retailresearch.org/retailethics.php

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