Global Sourcing Challenges

Introduction:

Corporate social responsibility is the ethical, moral and social responsibility of the organisation, which is beyond the organisational profit and legal obligation. This assignment is going to highlight the CSR of Toms, the US-based for-profit shoe-making organisation, which has the philanthropic business perception to help the poor community. Moreover, this assignment will identify the advantages as well as disadvantages of sourcing its product from China, Haiti, Kenya and Ethiopia. Finally, this assignment would also analyse the acceptability of using sweatshops by Toms by critically evaluating different ethical theories and moral approaches.

Question 1:
Corporate social responsibility:

Corporate Social responsibilities are considered as the social and ethical responsibilities that a business have beyond its obligations, legal functions and organisational profit. Through CSR, a business can represent the perfect linking between their ethical outlooks and the responsibilities in terms of community welfare and social development.

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Requirement of CSR for business:

The reason why each business needs to have CSR can be represented by different viewpoints. As stated by Kim et al. (2017), CSR is important for businesses to uphold their values, fairness and partnership with the stakeholders. On supporting this viewpoint, different sociologists have mentioned that CSR is important activity as well as the responsibility that provide the business with opportunities to maintain the healthy and safe working environment for maintaining the environmental sustainability and developing the hygiene condition in a community. Through CSR, a business can strive to enhance their value proposition to customers thereby adhering to their promised standard of the service delivery (Pino et al. 2016). Toms, the US-based For-profit Company; prioritises the corporate social responsibilities in terms of conducting the social development and community welfare. Unlike the other shoe retailer who spends most their fund in advertising, Toms spent a sheer among of their fund on giving. Therefore, CSR is one of the important activities for Toms, which not only represent its brand reputation but also the holy intention of the marketers beyond the market profit.

Carroll’s account of four dimensions of CSR:

In this aspect, Carroll’s notion represents the different dimension of the CSR that affect the activity and business decision of organisation. As stated by Carroll (2015), there are Carroll’s four dimensions of CSR arrangements, which range from the very low to very ambitious. Carroll developed a model, which is pyramid shape and represents the four dimension of CSR such as Economic responsibilities, legal responsibilities, ethical responsibilities and philanthropic responsibilities.

At the base of pyramid, Carroll represent the economic responsibility of business which is based on ethical obligations of eth company to make money for meeting the economic requirement of all staffs as well as stakeholders. Legal responsibilities are represented at one-step up of eth economic responsibilities in Carroll’s model. This responsibility is based on the legal liabilities of businesses that they need to obey as well as implement at their business framework to meet the fundamental legal needs of stakeholders. On the third rung up in this pyramid, Carroll represents the Ethical responsibilities of business. These are the type of responsibilities that fall beyond the market profit and scope of organisational regulation and legislation. As stated by Suliman et al. (2016), this dimension of Carroll's model is important for each business for thinking beyond their organisational boundaries to support the social responsibilities and community welfare. At the pinnacle of Carroll's pyramid model, there are philanthropic responsibilities. As stated by Carroll (2015), the word philanthropy is sometimes misleading with imperative responsibilities. However, the philanthropic responsibilities represent the love of humankind that the businesses apply to provide the ultimate happiness as well as wellbeing to others. As stated by Schwartz (2017) philanthropic responsibilities can be expressed by the generous donations and economic support to the people in need.

Economic, legal, ethical and philanthropic responsibilities of Toms

In the case of Toms, it maintains all the four dimensions of Carroll's Pyramid model. Based on the concept economic responsibilities of a business, it can be stated that, although Toms prioritise the social development and community welfare as their main business aims, its ubiquitous campaign one-for-one’ is one of the best advertisement of its brand value and product quality. Through its message to help the poor children by donating a pair of shoes, gets millions of hits with youngsters that raise its sales and market profit. One for one campaign and Toms potential strategy to donate the excess fund in need of poor people rather than spending on advertisement, attract as well as influence several retailers and global market leaders in the international market. As stated by Tai and Chuang (2014), although the donation and charity is good market policy to aware people and global market leaders about the particular brand, it has limited options to get the economic profit. However, in case of this statement cannot be applicable, as the donation, social campaign and helpful collaboration with the local marketers, provide the company with the economic as well as social reputation. As a result, it does not limit its business to shoe marketing rather it expands the business in Toms Eyewear that donates the pair of glassless to needy people, Toms Coffee and Toms bags.

In order to maintain and follow the legal responsibilities, Toms marketers focus on operating their business in a systematic manner that will abide by the government rules and regulation. Through their product recycling and manufacturing process, they maintain the environmental sustainability to meet the guidelines of the National Environmental Policy Act (NEPA) (1869). Toms always follows on improvement the guidelines of acts that are associated with pricing, warranties, refund and social donations. Al their donations and funding are listed with proper governmental documents. Toms follows the code of conducts for maintaining the systematic work culture as well as a business framework in its office. Moreover, it goes through the proper legal procedures, in terms dealing with licensing, registration and permissions.

In order to discuss the ethical responsibility of Toms, it is important to mention the activities performed by this company beyond the scope of legislation and regular in terms of supporting the needy people. According to Carroll (2015), Carroll is a realist who describes the ethical; responsibilities as social norms that consists of a series of expectations from the groups such as organisations, societies and sectors. Toms performs its ethical responsibility only through eth donations to humanitarian societies but also through cleaning water, maintaining hygiene in society, saving birth and developing the life standard of eth poor people.

A philanthropic responsibility is one of the important CSR dimensions that Toms is performing. Toms follows on the philanthropic perception, which is associated with helping needy people as well as developing their life standard. The One-for-one campaign is one of eth important philanthropic moves of Toms for donating a pair of shoes to poor children who cannot afford the shoe. Toms has already donated 35 million shoes to poor children which represent its, humanly and love of humankind. By helping the poor children, expecting mothers and poor society members, Toms establish its well knows the position on eth international market as one of the most popular for-profit organisation. According to Ehie (2016), philanthropy sometimes is beyond the social expectations; it does not even need to be desired by the society. In these aspects, some charitable moves of Toms are controversial in the market such as its donation of paired shoes, glasses and birth kit to young mothers. Some of the business and economist think that Toms apply this donation strategy to establish their brand awareness in front global market leaders. Beyond all this argument, if analysed with the realistic point of view, Toms has efficiently performed their philanthropic responsibilities, which not only change the life of poor children but also influence the retail marketers and global leaders to support the social development.

The most important dimension of CSR for Toms:

From the above discussion of the four CSR dimension performed by Toms, it can be concluded that the most important dimension for Toms is philanthropic responsibility. From the above analysis, it is seen that Toms prioritise the philanthropic dimension in terms of dealing with their business operations. Toms had kept the society need and community welfare at the centre of their business framework. All their marketing strategies and business decision end with the approach to support and help poor people and needy children. The philanthropic activities of Toms do not end with the charitable work; rather it is associated with job creation in developing countries like China and India by opening their branches. By flashing off all the criticism on each business move of Toms, it provides the platform to several humanitarian organisations and NGOs to assist poor people in the community. Toms has also taken important steps in saving, water, environment sustainability maintenance, saving birth and developing consumer awareness. The One for One campaign to provide free shoe to poor children and the birth-related campaign to provide the pregnant mother with the birth kit are two important generous activities of Toms that represent its love of humankind. Therefore, it can be stated that, behind each business move, Toms prioritise its philanthropic approach towards the community welfare.

Question 2:

From the given case study, it can be seen that Toms sources its shoes from different developing and developed countries such as China, Kenya, Ethiopia and Haiti. There are some advantages as well as disadvantage of this transnational business practices. As stated by Pongelli et al. (2018) international trade and foreign direct investment are associated with different aspects such as cross-border flow, global value chains and outsourcing as well as offshoring.

Global value chain:

Global value chain affects the basic points such as goods, manufacturing process and the service that is purchased (Kim et al. 2018). In case of the Toms, the shoe comes from the suppliers of China, Ethiopia, Haiti and Kenya. Toms source its product from the manufacturers in these developing countries to strengthen the international business relationship with them.

By sourcing the products such as shoe from China, Kenya and Ethiopia, toms can lead to job creation in these countries which improves its brand reputation and global awareness The value chain network that Toms uses by sourcing it product from overseas countries assists Toms to encompass the variety of nations to improve the versatility in their product and service range (Pongelli et al. 2018) By sourcing the China-based shoe manufacturing business, Toms can assist the local marketers in this country to support the humanitarian societies to help the poor children (Mitchell, 2015) By applying the global value chain process, Toms can assist its trading expert to accelerate the manufacturing upgrades and drive up the supply chain reform
Through this process, Toms can perform the worldwide series of activities beyond the sourcing from the China, Ethiopia and Kenya, that will assist the trading expert and marketers of this brand to support the community development There are various different disadvantages associated with this global value chain process. Toms can face different disadvantages regarding the global value chain process during the sourcing from overseas countries. Value chain process in the international market will pose several market competitions on the Toms. Although this process will assist Toms to deal with the global business range, it develops several market threats on the Toms.
One of the important disadvantages of this value chain process that Toms dealing with is it will take huge time to implement the global value chain process. Toms also face some problems regarding the suppliers, dealers, labours and creditors.

Outsourcing and off sourcing:

Outsourcing is referred to as the process in which organisation include the third p[arty in order to do the proper business operation (Mitchell, 2015). On the other hand, the offshoring is considered as the getting the business activities done in the foreign countries. In this aspect, Toms opens its branches in the six developing countries. It sources its products from China, Kenya, Ethiopia and Haiti. In this aspect, the advantages that Toms deals with the offshore business which assist the marketers to deal with huge range product and market opportunities. Through involving the local marketers of the China, Ethiopia and Kenya, Toms has established the possible outsourcing in its business. Through off souring business with these developed as well as developing countries, Toms not only meet the business needs but also performs the different business activities efficiency. Through this outsourcing and the offshoring process, Toms get the possible advantages:

Advantages:

The cost advantage is one of the important benefits of eth outsourcing which Toms has gained by involving China, Kenya and Ethiopia as the outsourcing agents Through offshoring, Toms is able to improve its different activities such as human resource, CSR, manufacturing, customer satisfaction, accounting, finance and security By sourcing the products from China, Kenya and Ethiopia, Toms can develop the in-house expertise for different activities which leads to develops of quality of its products and service Labour flexibility is one of the important benefits of outsourcing, through which Toms can acquire different efficient labours from the overseas market such as China and Ethiopia in a cheaper amount to meet its organisational targets Through the process of off-shoring by establishing the relationship with overseas countries such as China, Ethiopia, Haiti and Kenya, Toms can reduce their manufacturing cost by hiring the raw materials, labours, stakeholders and managers at a lower cost.

Disadvantages:

With all these advantages, Toms can face several disadvantages during the offshoring and outsourcing process: Toms can face the project failure that not only affects the overall business process but also affect eth business reputation of the company. As stated by Gereffi and Fernandez-Stark (2016) political unrest and different governmental policies also affect the overall business process. in this aspect, Toms can face the tax burden, different legal obligations and strict business act in overseas countries. Lack of familiarity in the clients business can also be another important disadvantage for Toms.

Question 3:
Sweatshops and its ethical acceptability:

Sweatshops are referred to as the business that that offers the employment practices which I associated with different law breaches, low wages, child labour, forced overtime, abusive management and health and safety violation. As stated by Mudambi and Puck (2016) sweatshops can be considered as the workplace where workers are exploited to extreme abusive condition, poor working condition and arbitrary discipline. In the case of Toms, the company is based on the philanthropic dimension of CSR, which is against these organisational bullying, exploitations, mismanagement and child labour. Rather it is based on the healthy as well as the supportive environment, which support the child needs and develop the community welfare.

Ethical acceptability of the sweatshops is a highly controversial matter. It is acceptable that the working conditions in the sweatshops are utterly unpleasant and demotivating. For discussing the ethical acceptance of Toms in opening up sweatshops, it is important to analyse the following ethical approaches:

Cultural relativism:

This approach is based on fact that what is accepted and legal in open culture that can be illegal and unaccepted in another culture this is called cultural relativism. Based on the strongest perception of the cultural relativism, if sweatshops are the ethically accepted workplace in a particular country, then for Toms can make use of sweatshops in that country. As stated by Kim and Werbach (2016) this concepts states that certain countries might accept some practices of sweatshops rather than the others. Such as in the case of the developing countries such as China and India, a majority of the people are unemployed and economically destroyed. In these countries, toms can create new job opportunities by opening up sweatshops. However, there are certain controversies in this viewpoint. Based on this point, either Toms has to dismiss the way in which it is treating the home country or it will condone the unpleasant, unethical norms that are allowed in overseas countries. For example, in home country, US, Toms cannot employ the child labours in sweatshops or it cannot employee slaves at the very low wage, as the minimum wage standard is high in the US. On the other hand, in developing countries such as China, Ethiopia, Haiti, India and Kenya, Toms can offer new jobs to children and slaves at the very low wage, which can eliminate the children starvation and meet the basic needs of the people.

Righteous moralist

This approach makes the direct contrast to the previous approach. It demonstrates clearly that if sweatshops are not acceptable in the home countries then it can be ethically accepted in the other countries. Based on this perception, Toms cannot develop the sweatshops in its home countries as well as in other countries.

As stated by Phau et al. (2015), this approach is highly important for the business that guides the marketers directly in one particular way rather than providing confusing ways. Based on this perception, Toms should not open Sweatshops in the home country as well as in other countries.

Moral universalist

This approach is important that stated that when working conditions are against the universal moral norms they could not be morally accepted (Phau et al. 2015). This approach is based on deontological theories, Toms needs to focus on the fact that which matter can be morally acceptable and which are not. For example, the long working hours can be deemed accepted as per the nature of the organisational target, but the unsafe and abusive working condition cannot be ethically acceptable. Therefore, trading agents and marketers of Toms need to focuses on the different matters such as low wage, child labour and long hours to determine whether they are ethically accepted by the country where they are working.

Moral consequentialist

Moral consequentialist is less clear perspective in comparison to the other perspectives. Based on this approach, moral acceptance of any aspect is based on the consequence of the situation. In this aspect, Toms needs to consider the consequence of the working process and organisational framework of the sweatshops to analyse its acceptability. If the existence of sweatshops is positive then Toms can use the sweatshop. However, consequences of the sweatshops are negative then it is not acceptable. In this aspect, Khan et al. (2016) argued that moral consequentialist viewpoint has the problems of consequent measurement. In the case of sweatshops is that Toms can face the unpleasant and unfavourable working condition that will generate the negative consequence. The long working hours is management, abusive working environment and misunderstanding between the manager and employee in the Sweatshops will represent the unpleasant as well as negative working condition. Sometimes the sweatshops are acceptable in one part of the country on the hand the sweatshops are not acceptable on the part of the country. Therefore, it is important for Toms to understand the acceptance of the sweatshops in the country.

Naïve immoralist

Naive moralist view denies the relevance of morality with the acceptability of sweatshops. Based on this perspective, if through opening up sweatshops, Toms are able to reduce the cost, create jobs for poor and increase the organisational profit that they can utilise to invest in social development as well as poverty elevation and then the use of sweatshops is acceptable in any country. On the contrary, Phau et al. (2015) argued that moral values and ethical considerations are associated with the work consequences in case of sweatshops. As per this concept, sweatshops are associated with different law breach and unethical aspects that can affect the mental and physical status of stakeholders in a negative way. However Naive immoralist viewpoint strongly argues with the fact by stating that, morality sometimes goes against the practical aspects of social, economic and environment issues. On supporting this viewpoint, Balsiger (2018) stated that Naive immoralist focuses on the fact that, if sweatshops are able to generate positive social, economic and environmental development, then it can be acceptable to the society. For example, although sweatshops opened by the Toms would apply long working hours and strict management condition, but it will develop huge number of job creation in the developing countries such as China, Haiti and Kenya. In that case, the development of the sweatshops can be acceptable.

Business ethics theory:

Ethical aspects are associated with the way in which a business is operating or working (Schlegelmilch, 2016). It is important for Toms to consider the different ethical aspects that are associated with the business in terms of opening sweatshops. It is important for the business leaders to consider different business ethical approaches in terms of analysing the ethical acceptance of any business
Teleological ethical approach focuses on consequences of actions that will decide whether the business is working in the right direction or not. Based on this aspect, the consequences of sweatshops in case of Toms have unpleasant consequences such as unpleasant working condition, mismanagement, abuse and arrogant management team. In this aspect, it is important Toms need to develop better management and well-organised working condition in sweatshops to eliminate these negative business consequences. According to Khan et al. (2016), deontological approach deals with the actions, which are morally right, can be acceptable in the country. In this, accept the use of sweatshop by Toms cannot be ethically accepted based on the business framework and approaches that are against the moral norms.
Virtue Ethical theories or approaches are based on the fact that, characters determine the ethical value. Characters can be referred to as the inclinations, intentions and virtues that can interfere with the professional behaviour of person. For maintaining the acceptability of sweatshops in developing countries, Toms needs to set positive behaviour and motivating characters of its staffs and manager to improve the workplace environment.

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Conclusions:

From the above discussion of these there answers, it can conclude that corporate social responsibility is beyond the market profit and legal limitations of the organisation, through maintaining the CSR in eth organisation, Toms marketers are involved in improving the economic, social and environmental status in the community. Moreover, this discussion also concludes that sweatshops are workplace, which deals with long working hours, mismanagement, abusive working condition and highly tight work schedule. There are different ethical theories regarding the acceptability of the sweatshops. Therefore, Toms needs to focus on analysing the various ethical aspects before using the sweatshops.

Reference list:

  • Balsiger, P., 2018. Explaining Dynamic Strategies for Defending Company Legitimacy: The Changing Outcomes of Anti-Sweatshop Campaigns in France and Switzerland. Business & Society, 57(4), pp.676-705.
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