Ethical supply chains: analysis, practices and performance measures

Abstract

Ethics has been studied in numerous disciplines and its application to various practices has been investigated over the years such as in medicine and law. This has been relatively recently extended into the business arena, and has become a matter of growing interest for many companies. It has led to questions concerning what constitutes ethical behaviour, to what extent ethical practices should be adopted and what benefits a company may derive from its adoption. There are numerous processes involved in the transformation of a product from source to consumer, and these must be managed to produce an optimal balance of business requirements, specifically profitability, and a consideration of the wider impacts they may have or make. The supply chain has become vital to organisational success that companies now compete as supply chains rather than as individual entities. Therefore the ethical conduct of the supply chains has also begun to be scrutinised, both from an internal business performance perspective, and from the increasing concerns held by the numerous stakeholders of the organisation. In light of these developments, this paper explores the notion of ethics as it applies to supply chains. It also examines supply chain ethical practices and demonstrates that there is an empirical relationship between ethical practices and performance. The results show that ethical practices have positive impacts on the performance of the supply chain.