1. Ethics & Supply Chain Management: General Motors and Nike
Business Ethics
Ethics & Supply Chain Management: General Motors and Nike

2. Whose Responsibility? Dominant Firm
in the supply chain should be responsible for the ethical conduct of its suppliers
Why?
The most powerful value chain member bears the greatest burden of responsibility
‘With greater power comes greater responsibilities’
Examples in this case: Nike and GM
How?
Identify & develop suppliers whose policies & values mirror their own
Able to influence supply chain due to its relative size & buying power
Willingness to end relationships/contracts with unethical suppliers or repeat offenders
Move from traditional SC sustainable SC
Includes environmental, social & ethical issues
Reference: Phillips & Caldwell, Value Chain Responsibility: A Farewell to Arm’s Length

3. Sustainable Supply Chain Management
Environmental Issues
Natural resource use
Emissions, waste
Energy loss
Use of biodiversity & deforestation
Nuclear radiation
ozone depletion
climate change
Social Issues
Role & responsibility with local community
Direct & indirect employment in developing countries
Investment in education & training
Ethical issues
Labour practices (child labour, discrimination, wages, unions, working hours, health & safety)
Irresponsible marketing (marketing to children, misrepresentation)
Supporting oppressive regimes
Honesty, trust, respect & fairness in corporate relations
Bribery & corruption
Source:

4. GM’s Gift Policy Positives: Negatives:
Minimizes opportunities and sets expectations
Facilitates unbiased business decisions
Provides guidelines and examples
Outlines process to handle exceptions
Applies universally across the company
Negatives:
Grey areas: Applicability not always clear
Makes exceptions in certain cases depending on business interests
Adopts a relativist stance – leads to inconsistency
Difficult to distinguish expected social courtesy from bribes

5. GM’s Gift Policy Does this policy do enough to Ensure ethical conduct?
It is an important means of promoting ethical conduct, but…
A policy by itself cannot ensure ethical conduct.
Other aspects are essential: Training, education, culture, environment, leadership
Ultimately, each employee is entrusted with the responsibility for ethical conduct

6. Nike Goes Green
Starting in 1993, Nike has made big efforts to “green” its supply chain.
It began using best practices and demanded the same from its suppliers. It educated them on:
Corporate environmental policy
A master substances list
Legislation concerning products and packaging
Executive summaries on all programs so factories know which programs apply to them
A sustainability assessment
Labor practices programme information

7. Questionable Labour Practices??
Although Nike educates its suppliers, it has had to contend with allegations of at least one account of a subcontractor using sweatshop labour.
This has sparked much controversy and large boycotts of Nike’s shoes
But, Nike has made huge strides in environmental awareness…

8. Does one Good Act Balance a Bad One?
There is no way one “right” can make up for a “wrong” - this is a form of rationalization.
Nike has had to deal with issues facing many MNCs and it needs to lead by example.
Inappropriate labour practices can never be balanced by a sound environmental policy.