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Unit 3 DB The Ethical Cost of Doing Business Debate

Unit 3 DB The Ethical Cost of Doing Business Debate

Q Detecting unethical practices at supplier factories, to include monitoring and compliance, is a major challenge to say the least. Yet, wages drive costs and it’s an absolute necessity to maintain the lowest cost in production of any good. Or is it? This week focus on debate! Start or select a fellow student's side, and either support or argue against that position, but be constructive in your approach. Employ teamwork! Discuss how important is it for companies, such as Nike and Wal-Mart that source extensively from foreign suppliers located in countries where wages are low and substandard working conditions are common to institute supplier codes of conduct and undertake programs to monitor and ensure supplier compliance with these codes of conduct? Would you recommend that a company join the Fair Labor Association and use FLA’s standards and program of factory audits instead of trying to set up its own supplier monitoring and compliance effort? What can a company do to detect and combat the efforts of unscrupulous foreign suppliers to deceive inspection/compliance teams?

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Supplier compliance has to be ensured by big brands because there cannot be compromise shown on the quality of the finished products. Otherwise, the trust of the customers will be difficult to be regained once lost because of lack of supplier compliance. Therefore, the institution of supplier codes of conduct must be done mandatorily so that price and quality can be standardized by big brands. An example of an organization facing consequences because of lack of institution of supplier code of conduct had been Toyota because of losing market share of the targeted customer-segments (Maynard & Tabuchijan, 2010).