Assume you are a manager of a large heavy equipment manufacturing company. Your
ID: 380784 • Letter: A
Question
Assume you are a manager of a large heavy equipment manufacturing company. Your company currently outsources the manufacturing of a specialized piece of equipment to a firm in another country overseas. The outsourcing of this piece of equipment has saved your organization a considerable amount of money and has increased profits by 15%. A recent newspaper article has revealed that this overseas firm is paying their employees only a few dollars a day, and their employees often work long hours. While you are not the only company that uses this firm, your company was specifically named in the newspaper article. You have been asked by your CEO to make a decision on whether or not to continue to do business with this firm.
Explanation / Answer
In the current marketing scenario , it is important for firms to develop an appropriate relations with suppliers based on ethical norms to survive. In addition to securing an effectual relation between the parties would add to rise in consumer satisfaction with economic & social satisfaction. Firms must understand & manage in a proactive manner their supply chain to prevent damage to reputation by suppliers who operate illegally / unethically. Reputational risks are detrimental to the long-run success of a firm. Supervisory bodies, media, whistle blowers & activist NGOs will ensure that supply chain concerns remain topmost priority for firms & consumers alike. The solution lies in understanding a supplier organization before a firm gets involved with it. Recognizing where the risks lie & knowing about the suppliers’ actions, practices in workplace & its suppliers. Due diligence must concentrate on -:
Keeping the above explanation in mind it is recommended not to carry on business with this organization.