Examining Supplier Management Practices at Kohl’s

 

CORP3547 Corporate Social Responsibility and Business Ethics

Business and Law

Question 2

Table of Contents

QUESTION 2 3

Introduction 3

Identification of the Supplier Engagement Strategy 3

Strength and Weakness of the Strategy 4

Strength 4

Weakness 5

Recommendation of Alternate Strategy 5

Reason for Recommendation 5

References 6

QUESTION 2

Introduction

Supplier engagement strategy for an organization is the set of regulations for the organization to control the management of the supplier within the organization. Kohls has offered a close observation over the compliance of their supplier and team members with the terms and conditions of the organization. The terms and conditions of the Kohls have been formed in compliance with the guidelines of the ILO, which has taken ethics as the most important aspect for the identification of the strategies (p-49). Guidelines of international human rights have been respected in the organizational operation of Kohl to deliver positive social values, and the same approach has been reflected in the supplier management policies.

Identification of the Supplier Engagement Strategy

Implementation of the Code of conduct has improved the tangible working environment, and Barrientos and Smith (2007) have identified CoC as a strategic move for the organization in managing the supplier engagement with the firm. A clear standard for the supplier has been required to couple them with the rules and regulations. The disobedience to those regulations has created issues for medium to short term might cause the cessation of the contract and management of the supplier to the organization for the sake of the business. Global operation of the corporate has posed a dominance approach and created a set of guidelines to enforce those guidelines for the maintenance of the supplier engagement with the firm. Lund-Thomsen and Lindgreen (2019) have opined that the supplier management to a firm has a focus on the maintenance of the safety standards, hazard management process, as well as on the competitive supply of the skilled labour in the supply chain.

Investigation into the competitive strategies of the Kohls supplier engagement strategy has identified that sustainable resources have been ensured at the facility and production unit for the minimization of the environmental impact of the business operation (p-46). Beckers (2015) has identified that sustainable trade management has been concerned to comply with the code of conducts and safety standards (Which is nearly more than 260 considering all the business aspects) for the best practices. Third-party products supplied to Kohl have been tested under the enforceable laws, and compliance to the “Higgs Index of the Environmental Module” has also been proposed for the suppliers to be followed within 2025 (p-46).

The home and apparel section of the products of Kohls has been instructed to follow the guidelines of the OEKO-TEX for the green product promotion approach through business management. Standard 100 certification system has been implemented for the certification and quality testing of the apparel products at Kohl (p-47). Approval of the products from the supplier has been selected by the level of compliance with the OEKO-TEX guidelines.

Hence the strategy of Kohl in managing the supplier engagement has been formed in compliance with the Ethical standard of supply chain management as proposed by Govindan et al. (2020). Adoption of the safety and security of the workers at the working condition has been ensured as a part of the employee satisfaction in managing the supplier engagement. Terms of engagement to Kohls has strongly followed the ‘Zero Tolerance Policy’ in terms of child labour and forced labour policy as well as in the unauthorized sub-contracting (p-49). Bribery of social compliance has occurred with unauthorized business practices, and Kohls has strongly condemned each form of unauthorized business practice. Attempt to maintain the Customs-Trade Partnership Against Terrorism (CTPAT) has been followed in the supplier management approach of the firm (p-49).

Strength and Weakness of the Strategy

Kohl’s has adopted a strategic move for the improvement of their business performance, maintaining a positive social impact. Both strength and Weakness have been observed in the supplier engagement strategy of Kohls.

Strength

The Zero Tolerance Policy that has been adopted by Kohls can be characterized by the CoC or in the name of ‘arms-length approach, that has a strength in creating the domination of the Kohls on the supplier in maintaining the guidelines for green productions and workplace safety. Crane et al. (2019) have identified that CoC or the compliance-based paradigm has an approach to improve the workplace conditions in minimizing the issues related to minimum wage conflict and workplace health and safety issues. The approach for compliance to the green product standard has created value for the suppliers in maintaining the production and supply process sustainable and environment-friendly. The CoC support and Zero tolerance policy are strong in mitigating the social and environmental challenges related to the supply chain management process (Boyd et al., 2007).

Weakness

Higher degrees of monitoring of the CoC at Kohls has minimized the suppliers’ autonomy that has impacted the bond of trust and commitment of suppliers with Kohls (O’Rourke, 2003). It has some strange negative effect in having the compliance-based paradigm or CoC in having it as a part of the supplier engagement strategy. Yadlapalli et al. (2018) has opined that the manufacturers got an opportunity to adopt the fraudulent activities in emanating the compliance standards, which could result in auditing fraud. Neglecting the local realities, the supplier has considered the CoCs as a matter of imperialism, which impacted the social relations of the supplier firm.

Recommendation of Alternate Strategy

Lund-Thomsen and Lindgreen (2019) have identified that CoC has a major focus on Vertical relations, like the trading and relationship of supply between the buyers and supplier. This reason has created the ignorance of the supplier firm to focus on the local realities. Much attention on the horizontal relations like local socio-economic and socio-cultural have been required to maintain the global value chain in the supply chain of the business.

Reason for Recommendation

Yawar and Seuring (2018) have considered that the inclusion of the Horizontal relations within the business practice and supplier engagement strategy could embed the societal and territorial factors within the business operation of the supplier. The respect for the local norms and guidelines has created values for local society. It could refrain the firm from adopting fraudulent activities. Lund-Thomsen and Lindgreen (2019) have further commented that by undertaking the social and environmental audit of the supplier firm, the fraudulent activities of the supplier firm can be minimized.

References

Barrientos, S. and Smith, S., 2007. Do workers benefit from ethical trade? Assessing codes of labour practice in global production systems. Third world quarterly, 28(4), pp.713-729.

Beckers, A., 2015. Enforcing corporate social responsibility codes: on global self-regulation and national private law. Bloomsbury Publishing.

Boyd, D.E., Spekman, R.E., Kamauff, J.W. and Werhane, P., 2007. Corporate social responsibility in global supply chains: a procedural justice perspective. Long-range planning, 40(3), pp.341-356.

Crane, A., Matten, D., Glozer, S. and Spence, L., 2019. Business ethics: Managing corporate citizenship and sustainability in the age of globalization. Oxford University Press, USA.

Govindan, K., Shaw, M. and Majumdar, A., 2020. Social sustainability tensions in multi-tier supply chain: A systematic literature review towards conceptual framework development. Journal of Cleaner Production, p.123075.

Lund-Thomsen, P. and Lindgreen, A., 2019. Corporate social responsibility in global value chains 1: Where are we now, and where are we going?. In Business and Development Studies (pp. 159-179). Routledge.

O’Rourke, D., 2003. Outsourcing regulation: Analyzing nongovernmental systems of labor standards and monitoring. Policy Studies Journal, 31(1), pp.1-29.

Yadlapalli, A., Rahman, S. and Gunasekaran, A., 2018. Socially responsible governance mechanisms for manufacturing firms in apparel supply chains. International Journal of Production Economics, 196, pp.135-149.

Yawar, S.A. and Seuring, S., 2018. The role of supplier development in managing social and societal issues in supply chains. Journal of cleaner production, 182, pp.227-237.