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Why a sustainable business should be concerned about the nature of its suppliers and their operation?

From a purely business perspective, it would seem that a sustainable business should not be overtly concerned with the nature of its suppliers and their operation, in so far as these are two separate corporate entities. In other words, the supplier is an autonomous entity and thus can make its own business decisions, even in the midst of a contractual obligation with the business being supplied. However, from an ethical perspective, choosing the right supplier seems like a necessary step for the business in question to realize its own objectives, to the extent that a code of ethics is central to the company’s strategy. Namely, the failure to be concerned about suppliers in the case when an ethical code is central to the world-view of the business amounts to a compromise of the business in question’s own vision and thus undermines the corporate strategy in regards to the marketplace and the consumer.

At the same time, from a purely business perspective such a failure to account for the ethics of a supplier can have negative business results, for example, in cases where the business is received by the public in a negative light because of issues with the suppliers, for example, in the case of sweat shops and Nike. Hence, from both an ethical and business perspective, it seems like a failure to assess the practices of the supplier negatively impacts the business being supplied.

However, such responsibility can only extend so far. Accountability, for example, should not be held against the company in question when during the midst of a contract, as mentioned above, the supplier suddenly makes decisions that can be interpreted as unethical. A fine line thus exists between the fact that the business and the supplier are both autonomous entities while also simultaneously existing in the status of a business relationship. Accordingly, ethical evaluations of this relationship must be suited to the precise context of the potentially unethical business decisions made during this relationship, namely, when these decisions were made, and to what extent is the autonomy of one side of the relationship the cause for such unethical practice. In other words, there is no hard and fast interpretive rule to be applied, but a case by case basis seems most appropriate to the dynamic nature of any business relationship.

 

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