Article-Supply Chain Specific Assignment Help

A CRITICAL REVIEW

Introduction

The article ‘Supply Chain Specific? Understanding the patchy success of ethical sourcing initiatives’ by “Sarah Roberts” touches upon a very critical and sensitive practice being carried out by small and large scale enterprises alike. Author’s thesis is that the success of any ethical sourcing initiatives depends greatly on the industry and the stakes and values of its key supply chain members. The core issue or conflict presented in this paper by Sarah Roberts is that whether or not the supply chain is in conformance with the social good when producing goods that essentially do not have a very environment friendly impact. Is there any conflict between the statement and practice? If yes then to what extent does the corporate social responsibility play its part? What is corporate social responsibility? Is it just about doing a good will gesture to the society in which firms operate or something far greater than that? The author herself works for companies wanting to indulge in initiatives of corporate social responsibility and the issue of such conflict has been discussed throughout the article. Environmental and social issues have been discussed in detail to gauge the impact of the supply chain; comparisons among various networks have also been made (Roberts, 2003).

Summary

Primary and secondary research was carried out for this paper. Much of the information has been excerpted from the Author’s MBA thesis which was on reputation of a company, CSR and the supply chain. Results from a survey that Environics carried out back in 1999 in 26 countries were also included in this article. Apart from this, the entire paper has been based on a case study approach whereby the author uses different statements made by renowned researchers in the field of marketing and management. The first half of the paper entirely discusses the various features that make up the corporate image of the brand or the company. The most prominent feature used for building the corporate image is the reputation of the brand (Roberts, 2003). The author pleads a case whereby she highlights the importance of reputation and the various stakeholders that have vested their interest in the activities of the firms related to CSR. The second part is more of a comparison between the ethical sourcing of supply chain activities and the CSR affected or promoted due to such activities. Where the article mentions ethical sourcing or ethical issues it only refers to the social and environmental issues (Roberts, 2003).

In order to validate the case, the author has cited interview’s inserts of the CEOs of various multinationals such as Nike and Starbuks. The case study also includes a comparison between the supply networks of cocoa production, diamonds, clothing and footwear (Roberts, 2003). Validations have also been adopted from researches carried out previously on corporate social responsibility and the established theories of branding and supply chain.  The concept of forest management has also been highlighted in the case as an upcoming aspect and will be discussed in the analysis of the paper. Laws related to labor pressures and wages offered have also been discussed in lieu of the supply chain networks and the operations demanded. Accountability factor for multinationals is also highlighted as they are the prominent players of the industry. This is in fact the major reason behind their focus on CSR as they can be held accountable for major environmental impacts; good or bad; that their industries have (Roberts, 2003).

Critical Evaluation of the Article and its Practicality

The nature of articles used in the literature review is pretty strong and the case is based on thoroughly researched articles. Definitions and explanation of terminologies have been provided through established theories from books. The author has also cited some of the surveys to authenticate the qualitative statements she has made in her article. The data from millennium poll (which is a measure of how well the companies are performing socially and ethically) was also utilized. It covers all dimensions from quality of production to labor laws (Environics, 2003). A major aspect from the result generated from the survey of these polls that was not mentioned in the article was that of the customers; one of the major stakeholders who value companies that perform best at carrying out effective social activities (Environics, 2003). The practicality of all these qualitative measures is to ensure superior financial performance for the organization. Positive reputation will ensure that the customers are ready to put their trust in the product and buy it. Consistency is another factor that works in support of all these cases made by the author. If the customers are consistent in their buying behavior then a regular user can be easily shifted to become a heavy user. Moreover, due to the influx of information and brand knowledge the consumers have become more aware about the choices they make. In such a case the implementation of a greener and safer supply network and social welfare service as mentioned in the article, can create a competitive edge for the firm. It can draw customers to itself and the companies that practice these concepts can gain much benefit from the extra effort they are making in the long run in the form of financial returns which is the ultimate goal of all the businesses; as well as non-financial return of goodwill that helps the company reach for its ultimate goal.

In the first half of the case the author has only focused on brand reputation and imagery using sources such as Kotler, Dowling, Deephouse and Fombrun. In doing so, she has missed out on a major concept while discussing brand reputation and imagery. This concept is known as brand equity. The CBBE model (customer based brand equity) is the foundation of branding and brand perceptions. If the author had incorporated that concept, the reputation and imagery of brands could have been defined in more detail as it is the best pyramid that contains all the components of effective branding (Keller, 2007). This model also mentions the emotional route and the rational route which are useful in creating a positive reputation for the firm. It can further be used for creating a competitive advantage for the firm plus it can work towards eliminating some of the negative connotations attached to the firm’s brand name (Keller, 2007).

Afterwards, the case moves onto the discussion about the stakeholders. Amongst the external stakeholders, NGOs, media and community have been highlighted as the major components. However, the author fails to explain how media can be used as a resource for positive brand and reputation building. Some companies operate on the VRIO model which is the value, rarity, imitability and organization (Barney, 2006). This strategic model adds value to the firm in a distinct fashion. The case made by the author weakens here as she has not supported the role of the stakeholders with theories and implications. Media can be used as a resource for communicating the whole message behind the company. In the network pattern discussed, this one resource alone can form the entire reputation of the firm (Deephouse, 2000).

There are two major industry sectors that have been highlighted throughout this article whose supply chain networks are studied in great detail. The reason for this was that the products from the clothing, footwear and forest industries are liable to create an effect of depleting earth’s resources and cause several environmental issues. In case of the foods and confectionary industry, cocoa production has been analyzed in a completely different manner as the control operation dynamics are different in its supply chain. As far as the food industry is concerned, the supplier network doesn’t have much of the reputation at stake rather it is the company that has to maintain its image of quality (Brown & Maloni, 2006).

In a similar research, various levels of the network (starting from the manufacturer) were studied, while observing each value addition factor of the supply chain and see how CSR can be practiced at all levels to create an integrated system. According to the research, in case of food business/industry, animal welfare is of prime importance. Food industry can significantly cater to CSR and can also establish an efficient supply network by working on some useful techniques such as bio technology, human welfare, labor laws, fair trade and health and safety precautionary measures etc (Brown & Maloni, 2006). Nowadays since the consumers are getting more and more health conscious, the manufacturers in the food industry need to adapt to strict quality control and safety measures for all the suppliers. Besides that the manufacturers should also be completely aware of the environment in which they are functioning. With the passage of time the stakeholders’ concerns are increasing as well. According to them, what good is the food in terms of health and nutrition if the company cannot perform social activities to keep the environment clean in which its customers are breathing and living? Carefully adhering to CSR will in turn create a positive cycle for the company. Hence, it wouldn’t be wrong to say that the benefits of corporate social responsibility are not just restricted to the customers.

Forest products are a major area of production and an independent industry on its own that has been discussed in this case. The author has used various laws to support the facts stated in the articles from sources such as The Forest Steward’s Ships Council, DIY sector and NGOs etc. The case made in this part of the article is that there are separate forest NGOs and councils that have regulations regarding the maintenance of forests used by huge retailers for business purposes. So in such a case the highest amount of power in the network rests with the retailers of the forest products (e.g. wood paper etc) and the forest owners. Both of these players determine the dynamics of the market (Roberts, 2003). The case made later signifies a very important point where the author states that due to customer pressures many companies need to acquire proper certifications for selling these forest products.

This, in turn, is a crucial point that the author tries to highlight whereby customers have now become a lot more aware than they used to be and are now concerned about issues such as forestation, restoration of green plants, ozone depletion effect and global warming issues. Consumers today, also prefer products that are eco-friendly and are not causing any major environmental hazards such as green deforestation (Environics, 2003).

Implementation of the ethical sources and network relations has also been discussed in the article. The importance of network relations relates directly to the labor laws and unionizations. Power relations at each step have been defined and discussed in minor detail to signify the importance of each member in the supply chain. The main sub text behind this discussion was to promote the benefits of labors working at each level and how each member works towards the social responsibility and values directed by the firm.

This article has major significance as it dictates the major policies that need to be implemented throughout the supply chain in order to avoid drastic problems in the future. It is not only that through avoidance we can save the environment but it is a win-win situation where the company will benefit in terms of finances and the customers in terms of satisfaction. The article concludes that the real challenge behind these cases is the implementation of the regulations suggested. Practical implementations of such policies may require extensive training sessions of the lower level staff but this will eventually lead to lowering costs, increasing efficiencies and building positive brand synergies in the minds of the consumers.

The author suggests that a collaboration of NGOs and manufacturers is required at a high level. This is an essential point raised by the author as the NGOs already have an in depth exposure into the practices required for efficient management of resources. They are the best source of guidance for the manufacturers.

In practice, evaluation of the response rate to a socially ethical initiative in any industry will always be an uphill task because customer satisfaction and reaction over a social activity will always remain a subjective notion (Bhattacharya & Sen, 2004). The competition also needs to be kept in mind and since one size does not fit all so the strategic implementation of the CSR activity has to be designed in a way that it appeals to a greater proportion of the target audience. The company can diversify the concept into ideas such as community support, supply chain green technologies, recycling systems, employee support activities etc. In short, this piece of writing can have practical grounds but with some smart customization according to each company’s internal and external factors. The author has taken up a pretty ethically aware topic to shed light on. Further research can be carried out on this topic to better explain the CSR activities and recommend structures of implementation that different kinds of companies can adopt. (Bhattacharya & Sen, 2004).

References

Barney, J. (2006). Strategic Management and Competitive Advantage. USA: Pearson.

Bhattacharya, C., & Sen, S. (2004, September). Doing Better at doing good : WHEN, WHY, AND HOW CONSUMERS RESPOND TO CORPORATE SOCIAL INITIATIVES. California Management review, p. 1.

Brown, E., & Maloni, J. (2006). CSR in the supply chain : food Industry. Journal Of buisness Ethics, 35-52.

Deephouse, L. (2000). Media Reputation as a Strategic Resource. Journal of Management, 1091-1112.

Environics. (2003). Millinium Poll. England: GlobeScan.

Keller, L. (2007). Strategic Brand Management. USA: Pearson.

Roberts, S. (2003). Supply chain Specific. Journal Of Buisness Ethics, 159-170.