Ethical Dilemmas in Supply Chains
Supply chains are simply the systems that exist within businesses and organization that are associated with the movement of products to the customers from suppliers. It is a very important aspect of business because it finalizes the business process by availing products and services to customers. When it comes to businesses cost is usually one of the most important driving force of its activities, and most businesses develop their operations in a manner that is expected to reduce costs and at the same time reap maximum benefits. This is a factor that makes most businesses prioritize the needs for financial obligations over other important aspects such as values, social responsibility, and ethical considerations. The supply chain is a system that has to involve the interaction of people, and as long as this occurs, ethical dilemmas always arise. Ethical dilemmas are situations that develop and require the need for picking a choice from options that exists and neither of the options present usually have the capacity to improve the situation. These dilemmas are usually a factor of morals, and the Society provides guidelines for which a person is expected to use when picking a choice during the ethical dilemmas. When it comes to supply chains, cost and human interactions force many organizations into ethical dilemmas. For example, globalization has enabled many corporations to shift operations to countries of the world where the cost of productions are low and utilizing the capacity for low labor conditions and less strict laws on pollution and other forms of environmental degradation. The topic of ethical dilemmas in the supply chains is important especially in addressing some of the social problems that exist today as a result of the need for corporations to consider cost and financial success over other aspects of human life such as working conditions, environmental degradation and other forms of social problems (Beroe, 2014).
As explained above unethical behavior caused during ethical dilemmas by organizations has become a great factor of costs in the supply chain. One of the factors that are contributing to poor decisions being made by companies is the increased demand for products and services. Increased demands coupled with steep competition is causing a lot of unethical behavior in the supply chain. The scope of the topic is based on ethical problems that are attributed to business decisions such as poor job conditions as a factor of the need to reduce costs, exploitation of employees by use of low pay and degradation of the environment. In most cases, large corporations use their financial abilities to exploit nations. Establishment of businesses in countries such as those in the third world is most of the time expected to be advantageous as a form of foreign investment whereby the business is expected to create employment and also generate revenue for the government, but unethical problems on the side of corporations force them to engage in activities that unethical. Most third world nations suffer from overexploitation or resources, and environmental degradation at the cost of a false foreign investment. The aspect of supply chains is associated with various activities that include; the management of customer relationship, the management of suppliers, risk management, production and resource management and many other activities all of which work together for the movement of products and services to the customers Ethical Dilemmas in Modern Supply Chains, 2017).
The history of supply chains in terms of great development and increased complexity dates between the 1980s and 90s when the aspect of outsourcing became common especially in America. This is an aspect that allowed businesses to outsource their supply operations to other business. The development of globalization coupled with advancement in technology made it possible for businesses to outsource in other countries where it would be more profitable (Guthrie, 2012).
The desire for competitive advantage by businesses forces them to compromise some of the activities explained b\above. All these forms of compromises lead to a change in how the products and services are developed in terms of quality. Unethical behaviors ion the world of today occurs in both local, as well as global chains and the desire for profitability, blinds most organizations from the implications their decisions have on the world. In, most cases, economic situations forces the hand of many organization and force them to engage in unethical behavior. For example, the economic recession of 2009 saw a great reduction in business in America as the purchasing power of the people greatly reduced. This situation forced a lot of companies to go bankrupt and completely stop operation because of poor sales (Guthrie, 2012).
On the other hand, most of the others sought to find ways to boost their businesses by reducing their costs of production and one of them included the shifting of operations to countries of the East such as China. This set in motion a trend in businesses where manufacturing plants were relocation to countries of the east where the cost of labors, the cost of regulations and the cost of raw materials were low. During this period of time most businesses made efforts to survive the economic times and therefore, resulted in other unethical measures such as avoiding regulations, altering the quality of products or developing counterfeit products, moving to countries where protection of labor is less strict in order for them to take advantage of workers by having them work for long hours but paying them very little and even forgoing the cost of environmental degradation which can be a huge cost for organizations Ethical Dilemmas in Modern Supply Chains, 2017).
The aspect of globalization has led to the development of long supply chains because of the need to meet the needs of a global market. Vast nature and complexity of the supply chains have made it difficult for many businesses to have full control of the people they are dealing with and how their products are being handled. Developing as sustainable supply chain either for a short and less complex one or a long and complex one can be a very hard task, and this is because there are no incentives in making the chain suitable, but there is when making it less sustainable because businesses can save a lot of costs in the process. However, the modern world of today has changed, and customers find ethical considerations more attractive in businesses and prefer those that consider it in their supply chains (Ethical Dilemmas in Modern Supply Chains, 2017).
The public in most countries together with governments have seen the need for ethical behavior in supply chains for businesses and have tried to develop ways of protecting consumers, and one of the \m is through the use of laws. Laws have become good and powerful forms of motivation for supply chains to practice ethical behavior. Laws provide for ethical conditions such as criminalizing environmental degradation, child labor, and poor working conditions. The law is forcing many companies to reevaluate their supply chains with the aim of making them sustainable and also avoid being on the wrong side of the law. Many trading blocs in the world are also f\developing policies and laws that also provide guidelines for a sustainable supply chain and making it mandatory for businesses to adhere to them (Guthrie, 2012).
Another system change in the supply chain world is the fact that ethical considerations have now become a factor that is good for business and as explained above many consumers are finding companies that operate ethically more attractive. Instances of unethical behavior are now considered very bad for business and are associated with huge losses. For example, there have been instances of public boycotts of products developed by businesses associated with pollution, child labor or poor working conditions. People have developed the awareness of the importance of a sustainable supply chain and a greatly demanding for it. It has become a fact of the capitalist world that fiscal needs and gains of organizations outweigh the need to uphold values and the supply chain of a business stands in the middle of ethical dilemma that most businesses face. The high demand put on businesses by markets of the world have led to the development of supply chains that are, long, complex and quite prone to unethical behavior because most businesses lose much of the control over the way their products move to their customers. However, there have developed measures that seek to ensure that businesses uphold ethical behavior in their supply chain and the use of laws and policies is one of them. The public has also seen the need for ethical behavior by businesses a great aspect aimed at protecting their interest from exploitation and now demand the best out of businesses (Guthrie, 2012).
Ethical Dilemmas in Modern Supply Chains. n.d. http://www.martijnboersma.com/ethical-dilemmas-supply-chains. 2017.
Guthrie, Doug. Building Sustainable and Ethical Supply Chains. 2012. https://www.forbes.com/sites/dougguthrie/2012/03/09/building-sustainable-and-ethical-supply-chains/#30d90614179d.
Inc, Beroe. Ethics Issues Prevail in Supply Chain Management. 2014. http://www.mypurchasingcenter.com/purchasing/industry-articles/ethics-issues-prevail-supply-chain-management/.
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