The Role of Supply Chain Management Contributes to Responsible Business

SUPPLY CHAIN MANAGEMENT ASSIGNMENT

The role of supply chain management contributes to responsible business!

Responsible Business

In recent years and globalization market, there is a common agreement that business should recognize moral responsibilities for social, environmental, workplace and governance aspects in their business operations. Responsible business can be defined as a term that can be used to describe any business process which takes into account social, environmental and ethical governance considerations into their business operations.

Carol Sanford, in her interview (2010) on how company became a responsible business presents responsible business as a co-creative partner in ensuring the vitality and health of all the communities it belongs to. It develops its capacity to play the role of innovation partner. It sees itself as getting smarter about what it takes to be a lead agent in making the systems it touches healthier and more vital. 

The constituent of responsible business can be described in detail as follows in:

1. Social: The impact of business such as products, commodities, projects, services or any venture on the community at local or global level.
2. Workplace: respect to diversity, equitable treatment of employees and provide equal opportunity; provide work-life balance, provide career developments and full entitlement of employments right.
3. Environmental: The impacts of business operations to our environments.
4. Business Conduct: responsible behavior in developing, purchasing, selling and marketing products and services, which could be linked with responsible supply chain management.  
5. Ethical Governance: transparency, bribery, risk management, due diligence, code of conduct, taxation and ethics.  
6. Science and technology  

In the globalization world, businesses that are most likely to succeed are those best able to combine the aforementioned elements in to their business operations and integrate a wider range of opinions and values within the objectives of the organization in responsible manner, implement and evaluate strategies of responsible business practices in their business operations. Therefore, responsible business practice is an important business strategy which is an integral part of the society/community and the environment within which it operates, and it cannot be treated discretely. Hence, the centuries wining companies are those who prove with their actions in responsible manner that they can be profitable and increase social value, greener effect and cherished by their stakeholders.

Further, it is imperative to emphasis that companies, which are capable of meeting the need of cognizant consumers, and consider the “Triple Bottom Line” strategy i.e. economic, social and environmental elements in their business operations, will incontestable achieve a long-term success “Sustainable Business” in their business operations. Therefore, integrating responsible business practices including but not limited to social, environmental, ethical and workplace perspectives in to all aspects of business operations will maximize true value and benefit for the organization.

In general, responsible business contributes to the social, economic and environmental progress in achieving sustainable developments and further, its compliance with the regulations and practices related to business integrity (ethical, moral and religious aspects) are considered as responsible act.

According to “The Hub of Responsible Business Practice in Australia” website, there are eight broader clusters of business benefits for companies that engage in responsible business practice which are described as follows:

1. Reputation management and competitive advantages: including enhanced reputation with customers, market differentiation, buildings brand, goodwill and public trust – creating access to new market
2. Enhanced social license to operate – stronger relationship with communities
3. Employee satisfaction – improved management performance, productivity and capacity to tract, retain and motivate talented staff. Increased learning, innovation and productivity. Reduced hiring and retention costs
4. Risk management – long-term security
5. Access to capital – Improved relations with the investment community and better access to capital
6. Financial performance – Stronger financial performance and profitability through operational efficiency gains
7. Minimized environmental impacts – cost saving an creation of business efficiencies
8. Long-term perspective - benefits from operating with perspective boarder and longer than immediate, short term profits.

Further, business responsibility is frequently referred as Corporate Social Responsibility (CSR). I would like to record the quote from Michael McComb, who prescribed CSR as follows:

“The notion of companies looking beyond profits for their role in society is generally termed corporate social responsibility (CSR). It refers to a company linking itself with ethical values, transparency, employees, compliance with legal requirements and overall respects for the communities in which they operate. It goes beyond the occasional community services action, however, as CSR is a corporate philosophy that derives strategies decision-making, partner selection, hiring practices and, ultimately, brand development.” (McComb 2002)

In relation, I would like to give an example of real-estate business in Ethiopia, whereby most of the client or customers lost their fortune due to the irresponsible and egotistic act of the business and as a result there is no trust in real estate business and in simple term most people don’t engage in any real estate business at this point in time in Ethiopia. Ethiopia is one of the fastest growing developing countries in the world and non-oil economies in Africa. The devolvement in some of the sectors such as industry, agriculture, infrastructure development and public works has roared in the last fifteen (15) years and construction/real estate business became the best sector for investment. Consequently, money Ethiopian’s including the Diaspora’s invested in this business to seize the opportunities in Construction and Real Estate sector and, as a result, bought a property. However, apart from few companies, most of the real estate corporations failed to deliver the project as promised. One of the main reasons was the companies invested the money in other own business after collecting from their clients without any considerations to their commitments. Further, there is no transparency into the financial activities and construction plans for the projects. The customers have no tools by which they can actively oversee the project or means by which project completions would be realized. The other reason is lack of control or system by the regulating body, Government, which just handing out licenses without any requirements, and the same cannot be regulated. Even if the buyers were unable to follow-up their projects there should have been government body that monitors when a real-estate acquired a license and not pursuing construction activities as per the contractual obligation. Therefore, the real estate business in Ethiopian is at the point of no return, and the business utterly botched. This is called failing to operate business in responsible manner without considering the social and economic aspect of its operation. Therefore, acting responsibly not only benefit the community or consumers but also the corporate.