Ensuring Safety in Supply Chains: A Review of Literature and Strategies for Ethical Procurement in the Garment Sector

This presentation discusses the importance of ensuring safety in supply chains, particularly in the garment sector. It reviews relevant literature on stakeholder theory, the three domain model of corporate social responsibility, and transformational strategy of sustainability. It also provides strategies for ethical procurement in the garment sector and suggests a media strategy for promoting corporate social responsibility.

E N S U R I N G S A F E T Y I N S U P P L Y
C H A I N S
Introduction:
The global garment sector is a billion dollar industry which spreads across the globe. As per the Myanmar Times, the garment sector involves
countries of Asia, North America and Europe. The main markets producing garments are in Asia while the main markets demanding garments
are Europe and North America. Moreover, Asian markets like China are also experiencing rise in demand for finished garment products
(Mmtimes.com 2018). Africa is also developing into a important garment market (Worldbank.org. 2018). The companies having their
headquarters and manufacturing units in developed markets like Australia and Europe source their raw materials from manufacturing units
situated in Asian markets like Bangladesh and Cambodia. Thus, overseas supply chains today play significant roles in the garment sector. The
garment companies are thus ethically and obliged to ensure safety of the employees employed in their supply chains.
Review of relevant literature
Stakeholder theory:
Stakeholders’ theory mentions that the business organisation must function in the market so as to protect the interests of the stakeholders.
Mitchell et al. (2015) mention that business organisations should be accountable to their stakeholders while forming business strategies and
operating in the market. Tantalo and Priem (2016) support this view and go on to point out that the stakeholders of business can be both
internal and external. The internal stakeholders consist of management of the organisations and employees. The external stakeholders consist
of governments,international organisations like the UN, suppliers,financial institutions, legal bodies like courts,investors and customers.
Harrison, Freeman and Abreu (2015) points out a new aspect of stakeholder accounting. They opine that business organisationsshould be
ethically responsible to their takeholders and should not commit any action that hampers the interests of stakeholders. Alexander et al. (2016)
adds to the discussion that engagement of stakeholders are not only important as far as ethics are concerned but also in order to achieve
sustainability in the market
The three domain model of corporate social:
responsibility
The three domain model of corporate social responsibility proposed by Schwartz and Carroll (2003) mention three areas in which corporate
social responsibility of business organisation need to consider namely legal, economic and ethical. The Venn diagram of the model shows that
business organisations should ensure that their business operations are legal and do not breach the laws of either their home countries or their
host countries. For example, the garment industry companies should ensure that their operations like acquisition of finished goods and raw
materials are acquired in legal ways. Huq, Chowdhury and Klassen (2016) adds to this opinion that business organisations operating in the
garment industry should ensure their sources of finished goods does not tantamount to exploitation of workers. Wilhelm eta l.(2016) contradicts
this opinion of Huq,Chowdhury and Klassen (2016) and point out that in reality there is rampant exploitation of workers in the supply chain of
garment companies. This analysis shows that the though according to the three domain model, business organisations are expected to operate
legally but in reality they resort to exploitation of supply chain workers to get more supplies of finished goods. Yawar and Seuring (2017) that
business organisations in the every industry including the garment industry operate in the market operate to earn more profits which is their
economic goal. The need to more profits to higher returns to shareholders and boost their operations often lead firms to indulge in illegal
activities like exploitation of workers. Sewwandi and Perera (2016) contradicts this statement and point that exploitation of workers leads to
burnout and ill health among workers. This leads to high worker turnover which hits the productivity and hence the revenue generation of the
business organisations. This fact reinstates the opinion of Huq, Chowdhury and Klassen (2016) which mentions that companies should abstain
from implementing exploitative measures on employees to earn more profits. This third aspect covered by the three domain model is ethics. Tai
and Chuang (2014) mentions Business organisations besides operating in legal should also operate in ethical ways.
Transformational strategy of sustainability:
The business organisations should use transformational strategy to obtain sustainability. Kazmi (2017) mentions that transformational strategy
of sustainability has four phases namely, engaging, accelerating, leading and transforming. The first stage of implementing of transformational
strategy of sustainability is engaging stakeholders in the process. Shen (2014) point out that business organisations like garment companies
should involve their stakeholders to gain sustainability. It can be pointed out that employees engaged in the firms forming parts of their supply
chains contribute towards ensuring timely supply of orders. Freise and Seuring (2015) point that gaining sustainability in the industries like
garment industry would require involvement of the supply chain workers as well. This involvement of stakeholders like supply chain workers
would accelerate transformational sustainability in the garment industries. The companies sourcing garments should ensure that the supplier
firms maintain safe and secure working environment to ensure safety of workers. The major garment factories should lead sustainability in the
garment sector by forcing their suppliers to ensure sustainable human resource management. Hammer et al.(2015) in this respect mention that
adoption of sustainability through the supply chains would boost the overall sustainability of the industries like garment industry.``
Development and implementation of ethical supply chain procurement in garment sector:
The garment sector companies are taking stringent steps to develop and implement ethical procurement in their supply chains. It can be pointed out
that this implementation of ethical standards in the supply chain are largely takingplace in the garment sector due to imposition of policies by
international organisations like the European Commission. The international body has laid down policies in order to mandate garment sector
companies to abide by ethical and legal frameworks while sourcing materials from their global supply chains (Ec.europa.eu. 2018). The Parliament of
Australia ( Aph.gov.au. 2018). The international garment sector companies in order to exhibit their compliance with the laws formed by governments
and international organisations, are taking serious steps to ensure that their supply chains are sustainable and free from exploitation of workers. This
fact is evident from the governance structure of the leading British designer retailer Marks and Spenser. The internationally reputed fashion company
buys products from around 2100 suppliers and from 20000 farms. This means that its supply chain spanning across 70 countries employs thousands of
labours. The firm in order to ensure strict corporate governance and prevent modern slavery has formed a four layered strategy under the M&S Group
Baord. The strategy encompasses all the departments right from food, logistics, marketing, international, retail, HR and IT
(Corporate.marksandspencer.com. 2018). This means that Marks & Spenser is determined to take actions against slavery and exploitation of workers.
It can also be pointed out that M&S follows the three dimensional CSR model proposed by Schwartz and Carroll (2003)
Ethical procurement strategy:
Australian textile company mentioned in the case study should adopt ways to ethically procure raw materials and finished goods. The
firm should ensure that its suppliers are not involved in any sort of exploitation of workers. It must put ethical pressure on the supply
firms toe nsure safety of their employees. It must train the employees of the suppliers with safety training which would enable them
to avoid accidents. The textile firm sources raw materials from Asian markets which clearly indicates that it is financially strong
(Hammer et al.2015). The firm can also provide financial help to its suppliers to improve their working conditions and
infrastructure.re.
Media strategy:
Promoting CSR of the company Holding evnets to spread awareness about slavery in supply chains of garment industry. Releasing
anti-slavery videos on social media sites like Facebook and Instagram handle of the company
References:
• Alexander, K.A., Angel, D., Freeman, S., Israel, D., Johansen, J., Kletou, D., Meland, M., Pecorino, D.,Rebours, C., Rousou, M. and
Shorten, M., 2016. Improving sustainability of aquaculture in Europe: stakeholder dialogues on Integrated Multi-trophic
Aquaculture (IMTA). Environmental Science & Policy, 55, pp.96-106.
• Freeman, R., Harrison, J., Wicks, A., Parmar, B. and Colle, S. 2007. Stakeholdertheory.org. [online] Stakeholdertheory.org.
Available at: http://stakeholdertheory.org/team/r-ed-freeman/ [Accessed 10 Oct. 2018].