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During a management meeting of a large grocery retailer, the Public Relations Manager voiced her concern over the

companys policy of sourcing from developing countries that have bad records of labour exploitation. The CEO retorted immediately, The reason we are able to pay you so generously can be attributed to this policy. It helps us contain costs thus maintaining our profit level despite the harsh business environment. I do not see anything wrong with a policy that contributes to the well-being of so many parties including employees of our suppliers and ourselves, our shareholders and the governments from whom we import as well as our own government.

Question 1: Perform a stakeholder analysis and give your views on the comments made by the Public Relations Manager and the CEO.

Dear All Heres my stakeholder analysis on the scenario. Step 1 Identify the stakeholders The first step in the stakeholder analysis is to identify the stakeholders. Here we can see that the stakeholders possibly include owners, employees, suppliers, customers, and the local and foreign governments. Step 2 Understand the nature of each of the stakeholders interest The company should try to understand the nature of each of the stakeholders interest. In this scenario, possible interests are as follows:Stakeholders Owners Employees Customers Suppliers Local government Possible interests Understandably, owners would want to keep costs low and manage a profitable business to remain employed with the same or better remuneration access to quality products at a reasonable cost whether they can continue providing materials to the company Expanding local economies Ensure that companies within the country are operating legally and conforming to local laws Maintain economic vitality of their country

Foreign government

Step 3 Assess the companys social, legal, ethical and economic responsibilities to the various stakeholders

The company must assess its responsibilities to all stakeholders. On one hand, the company has to provide an acceptable economic return to the companys owner. On the other hand, what are the companys responsibilities towards employees, customers, suppliers and the different governments? Is the companys social responsibility to the stakeholders affected when they get sources from developing countries with bad records of labour exploitations? The company has to assess all their responsibilities and prioritize them for use to make a decision and develop their strategy. Step 4 - develop strategies to address the stakeholders demands The company should develop strategies to address the demands for the stakeholders. In this scenario, perhaps the company might want to ensure that their supplies come from sources which do not exploit labour. The company may also consider undertaking other efforts to ensure that their social responsibilities towards their stakeholders are met. Step 5 evaluate the effectiveness of the chosen strategies The final step is to evaluate whether the strategy chosen was effective in addressing the stakeholders demands and the companys needs. Whatever strategy the company has chosen, the strategies taken after using a stakeholder analysis correctly should allow the company to make a decision that has the most favourable consequences on its social, legal, ethical and economic responsibilities. As for the comments made by the Public Relations Manager and CEO, I am of the view that the Public Relations Manager has highlighted an important point to the CEO. Being a Public Relations Manager, her duty includes looking out for any practices which may have a negative impact on the public outlook of the company. She is right to highlight to the CEO her concerns on the companys policy of sourcing from developing countries that have bad records of labour exploitation as this policy can be seen that the company supports labour exploitation. However, the CEO do not see this as a problem. In my view, while he is probably right that the policy has helped to contain costs and maintaining profit level, he is not placing enough importance on other aspects of the companys responsibilities. The CEO cited one common factor for all the stakeholders economical benefits. This cannot be the only factor in his decision making as he has failed to look into the social, legal and ethical factors.

Hi all In response to question 2, some suggestions for the company to continue with its current sourcing policy to lower companys costs whilst maintaining a high level of corporate social responsibility are:Have in place ethical principles which do not jeopardise human rights and/or company reputation Ensure that their suppliers in the developing countries operate responsibly within the law and take reasonable steps to verify their compliance

Consider setting up a supply chain in developing countries. This enables the company to have more control over employment practices and also contribute to the development of economic viability of that country.

Uniqlo is an example of a company which source from poor countries but at the same time does not compromise their corporate social responsibility. Uniqlo has approximately 70 production partners in China, Vietnam, Bangladesh and other Asian markets. Uniqlo implement a code of conduct for the production partners particularly those related to factory working conditions and the prohibition of child labour. On top of being involved in charity projects, recycling initiatives, and a policy of hiring at least one employee with disabilities for each of their stores, Uniqlo collaborated with Grameen Bank, Bangladeshs largest microcredit organisation and launched a social business in 2010 called Grameen Uniqlo. Bangladesh is one of the poorest nations in the world and Uniqlos joint venture created a sustainable business with local involvement in the design, production and sale of the clothing. This creates jobs for the locals thus helping the country to develop the economy. You can read more about Uniqlos CSR at their website http://www.uniqlo.com/en/csr/ More information on Uniqlos code of conduct for production partners can be found at http://www.fastretailing.com/eng/csr/business/supplier.html