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Unethical Supply Chain Behaviors

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Jennifer Edmonds, PhD

on 14 June 2015

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Transcript of Unethical Supply Chain Behaviors

Union Carbide Disaster
PLAN
SOURCE
MAKE
DELIVER
RETURN
think about the activities involved in PLANNING the Supply Chain...
http://blog.brookoflife.com/2009/08/is-outsourcing-unethical/
This blog engages a discussion of sending jobs overseas (to take advantage of low labor costs) at the height of rising unemployment rates in the US.
There is a lot of discussion on this topic, but very little agreement. I actually agree that outsourcing can be good for some companies...but when millions of jobs are lost and sent overseas, greed seems to be the motivating factor. When corporate greed is the motivator, and not increasing output value in some way, an ethical battle ensues.
Dr. Edmonds
MAKE is defined as production of goods or performance of a service.
RETURNS can also include activities pertaining to the processing of complaints (not just the ability to return merchandise)
Rob Houseknecht
http://times-georgian.com/pages/full_story/push?article-Three+
charged+in+Wal-Mart+theft+scheme
Wal-Mart had unethical behavior because of not knowing that the product was switched with a blank disc. They should of known by seeing the same customer coming back in less than an hour to return the game to get their money back. Should of noticed with the new type of wrapping put back on the game.
This will affect their business in a couple different ways. With Wal-Mart taking back the games and putting them back on the shelf it will cause other customers who always shop their to get frustrated. The loyal customers may start to shop at another store if they buy a game and get home to find out its just a blank disc.
http://www.foodnavigator-usa.com/Trends/Food-safety/Kellogg-talks-on-Special-K-contamination-Bimbo-Bakeries-issues-recall-due-to-machine-fault

In February 2013, Kellogg, ,a Bimbo Bakeries company, voluntarily recalled 36,000 packages of its Special K Red Berries cereal stating it could contain dangerous glass fragments stemming from a supplier. The product was quickly pulled from the market, in light of a series of other recalls of its popular brands.

According to the article that posted on Reuters.com, three sizes of the product were involved and had been distributed across the United States to a limited number of retailers. No consumer injuries were reported at that time.

"The company took this precautionary action due to the possible presence of glass fragments from a single batch of one of the ingredients," Kris Charles, a Kellogg spokesperson said. "This is a very small recall...We took the step out of an abundance of caution." Being more proactive, protected the company from the expensive $20 million dollar lesson they had recently experienced with a recall of Mini-Wheat product.

The company is still in the process of turning itself around after admitting that it had cut too many jobs in prior years that contributed to manufacturing problems:, Charles said. As a result, the company has implemented several audit processes in an attempt to catch problems before they exit the facility.

Though it is always rather disturbing to hear of recalls, especially ones that involve the food we eat, I am happy that Kellogg is willing to admit their shortcoming and are seeking to take action to correct it. Some have complained that how they notified the public of the recall was not enough. I would tend to agree, since I had no idea until I did research for this project. They did however inform some TV news stations. Likely just those in the known impacted areas.

For this recall, they offered a coupon for a replacement product . Though their stock fell slightly to around $56 per share immediately following this incident it has rebounded to $65.68 as of 8/9/13. An indication that stakeholders are satisfied with their response.

Alexis Wilkinson





Ethics and Responsibility
Consumer Response
Consumer Alert !!!
http://www.reuters.com/article/2013/02/21/us-kellogg-recall-idUSBRE91K04920130221
http://crr.kelloggcompany.com/en_US/corporate-responsibility/overview/our-commitments.html
.
managing and coordination relationships with suppliers
What happened?
Union Carbide, a pesticide company in Bhopal India, now owned by Dow Chemical:
- Failed to operate the plant under health and safety standards.
- Disaster warning alarms were disabled.
- December 3, 1984 a toxic cloud of poisonous gas, Sevin: the pesticide produced at the plant, escaped the plant killing 8,000 official number of casualties (20,000 unofficial number) and injuring and/or disabling 11,000 official number (600,000 unofficial number) men, women, and children.
- Leak caused by mechanical and human error.

Unethical Return:
- Since the disaster Union Carbide failed to clean up the site
- Poisonous gas continually leaks into water supply and soil today.
-Executives, indicted in India on manslaughter charges, refused to appear before the Indian court.
- Government of India settled a law suit against the company for $470 million of which living victims only received $550 and death benefits of $1,300 were paid to families. This accounts for less than half of the settlement money.
_Dow Chemical, who had acquired Union Carbide, refuses to clean-up or be held accountable for the disaster.
Tanya Willis
Read more: http://www.globalresearch.ca/union-carbide-and-the-bhopal-disaster/27161
http://www.madofftrustee.com/
Aimee MacFarlane
Bernie Madoff Investment Fraud
www.downtoearth.org.in/content/bhopal-gas-tragedy-dow-chemical-may-finally-be-held-accountable
the quest to drive down costs very often leads to poor product quality and put end users at risks, leading to a strong case of bad business ethics. Mattel has earned notoriety for manufacturing hazardous toys. The company outsourced manufacturing to China to cut costs, but the toys that came back were coated in toxic lead paint and contained 180 times the legal limit of lead content. The dolls also came with poorly attached small magnets that could perforate the small intestines if swallowed.
http://www.brighthub.com/office/entrepreneurs/articles/115557.aspx
Mattel lost the faith of their customers in their product. Consumers want products they can trust and do not have to worry about the safety of their children.
Nancy Peters
BP- AN UNETHICAL OIL GIANT
BP did not implement policies that ensured safety would not be compromised in order to cut costs. Even though they paid those affected by the oil spill, BP still acted with profits in mind first.
https://bizgovsoc4.wordpress.com/2012/11/12/bp-an-unethical-oil-giant/
Nancy Peters
Remember to add your content within a frame in the appropriate location (PLAN, MAKE, SOURCE, DELIVER or RETURN)
...add your content to the path...
Don't forget to include your NAME!
Bryan Back
http://dialog.studentassociation.ca/index.php/monsanto-unethical-tyrannical-biotechnological-monster/
Monstano continues to deliver goods filled with chemicals that are know to be harmful to people. Since not yet illegal, they claim they are doing no wrong.
http://www.cnet.com/news/apple-chastised-for-unsafe-working-conditions-in-supplier-factory/
Jeff Campbell

Halliburton
Granted a no-bid contract to restore Iraqi oil during the war(contract no doubt given thanks to influence of former Vice President/ former Halliburton CEO, Dick Cheney). Whilst in Iraq,was found to have unfairly overcharged for operations by $1.3 billion. Halliburton was also fined for bribing Nigerian officials to secure oil and gas deals in Nigeria. Halliburton was forced to pay a total fine of $559 million. They've also been accused, multiple times, of engaging in transactions with countries with which trades are prohibited by U.S. government.
Dylan Burkley
TRAFIGURA
Multinational metal and energy company, is responsible for disposing of toxic waste produced as a result of their work. Were accused of(but denied) intentionally dumping waste out of a large seaport in Africa. Trafigura Weekly claimed in-house testing revealed the sludge to be less toxic than originally presumed. A 2009 UN report proved this to be completely fabricated. Trafigura was fined over $1 million for dumping. Additionally, they've also been accused of stealing oil from South Sudan.
Dylan Burkley
http://rt.com/usa/165168-thai-shrimp-industry-slave-labor/
A six-month investigation has established that large numbers of men bought and sold like animals and held against their will on fishing boats off Thailand are integral to the production of prawns (commonly called shrimp in the US) sold in leading supermarkets around the world, including the top four global retailers: Walmart, Carrefour, Costco and Tesco.
Lola Davis-Hinkle
Koch Industries has come under several investigations, allegations and fines for the volume of toxic output the company produces. In 1999 the company paid our record civil and criminal environmental penalties. Koch Industries ranked among the top polluters of air, water and climate.
http://www.rollingstone.com/politics/news/inside-the-koch-brothers-toxic-empire-20140924?page=2
Amy Rosenstiel

Julia Sinnott
Blackwater - the Largest Private Military Contractor - supplies paramilitary services during conflicts in which a regular US military presence is not acceptable. Many accusations have arisen regarding treatment of their employees written into the employee contract such as: "If you defy a direct order, for any reason, you will be abruptly terminated and Blackwater will withhold all back salary and bring legal action against your family."

These complaints are processed in a way
that recovers all pay during your service to Blackwater AND sues your family until you drop the complaint.

"You don’t get paid to have feelings or opinions, you get paid to kill and accomplish the mission. That’s it! You don’t, well kiss your job goodbye and plan to give every penny back to them. You basically worked your rear end for free and cannot sue them because it is in the contract. Crazy right?"
http://andressu.com/2014/02/20/unethical-business-practices/
Repercussion
: Poor morale, makes people want to work for them, don't you think!
http://www.cnet.com/news/riots-suicides-and-other-issues-in-foxconns-iphone-factories/
Elbert D. King
{Late Sunday night, the Taiyuan factory, with more than 79,000 workers, was roiled by violence . Foxconn said "a personal dispute between several employees escalated into an incident involving some 2,000 workers," leading Foxconn to suspend operations at the plant for a day. While Chinese authorities are investigating the cause of the riot, Foxconn said that it "appears not to have been work-related." Apple declined to comment on the riot.}
Although it may not be unethical to some, working in a factory where workers are slaved daily puts them at a greater risk of being injured by riots and altercations mentioned in this article.

These conditions are not suitable for employees to make the needed product to be shipped to the suppliers. Although Apple hired an outside source to look into the matters of the employees relating to bad conditions, more policies needs to come from the factory to combat major issues dealing with work labor, wages, etc.
http://www.supplymanagement.com/news/2006/mcdonalds-tops-index-of-unethical-companies
Mcdonald's uses it's size to bully the suppliers into doing thier will
they squeeze every last marginal cent out of the supply chain because it helps themselves
the consequences are already happening as McDonalds revenue dropped 1.7% the steepest in over 14 years
Joseph Bunk
Secret Service Prostitution Scandal

“There have been allegations of misconduct made against Secret Service personnel in Cartagena, Colombia prior to the President’s trip. Because of this, those personnel are being relieved of their assignments, returned to their place of duty, and are being replaced by other Secret Service personnel,” Edwin Donovan, Secret Service spokesman, said in a statement. Read more: http://www.politico.com/news/stories/0412/75128.html#ixzz3RwXAU7YE
In 2012 secret service agents failed to uphold their duty when they participated in soliciting prostitutes resulting in the "biggest scandal in secret service history." Says Ronald Kessler reporter for the Washington post. The investigation egan when one of the woman involved made a complaint to authorities that she had not been paid.
Source:http://www.politico.com/news/stories/0412/75128.html
Steven Brace
Trader Joe's Interferes with Vendor Relationships
— Trader Joe's coerced suppliers of two of their sources to cancel contracts and consequently cancel their suppliers and enable Trader Joe's to cancel their contracts with their long term suppliers of ice cream and dairy products - Trader Joe's in essence put the suppliers out of business by pressuring the source of the suppliers to discontinue shipments. At this time the dispute is still in the courts and their is no outcome other than bad feelings between Trader Joe's and longtime suppliers

http://losangeles.cbslocal.com/2014/07/11/lawsuit-accuses-trader-joes-of-unethical-business-practices/
http://www.theguardian.com/environment/2011/jan/20/apple-pollution-supply-chain
Apple producing their phones in China with cheap pay and polluting the environment is horrible and has caused many to become sick and even death has occurred in some. This is unethical and will end up causing people to begin purchasing other brands.
Reprocussions this is Samsung taking over large market share at the expense of Apple.
Thomas W. Ensley Jr.
http://businessethicscases.blogspot.com/2014/02/philip-morris-international-and-labor.html
Thomas W. Ensley Jr.
Philip Morris every day is doing unethical tasks to maintain their agriculture in other countries that can not be done in America. They use child labor and pay a grown up to wake these kids up in the morning to harvest the tobacco and if they do not awake they are beaten with sticks. Philip Morris as a company in selling tobacco knows the effects it is having on families of the purchasers of their product yet believe it is still worth while to sell and make a profit on them. The continue to outsource a good part of their tobacco harvesting in other countries to make additional funds but do not use any of these funds to try to make their product more safely.
These actions are causing more government actions against the company and the smoking population is shrinking.
Will Robinson
Nestle ignoring country food safety standards
Swiss multi-national NestleBSE -1.48 %, the makers of Maggi, was accused of engaging in "inhumane" business practices and "playing with lives of people" after its instant noodles was found flouting food safety norms.


Will Robinson
http://www.wsj.com/articles/nestle-challenges-india-ban-on-maggi-noodles-1434011123
Allied-Crude Vegetable Oil Refining Corporation
http://www.businessinsider.com/the-great-salad-oil-scandal-of-1963-2013-11
Anthony DeAngelis owned Allied-Crude and traded vegetable oil stocks. He scammed 51 companies including American Express to borrow money using his oil as collateral. He started falsifying warehouse receipts for selling vegetable oil he didn't even have. He filled most tanks with water and skimmed a thin layer of oil across the top and passed them as "full oil tanks". Government inspectors were tipped off and 51 companies were scammed by DeAngelis. He only received 7 years in prison for his elaborate scheme.
__Jamie Heller
Bloomingdale's one step ahead on returned clothing
Bloomingdales has started to add additional tags to dresses that cost more than $150 in a plan to prevent returns on clothing that has been worn. The black snap tags are placed in visible places on the garment including the hemline and neckline. Once the tag is snapped off, the garment can no longer be returned.

--Jamie Heller
http://www.bloomberg.com/bw/articles/2013-09-26/return-fraud-clothing-and-electronics-retailers-fight-back
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