Social Sustainability Practices within the Supply Chain of Multinational Corporations

How consistent are Multinationals with the implementation of social sustainability within their supply chain in regulatory distant countries?

Master's Thesis from the year 2012 in the subject Business economics - Supply, Production, Logistics, grade: 1,0 (Honours Degree), , course: Supply Chain Management, language: English, abstract: Today, most Multinational Corporations (MNCs) are eager to install sustainable standards not just within their own but also within their supply chain operations. While the two pillars of sustainability, economic and environmental, are well researched within this field of business, the third pillar, social sustainability (SSS)lags behind within the researchers' focus. However, because of recent social scandals within the supply chain operations of Multinationals, an investigation targeting social sustainability and its effective implementation within the supply chain would provide important insights into such yet neglected field of research. This thesis tries to tackle this issue and analyses whether MNCs extent their SSS practices to suppliers in regulatory distant countries the same way as they do within countries close to their home market. The thesis intends to fill the research gap which exists around SSS and provides valuable insides into how consistent MNCs are in extending SSS practices among their supplier network. On the basis of telephone interviews and company data, the thesis analyses the social sustainability efforts of The Otto Group, the second largest online retailer in the world. The two methods to monitor suppliers' compliance that are examined in this thesis are assessment and collaboration. Results show, that Multinationals should not rely on either one of these two monitoring methods, but should combine them, using Assessment only as first step, and Collaboration as second. Since assessment usually provides the buyer solely with a snapshot of the current situation at suppliers' site, collaboration as second step provides the relationship with a more mutual character. Frequent non-compliance of parties, the buyer and the supplier, emphasise that collaboration and therefore mutual controlling processes are necessary. In case the business relationship between buyer and supplier does involve operations in risky, low regulated countries, these findings are even more highlighted.