Social and environmental responsibility in globalized supply chains are hard to police.
Social and environmental responsibility in globalized supply chains are hard to police. That task often falls to nongovernmental organizations, or NGOs, that publicize abuses and call out irresponsible corporations and industries.
According to new research led by the University of California, Riverside NGOs are more likely to sway companies into ethical behavior with carefully targeted reports that take into consideration a range of factors affecting the companies and industries. The report also finds that too much pressure can actually backfire.
The study suggests that in some circumstances, vertical integration, where companies own and control all steps of the production process, can be both economically feasible and promote responsible sourcing throughout an industry.
“Vertical integration costs firms a lot of money. It’s not easy and not everyone can do it,” said Adem Orsdemir, an assistant professor of operations and supply chain management at UC Riverside and first author of the study. “But if you can do it, it’s best.”
Read more at University of California - Riverside
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