Question

What is ethical sourcing? Why do companies engage in this practice? What are the benefits and drawbacks?

Answer 1

ETHICAL SOURCING

Ethical souricng is a approach that ensures that the materials that are being acquired from various sources do not harm the employees and environment also. The workers should be safe while using the products and it should be environment friendly also.

BENEFITS

1. Company focus on sourcing the products in an ethical manner that means they will follow all the rules and regulations prescribed by the government and which will surely reduce the various cost realted to the procurement of products.

2. It will help the organisation in creating better public relations with the genral public as sourcing products in a way that do not harm the society will create a favourable image of company in eyes of general public.

3. Also the company will have a better relation with the stakeholders like employees, customers, suppliers etc. The company will be able to fulfill its social responsibility towards these stakeholders.

DRAWBACKS

1. Sometimes due to ethical souricng the business is not able to fulfill its main and primary obejctive i.e. profit making. Because procurement of some products ethically is costly to the company which reduces the profits of the company.

2.There are certain rules and regulations which are associated with procurement of some products which are lengthy and it takes a lot of time to fullfil that procedures.