An investigation of the drivers and key success factors of implementing supplier code of conduct

Abstract

With the increase in alarming incidents such as product recalls, suicides of workers, fires in manufacturing plants and non-payment of fair wages, the importance of effective corporate social responsibility (CSR) as practiced by global manufacturers is becoming fairly crucial. These examples have shown that an end-to-end supply chain wide focus is needed. For instance, the recall of toys by Mattell on account of excessive paint in their toy line took a serious turn in that the company had to deploy both upstream and downstream practices to ensure that this problem was fixed. In the facility of Apple’s key contract manufacturer, Foxconn, the media isolated deplorable living conditions and long working hours of its employees. This led to a series of suicides by workers who were unable to cope with the stress of long working hours. There were at least two devastating fires in textile factories in Bangladesh and in both instances, there was a big lacuna in the form of lack of adequate security measures. As these two textile plants served global players such as Marks and Spencer, Gap and the Limited, there was consistent pressure by the stakeholders of these companies to take broader measures including setting standards, monitoring against these standards and providing training opportunities. Finally, there are frequent reports of abuse of worker rights to fair wages in the construction industry and other industries by companies operating in the Middle East.