Question

Conduct research to find one for-profit business, i.e., Company A, that is headquartered in one country and sources products or services from a company in another country, i.e. Company B, that are used in Company’s A final products or services offered for sale. Company B represents the supply chain for Company A. (An example of this is Apple – Company A – which sources manufacturing of some of its products from Foxconn – Company B. The end-of-chapter discussion case on pp. 392-93 provide details of this example.)  Describe the following from your research (200 words total for all questions):

What are the names of your two companies and the countries in which each is located?

Does your company have any social, ethical, or environmental issues in its supply chain (Lawrence & Weber, 2017, pp. 376-380)? If so, please briefly describe.

Does your company engage in supply chain transparency (Lawrence & Weber, 2017, p. 381)? If so, please briefly describe.

Does your company engage in supply chain audits (Lawrence & Weber, 2017, pp. 384-387)? If so, please briefly describe the type of audit.

In your opinion, does your Company A ethically manage its supply chain? Why or why not?

Answer 1

1. Company A: Nike, Inc., USA

Company B: Pou Chen Corporation, Taiwan

2. Nike did face ethical issues in its supply chain, when some of its contract manufacturers faced heat, including Pou Chen Corporation, for news of its employees making under the minimum wage, more than 60 hours workweek, and instances physical and verbal abuse at workplace came to light in 2011.

3. Yes, since 2005, Nike publishes the information of the independent factories, contracted to manufacture Nike products, in its website. It also has an interactive map of its current suppliers on its website, including information about the factories and their workers.

4. Nike does engage in supply chain audits. Nike engages in third-party audits. In 2013, Nike, in its audits, found 16% factories violating its compliance. Third party audits are used when the company wants to create a Quality management system (QMS) to find out if the supply chain partners are conforming to a standard set of requirements or compliances. Here, an independent company/entity is hired to perform the audit.

5. In my view, Nike is ethically managing its supply chain, as after facing flak for its actions, Nike has taken every possible step to ensure that the independent contractors working for Nike follow the basic compliance rules, and ensure worker safety and rights. It invests in CSR to improve the condition of workers making Nike products, innovates its product/material development and management to minimize its impact on climate change, and environment. It has taken steps towards water conservation in its supply chain.