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‘’ethical Supply Chain Management Is It Viable?’’

4327 words - 18 pages

There has been a lot of interest generated in the study of ethics in business both locally and globally. This has also evolved in the field of Supply Chain Management (SCM) through the interaction between suppliers and customers in their logistics and material management functions (Tan K.C et al 2002). Ethics and SCM have developed into a strategic business concept through coordination and collaboration of channel partners (Larson P.D, Poist R.F and Halldorsson,A 2007).Consequently, the involvement of various stakeholders through collaboration and coordination in the supply chain has created major challenges in the fulfilment of stakeholder expectations. There are many varying expectations ...view middle of the document...

Skjøtt- Larsen et al., (2007) as cited in Andersen M and Skjøtt- Larsen (2009) view Supply chain management(SCM) as ‘’an area of increasing strategic importance due to global competition, outsourcing of noncore activities to developing countries, short product life cycle, and time compression in all aspects of the supply chain’’. Organisations should be able to create close and long-term relationships with suppliers and other strategic stakeholders to remain competitive in the market. As the need for long term supply relationships becomes more visible in the supply chain a new phenomenon of ethical supply chain management has evolved. What does it mean to manage the supply chain in an ethical way? How viable is ethical supply chain management. Can a supply chain be ethical in a global environment?

Webber (1992) and Houlihan (1984) as cited by Andersen,M and Skjøtt- Larsen,(2009) define Supply chain management as “the management of materials across functional boundaries within an organisation”. In addition Wolmack et al (1990),Womack and Jones (1996),Christopher (1998) and Harland and Clark extends the definition to include ‘’management of upstream production chains’’ and ‘’downstream distribution channels’’ with suppliers and customers in order to create enhanced value in the final market at less cost to the supply chain as a whole.(Juttner et al 2004,p2). The relationships with suppliers and customers raises the issues of ethics and how that is applied in the concept of SCM.Scott and Westbrook,(1991) and New and Payne(1995) describes SCM as “the chain linking each element of the manufacturing and supply process from raw materials through to the end user, encompassing several organisational boundaries and...’’. This therefore extends the scope of SCM and brings into play a number of stakeholders who are involved at every level of the supply chain. The dilemma is that these stakeholders expect organisations to act responsibly and ethically. Smith and Quelch (1993) as cited by Lantos G.P (2002) explains that ‘’ethical responsibilities go beyond the law by avoiding harm or social injury ,respecting people’s moral rights and doing what is right, just and fair’’. However there has been a struggle by corporate executives on how to balance “commitments to the company’s owners and obligations” to an ever increasing group of stakeholders who claim both legal and ethical rights Carroll,A.B.(1991).
Organisations must observe certain standards in their dealings over and above compliance with the letter of the law.(John Black et al, A dictionary of Economics in Economics and Business). This raises questions in the way the supply chain organisation deals with their customers, suppliers, competitors, society and “the impact of their activities on the environment”, public health and animal welfare. Haynes, P.J and Helms, M.M (1991),p.219 defines ethical behaviour as “the use of recognised social principles involving justice and fairness in situations...

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