Corporate Social Responsibility (CSR) is a model used by businesses for self-regulation to ensure they are socially accountable to stakeholders, the public, and themselves as businesses. This concept has become more pervasive and earned acronym attributes in the circles of interaction. It focuses more on holding business enterprises accountable for their operations and actions. CSR is essential to the company since being a socially responsible company reinforces its image and builds its brand. It boosts workers’ morale and leads to improved productivity and performance in the workforce. It warrants employees to leverage the corporate resources at their disposal to do well.
Issues companies might encounter when trying to implement sustainability initiatives and live up to CSR goals
While CRS is a critical issue in most businesses, implementing and living up to its goals is challenging. The main challenges involved in implementing corporate social responsibility in the supply chain include buyer-order pressures, lack of consistency in the buyer implementation strategies, presence of non-questioning business culture, and absence of self-contained and supporting organizational culture. When it comes to buying and selling, some firms are too concerned about following other firms’ codes of conduct instead of developing their standards to use in CSR implementation. Many suppliers depend on the buyers to dictates their operation management instead of performing a self-driven performance. Dependency is a weakness that is inherent in the business culture that implements CSR goals.
Other challenges that are prevalent in global supply chains include firm-specific barriers such as lack of enough resources, knowledge on how to go about it, lack of finance, expertise, and human capital. Besides that, industry-specific barriers like low willingness to pay for CSR are a big challenge. Lastly, a lack of consensus between the local agencies involved in CSR implementation leads to duplication of CSR projects, making them hard to accomplish. These issues make it difficult for business enterprises to realize the benefits and competitive advantages associated with effective CSR, such as brand recognition and the ability to retain existing customers and attract new prospects.
What does the following quote mean? “Abuses in the supply chain are complex, not black and white.”
This quote means that the supply chain is complicated. Various people involved in the supply chain face different challenges, either directly or indirectly. Since the chain is a hierarchy, the people in the lowest rank of the supply chain are the ones who get exploited, yet they’re the ones who do the most significant job. Though many people might not see it this way, it is the reality in the supply chain, making it complicated.
An example of an abuse case in the supply chain is farmers, especially those in developing countries. When they acquire a loan for maintaining their farms, they gate it at the rate of 18-37%, whereas in wealthy countries, the rates are about 8%. When selling their products, they are paid a small amount of money. As a result, the whole sellers and processors are the ones who benefit most instead of the farmers meaning the farmers are the ones being abused.
How Companies Should Address Global Supply Chain Abuse
When such issues are encountered in the global supply chain, companies need to come up with ways to address the issue. One of the solutions would be identifying trustworthy suppliers who share the same ethical practices. Before embracing an honest supply chain, organizations need to identify partners who can be reliable. Organizations also need to digitize their supply chains. Embracing digitization will help the organization reduce the amounts of counterfeit in the chain, especially the ones entering through the aftermarket sector, and prevent paper-based supply chain documents. Another solution is to secure trading partnership relationships. It will help in minimizing risks among the trading partners and increasing trust across the trading partner relationships.