Corporate Social Responsibilty in supply chain

Topics: Supply chain management, Supply chain, Corporate social responsibility Pages: 12 (3601 words) Published: January 23, 2014

Corporate social responsibility in the supply chain
1. Problem
Despite the long history of CSR, applications of CSR (and sustainability) concepts to supply chains have started to emerge in the last years. Sustainable ‘Supply Chain Management’ is defined as the management of supply chains where all the three dimensions of sustainability namely the economic, the environmental, and the social ones, are taken into account. When sustainable Supply Chain Management principles are adopted, companies are held responsible for the social and environmental impacts arising along the supply chain. They are also demanded to integrate ecological and social aspects into the decisions and actions which involve the supply chains they belong to. Moreover, when supply chain relationships include developing countries, companies are asked to take responsibility for the well-being and performance of small up-stream producers working in those countries. An increased pressure by stakeholders, mainly consumers and non-governmental organizations (NGOs), is placed upon companies specifically to develop management systems across the supply chain. Such systems can also be used to transfer socially responsible behaviours along the supply chain. This stands especially in developing countries, where the countervailing powers of governments and civil society are weak and poverty prevails .To transfer supply chain partners socially responsible behaviours, companies can establish written supplier requirements ,guidelines and requirements where in-social and environmental performance suppliers are asked to pursue are reported; monitor supplier performance, to verify their compliance with the written requirements contribute to suppliers awareness building and training on CSR issues . Businesses need to constantly rely on suppliers to reduce overall costs, while improving the quality of their goods or services. Companies should downgrade the volume of suppliers they do business with, and award contracts to a select few, in order to lower operating costs. By establishing a strong supply chain, companies can push for continuous quality improvements, and price reductions. The long-term benefits of the listed above create a better value for stakeholders. Emphasizing the importance of practicing of CSR to suppliers, researching their existing supply chain increases the standards and sending out CSR check-sheets to existing suppliers is important to staying on-track of a company’s implemented CSR activity of ‘Supply Chain Management’ which is a growing phenomenon across the globe.

Few papers in academic literature had been investigated on how CSR issues are implemented and controlled along a supply chain. In this article, the CSR reports published by a few European companies were analysed. In particular, the following CSR issues in SCM were investigated: •What CSR standards are adopted by the selected companies? •What CSR principles and standards suppliers are requested to respect and adopt? •How companies communicate to suppliers their commitment to CSR and try to obtain commitment from them. •How companies train suppliers on CSR activities.

What process is adopted to implement CSR standards, both within the companies and along their supply chains? •How companies monitor CSR activities carried out by suppliers. •How companies define corrective actions when non-compliances with CSR principles and/or standards are found out.

3. Tools

Supplier contracts
Companies are adding human rights and environmental clauses to supplier contracts. According to the clauses, the supplier agrees that it is responsible for controlling its own supply chain and that it shall encourage compliance with ethical standards and human rights (i.e. compliance with minimum wage legislation, healthy and safe workplace free from discrimination, no form of slavery or exploitative child labour) and environmental issues by any subsequent supplier of...

References: 1. Miles M.P., Munilla L.S., 2004, the potential impact of social accountability certification on marketing: A short note, Journal of Business Ethics, 50(1), 1-11.
2. Peloza J., 2006, using corporate social responsibility as insurance for financial performance, California Management Review, 48(2), 52-71.
3. Porter M.E., Kramer M.R., 2006, Strategy and society: The link between competitive advantage and corporate social responsibility, Harvard Business Review, 84(12), 78-92.
4. Roberts S., 2003, Supply chain specific? Understanding the patchy success of ethical sourcing initiatives, Journal of Business Ethics, 44(2), 159-170.
5. Mamic I., 2005, Managing global supply chain: The sports footwear, apparel and retail s 11] Wolters T., 2003, Transforming international product chains into channels of sustainable production. The imperative of sustainable chain management, Greener Management International, 43, 6-13.
Adithya Prashanth
1 BBM ‘A’
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