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How Running an Ethical Supply Chain Will Increase Your Brand Equity.

“Being good is good business”, quoted by Anita Roddick, founder of The Body Shop. Not everyone understands this phrase, nor do they live by it.

Although running an ethical business is required throughout all functions, but the supply chain is arguably the most important function that shouldn’t be taken for granted when it comes to ethics; unfortunately, and as history has shown, time and again we see that companies are losing due to mistakes occurring within the supply chain. Mistakes that were deliberately ignored.

Yes, making profit, having a competitive advantage, being the number one company in the world are all great, but in the end, ultimately our customers are the ones who are taking us to this position. Organizations often fail to understand that a laser like focus on their stakeholders collectively and their satisfaction, will be the path leading to higher long term profit, sustainability and brand equity.

When it comes to supply chain, there should be no justification to jeopardizing quality, no matter how low the risk is. The consequences of taking this risk and hurting just one customer are hard to recover from. Building a brand and a brand image takes years, and it should if that is what it takes to be an ethical company.

The good news, and to many, the bad news, is that customers are becoming more aware and more connected. One unsatisfied customer can bring thousands with them and ultimately bring a business down to its’ knees. Employees too are less threatened or afraid to tell their stories. One employee in a plant in Bangladesh who has been mistreated can start a viral scandal that reaches the world in days.

This reflects the organization culture as well and goes from top to bottom, as a result, contradicting what you are portraying to your customers.

Ideally, having an ethical approach to every business decision will ultimately bring you higher return in the future; maybe slowly but surely.  I would like to see the day where all businesses and supply chains are treated with ethics without the pressure of the law or the power of the customers’ voice.

  • By Danielle on 6.6.2014 at 4:17 pm

    There are some good points in this post. It seems like all of the emphasis in business is on money, but a business needs customers in order to make any profit and employees to make any products. Ethical decisions = happy customers and employees.

  • By Eric on 6.9.2014 at 11:43 am

    It all goes back to Social Responsibility theory. When we see corporations actually practicing it, (like Patagonia’s effort to use materials that leave little to no impact on the environment) it really is wonderfully encouraging!

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