A Study of Ethical Considerations in Supply Chain Management Research and Practice

This report investigates how ethical factors are being considered in supply chain management research and practice. A literature review defines the key terms and identifies several gaps in research, two of which are addressed in this paper; firstly how firms currently evaluate the ethical performance of their suppliers and secondly how existing supply chain management theory should be amended to incorporate ethical considerations. An analysis of frameworks and codes of conduct published on the web was carried out. This found that the majority of firms’ frameworks were based on the conventions of the International Labour Organisation, with frameworks generally being a set of firm rules to which suppliers must adhere. Interviews were then carried with individuals from companies in three different industries; supply of fresh fruit to major retailers, retail of general leisure goods and clothing manufacture. These interviews highlighted several areas of similarity between the issues faced when managing a supply chain. Key points were the strong power over the whole supply chain held by some retailers and the importance of good relationships along the supply chain. This paper introduces a new model of risk factors derived from the framework analysis and company interviews. This shows the power of the company, the nature of the industry and the country where goods are manufactured as being key risk factors. These risk factors were then used as inputs to a new overarching model of ethical supply chain management. This new model shows the key decisions at the design, tactical and operational levels where ethical elements should be considered. These decisions lead to the development of an improved framework for a company’s code of conduct, which in turn can drive better outcomes, both commercially and ethically. The paper concludes that consumers’ desire for extensive availability of goods in store at low prices contributes to ethical failures in the supply chain, and suggests that changing these expectations would lead to a positive ethical outcome. A set of managerial recommendations are provided, based around the new model. These include taking a “design for ethics” approach to integrate ethical decisions into supply chain design, and suggest that fairer pricing would be the most effective method for improving ethical supply. A list of limitations and recommendations for further research is provided