Individual Research Report Essay Example
12CSR IN GLOBAL SUPPLY CHAINS
CSR in Global Supply Chains
CSR in Global Supply Chains
The concept of CSR is becoming increasingly important and an integral element of the competitive landscape of international businesses. This is because these CSR activities in the supply chain management on a global scale enable them to create opportunities for strategic advantages. However, along with these benefits associated with CSR, adopting the concept have turned out to be like social obligations of a given company where it has to influence other businesses to act in a particular way regarding CSR. The report has evaluated the areas where CSR can be applied in the global supply chain, as well as the Green Supply Chain Management which is a concept of CSR in the supply chain. The report has also assessed issues to do with the implementation of CSR in the global supply chain, responses to the same, as well as the impacts of CSR in the supply chains. From the report findings, some benefits associated with CSR in the global supply chain include enhancing competitive advantage, optimum utilization of natural resources, increased sales and profits, among others as have been discussed.
Table of Contents
4Areas of CSR in the Global Supply Chains
5Green Supply Chain Management (GSCM)
6CSR in the Global Supply Chain Management
6Enforcing CSR in the Global Supply Chain
7Impacts of CSR in the Global Supply Chains
8The Practical Responses of CSR in the Global Supply Chain
8Implementation of CSR in the Global Supply Chain
9Suggestions for Future Research
In the current world of business, there is an increasing attention which is continuously being channeled towards one business concept known as Corporate Social Responsibility (CSR). This is because it is highly associated with the reputation of a particular company, numerous benefits, has some regulatory impacts as well as various environmental concerns (Andersen and Skjoett-Larsen, 2009). In the same light, the CSR concepts have also been associated with the one of sustainable development which also focuses on human rights as well as environmental issues. In the current world of business, the two concepts, CSR as well as sustainable development are often utilized together (Boyd et al, 2007). Currently, there is also a constant rise in complex supply chains, especially on the global scale which is aimed at exploiting some of the advantages of the various locations of production. However, in doing this, there has been a rising concern regarding some of the activities which are involved in these global supply chains concerning how they treat the environment and the society which surrounds them as well (Boyd et al, 2007).
Following the background, the aim of the paper is to evaluate the concept of CSR in the supply chains and precisely to assess some of the impacts of CSR in the global supply chains context. In doing this, the paper will first evaluate the specific areas of CSR in the global supply chains. This will be followed by a detailed literature review under the themes of Green Supply Chain Management (GSCM), enforcement of CSR in the global supply chain, among other relevant themes under it.
Areas of CSR in the Global Supply Chains
The general supply chain management, per se, is a process which is made of various distinct but at the same time interconnected activities and functions. Among the major activities under the supply chain management include both external and internal transportation management, assembly and managing, acquisition management, inventory management, warehousing, and customer services, among other services and activities (Amaeshi et al, 2008). In the same supply chain, it is possible to break the process into two major flows which include the reverse flow and the forward flow. Following these processes in the supply chain management, the major CSR areas in the global supply chain include; ethical, organizational, as well as environmental practices (Pedersen and Andersen, 2006). Other activities include developing a relationship with the society, those that are linked to establishing healthy working conditions and human rights, and those that are linked to enhancing occupational safety and health (Pedersen and Andersen, 2006).
In all of the activities that have been highlighted above, it is the role of the particular businesses to ensure that they comply with the specific national and international standards and regulations, as well as the rules (Maloni and Brown, 2006). These companies need to work with the suppliers who fulfill the same CSR requirements which are among the major factors in the supply chains in CSR. Additionally, CSR supply chains in the global context for the businesses to remain competitive on the global scale as well as possess some sustainable growth regarding the strategic perspective (Maloni and Brown, 2006).
Green Supply Chain Management (GSCM)
According to various studies, GSCM can be universally defined as a means of reflecting the considerations of a given company as well as its sensitivity regarding environmental issues in all the processes of the supply chain (Blowfield, 2005). GSCM is one way that a company oversees CSR in the supply chain network as it ensures that the corporation and its subsidiaries across the world are not harming the environment or at very minimal levels in all its functions of the supply chain (Blowfield, 2005). However, as a recent survey suggested, that many businesses, more so those that have branches across the world perceive the GSCM activities are usually associated with increased costs (Ciliberti, Pontrandolfo, and Scozzi, 2008). On the other hand, research has also noted that GSCM activities and practices usually assist the businesses in improving productivity, enhancing their competitive advantage, reduce their general costs, as well as foster innovation. Additionally, aside from these visible effects of GSCM as a form of CSR also results in the enhancement of employee commitment and job satisfaction, increasing the company’s reputation before the society’s eyes, as well as oversee the promotion of customer pleasure and loyalty (Ciliberti, Pontrandolfo, and Scozzi, 2008).
The primary aim of GSCM is basically to oversee that the different environmental practices become applied in the various phases of the supply chain from the procurement process of the particular raw materials all the way to the stage of delivering the products to the customer (Tate, Ellram and Kirchoff, 2010). The long-term GSCM goal is then to reduce the amount of waste that is generated at any stage of the supply chain, lessen the amount of raw materials that are used, as well as oversee the sustainable utilization of the resources.
CSR in the Global Supply Chain Management
As studies have depicted, more and more businesses are taking to become highly involves in the firm networks like the integrated supply chains (Matten and Moon, 2008). Regarding integrated supply chain, there is a representation of a network of businesses which are vertically coordinated and engages in different activities which are concerned with the production as well as the distribution of the business’s products to the customer (Matten and Moon, 2008). Following the rising pressure for firms to become good corporate citizens not only in their country but the world as a whole, coordinating a particular global supply chain network which incorporates CSR proves to be rather complex (Anner, 2012) . However, as research has documented, the probability of undertaking irresponsible practices will tend to put these global businesses to offer protection to their brands even when it comes to taking up the responsibilities for their suppliers’ practices (Anner, 2012).
The CSR issues, as well as its coordination in the global supply chain, are of critical importance. However, the challenge that comes about is the particular way a given company will compel its other partners in the supply chain to strive to embrace the practices of CSR in their individual operations (Tate, Ellram and Kirchoff, 2010). According to a different study, companies are continuing to expand their individual CSR responsibility to incorporate the management of the CSR practices of their partners as well in the global supply chain (Tate, Ellram and Kirchoff, 2010). Another contradicting research has documented that other companies are increasingly indulging in the CSR activities of other businesses as a means of reacting to the management of risks (Horvath, 2001). The risk in this regard is defined as the probability for a given firm to suffer the loss or harm following their activities as well as for those activities of their partners who are involved in the global supply chain. Therefore, following the CSR risks, firms may probably be considered to be liable for the utilization of hazardous raw materials, dangerous operations, pollution, as well as the issues of safety and health (Horvath, 2001).
Enforcing CSR in the Global Supply Chain
According to the Danish Council for Council Responsibility, CSR will need to achieve following a comprehensive dialogue among all the partners in the supply chain as opposed to just utilize a firm’s power to influence CSR activities of other partners to undertake these activities (Blowfield and Frynas, 2005). Some studies have agreed to this as they have documented that any form of coordinated efforts between the supply chain decision makers can play a significant role in achieving a common goal of enhancing CSR on a global scale. In the same light, it is widely recognized that CSR is significantly dependent on the various factors which are inclusive of the size of business as well as its individual ability to have an influence on other companies as well (Blowfield and Frynas, 2005). Therefore, it is evident for a company to oversee CSR within itself and other partners associated with it on a global scale, then it will be necessary for it to collaborate with all of these other businesses and partners on the same business concept as well (Blowfield and Frynas, 2005).
Impacts of CSR in the Global Supply Chains
As studies have suggested, through collaborative activities as well as knowledge sharing may lead to reduced levels of uncertainty, enhance their willingness to change as well as minimize the various resistant sources which are typically associated with the failure of investment in the CSR activities (Carroll, 2008). When collaboration concerning CSR activities is enhanced, then there will be reduced packaging, include process changes which minimize the utilization of hazardous materials as well as enable some joint recycling of components and parts (Carroll, 2008). Additionally, research has depicted that there are usually some increased levels of inter-business collaboration which may result in the enhancement in the performance of supplier manufacturing and reduced costs of transactions (Moon, 2007). In the same light, the business arrangements of CSR on a global scale usually tend to increase the competitive advantage of these firms in all their countries of operations which in turn enhance profitability. CSR activities have also been argued to reduce risks, production inefficiencies and at the same time increase its sales and become profitable in the end (Moon, 2007).
Regarding the impacts of CSR in the global supply chains, studies have affirmed that there are also some potential gains in the business performance like the mitigation of reputation risk, cost savings, as well as enhanced market penetration in the international markets (Jenkins, 2005). However, research has not been quite clear on whether the CSR in the global supply chain may influence the decisions of investors. Instead, studies have indicated the product recalls also tend to impact the share prices which in turn impact the investor decisions (Jenkins, 2005). It has also been highlighted that the issues to do with sustainability have led to the focus shift by global businesses from their individual operations towards the enhancement of performance in the global supply chains (Jenkins, 2005). Studies have also affirmed that sustainable global supply chains tend to enhance the productivity of these businesses as well as their levels of innovation. This, as it is argued, can probably be achieved through the evaluation of the processes in the supply chain, up and down, with the aim of increasing material conversion so that they can increase their energy efficiency as well as look for particular ways of converting waste to become beneficial by-products (Markley and Davis, 2007).
According to studies, the business risks can probably be reduced as businesses, through CSR activities in their global supply chains, oversee that the materials that they utilize go towards their processes, products, as well as services and at the same time not pose some safety or health hazards to their individual customers (Markley and Davis, 2007). Additionally, following that the sustainable issues often lead to integrated supply chains, there is a need for businesses to debilitate the impacts of the dynamics of the global supply chains for example the effect of the bullwhip (Markley and Davis, 2007). These firms can do this through the development of some effective information flow as well as material utilization across the supply chain.
The Practical Responses of CSR in the Global Supply Chain
As discussed above, the concept of CSR is typically about the foreign operations which often rise when it comes to the global supply chain management primarily because numerous firms usually source on an international basis (Carter and Rogers, 2008). Some of the main manufacturers who have been producing the goods and products in the foreign nations have for a long time dependent on the global presence so that they can balance their labor costs in accessing to the raw materials or even buffer the currency fluctuations (Carter and Rogers, 2008). In the same light, the CSR issues which are related to the worker relations often entails a broad range of concerns some of which include enforcement of the rights of the works, minimum wage rates, as well as the collective bargaining (Carter and Rogers, 2008).
Implementation of CSR in the Global Supply Chain
Regarding implementing CSR in the global supply chains, there are usually some codes of conduct and ethical principles which usually guide its implementation (Carter and Jennings, 2004). Therefore, the global companies can take to establish a particular code of conduct which will be dedicated to a given framework for the environmental, ethical, as well as the social responsibility. This is because apart from the concerns about brand authenticity and carat weight and such like issues, the consumers also have an additional expectation which concerns safety and health, environmental conservation, and the like (Carter and Jennings, 2004). Various countries and continents like Europe have proposed a framework which tends to offer a holistic approach towards CSR in the supply chains. The primary aim of such moves is so that they can begin adopting global standards when it comes to supply chains in the global scale (Carter and Jennings, 2004). Therefore, while CSR in the global supply chain may significantly avoid some of the risks which are related to brand reputation as well as the negative press which comes from such pressures, the motivation for adopting CSR is still considered to be less important (Carter and Jennings, 2004). The thing that is considered to be highly relevant is primarily the recognition of the gains associated with the approach which is majorly attributed to supply chain management and outsourcing.
The paper has evaluated the aspects of CSR in the global supply chains. CSR is a business concept that is increasingly being adopted by various companies even on the global scale. This is probably because of the benefits that are associated with the implementation of the concept. Some of the benefits of implementing CSR is sustainable global supply chains include enhancing the competitive advantage of the firms on a global scale, environmental protection, optimum use of raw materials, and the enhancement of brand image among other benefits as having been discussed in the paper. The paper has taken to discuss Green Supply Chain Management as an aspect of CSR which mainly focuses on taking care of the environment in the activities of the global supply chain. Some of the other important aspects of CSR on a global scale that the paper has evaluated include enforcing CSR in the global supply chain, impacts of CSR in the global supply chains, the practical responses of CSR in the global supply chain as well as the Implementation of CSR in the global supply chain.
Suggestions for Future Research
Following the aspects that have been discussed in the paper, there are various avenues of research regarding the topic. However, one central area of future research is;
There is the need to explore the tension which exists and continues to grow when between human rights and competitive opportunity concerning the management of the supply chain on a global scale. It is evident that many companies usually turn into outsourcing which they regard as a means of lowering the costs of products and consequently become competitive in the global market (Andersen and Skjoett-Larsen, 2009). However, these advantages in the costs which are usually available from the supply chain typically come through at the workers’ expense within the supplier businesses (Andersen and Skjoett-Larsen, 2009). Therefore, it would be prudent to undertake more research in this area as it impacts on sustainable global supply chains and CSR to try and evaluate how a balance may be developed between human rights and competitive advantage.
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