What do you consider the ethical decisions that a buying firm should consider in overseas sourcing
What do you consider the ethical decisions that a buying firm should consider in overseas sourcing.
For an organization to achieve its mission, its strategy must address the legal and ethical challenges when planning for business across international environments. Globalization of manufacturing is a consequence of the economic principle of shifting to a location with a favorable lower costs. This trend has led to many of the leading brands to have manufacturing bases in the South Asian countries that have significantly lower labor costs and fluid regulations on labor safety and environmental compliance.
There are several ethical issues that need attention when a company adopts the policy of overseas sourcing. These are listed below:
- Fair trade practices or ethics in local business in the foreign country cannot be assumed to be in place by default. There are several examples of non-democratic, resource-rich countries that have violent and corrupt conditions. The business needs to be mindful of the impact on customers if they become aware of such practices involving the company too.
- Working standards and workplace conditions for the labor that is used in the manufacturing has assumed significance in the light of several accidents arising from poor safety practices.
- Gender equality, workplace diversity, and equal opportunity should be practiced by the supplier in the overseas market. In some cultures, women are not allowed to work outside their homes. However, women-friendly policies that enable women to participate actively in the workforce should be encouraged in a culturally sensitive manner.
- Environmental sustainability is the policy of responsible exploitation of natural resources with appropriate measures for rehabilitating and regenerating the natural environment through active and ongoing community efforts. The overseas supplier should have a good track record in this respect as otherwise the customers are bound to reject the product.
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