Ethics & Values in Management

Submitted by: Group B1 (12083) (12120) (12095) (12108) (12112) (12104)

The Ethical Supply Chain & Global Outsourcing Is it Viable?

Proposal
Businesses dont compete but supply chains compete How to engage complex supply chain demands to please stakeholders into a cohesive & profitable business idea? Is it viable to have an ethical supply chain & global outsourcing? Example: Is Wal-Mart ethical to its Suppliers, competitors, employees and Customers?

Ethical Model/Process
Dominant Firm
Supply chain should be responsible for the ethical conduct of its Elements
The most powerful value chain member bears the greatest burden of responsibility With greater power comes greater responsibilities Economic responsibilities: Supply Products and Services Legal Responsibilities: Obey Laws Ethical Responsibilities: Conduct business in a way that is morally consistent with the beliefs of society

Why?

Sustainable Supply Chain Management

Ethical issues
Labor practices (child labor, discrimination, wages, unions, working hours, health & safety) Irresponsible marketing (marketing to children, misrepresentation) Supporting oppressive regimes Honesty, trust, respect & fairness in corporate relations Bribery & corruption

Ethical issues in Wal-Mart Supply Chain

Wal-Marts logistics systems

With Employees:
Payment of overtime working (Right to compensation)

No mandated breaks, lunches & availing missed breaks(Fairness)

Not adequate salary or healthcare provided (not fair to society or competitors) Employing minors or child labor(Right to education)

Continued..
With Suppliers:
Harsh or stringent working conditions & treatment (consumers being a part of accessory to slavery)
Workers may lose their job(Deprived of livelihood) Dilemma: Either to lose a job or work in such conditions

Continued..
With Competitors:
Wal-Mart getting huge subsidies(Unfair)
unfair usage of undocumented workers to obtain their labor at a much cheaper rate Sourcing at a cheaper price from downtown stores, selling it in even cheaper rates to people there & stopping it later when competitors went out of business Dilemma: (for governement) Whether they decide on small shops or large stores for subsidies 8

Observations
Unreasonable deadlines for orders and demands for ultra-low prices Wal-Mart being a retailer (& not factory) shifts the blame of factory monitoring and remediation issues to suppliers Wal-Mart considers these products outside the purview of the auditing program Wal-Mart argues that it is too difficult to monitor and enforce their standards because of inconsistent laws and the biases of factory owners

Recommendations to resolve issues & dilemmas

With Employees:
Budget money for payroll when an employee works overtime
Enforce existing labor standards that hold multiple entities jointly responsible for any work performed in the business All work and no play makes Jack a dull boy". Provide healthcare, social programs ,emergency care Gaining a competitive advantage of being social responsible by not employing child labor 10

Continued..
With Suppliers:
Address auditing program to enable auditors to fully investigate factories and gain a realistic depiction of operations
To publicly disclose information on suppliers qualification rating Set goals to measure compliance & progress of suppliers with the set policies. Extend the period of contract or provide an incentive to motivate suppliers

With Competitors:
Wal-Mart should not need any money from cities, states, or communities or ask for subsidies to government. It should involve in healthy competition. 11

Continued..
To improve supply chain:
Enforce Existing Laws Making Multiple Entities Jointly Responsible for Labor Violations
Adopt innovative laws to create greater transparency in contracting relationships 1.Establish a presumption of employer status 2.Pass responsible contractor laws that apply across all industries 3.Require screening for subcontractor labor law violations when corporations compete for public contracts 4.Pass hot goods laws that permit seizure of goods and stop-work orders in a supply chain with labor standards violations: 12

Continued..
Wal-Mart should adopt and follow strong codes of conduct making a mandatory ethics compliance training Document the Scope of Contracting-Out and Its Impact on the Labor Force and the Economy Overall Provide a Dispute Resolution System Reform the Pricing Process and Commit to Long-Term Relationships with Suppliers

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Continued..
Commit to Sourcing From Union Shops and Worker Co-Ops Worldwide Ethical Purchasing in practicea checklist 1. Ethical purchasing strategy: 2. Map the supply chain 3. Ethical business practices

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Conclusion
Commitment to its shareholders, customers, and stakeholders Ethical standards are not just to improve public relations and image

Ethical standards to be incorporated into the business strategy

Wal-Mart must commit itself to transparency with real, multistakeholder involvement and protect freedom of association

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Does one Good Act Balance a Bad One?

Low prices are no excuse. There is no way one right can make up for a wrong - this is a form of rationalization. Wal-Mart can make a difference by being ethical, but only if they try.

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