Value chain management is the process that involves organization of all activities that a firm operating in a specific industry performs after a proper analysis, so as to deliver valueable goods and services for the market. A strategy is created to develop the processes so as to maintain the firm’s value and help the organization to early identify the areas of strength. A value chain for any given industry, should be demand driven, global, distributed and collaborative. A theory of value chain was suggested for the formation of the theory of global value chain (Miles, 2017). This theory is enhanced by an analyzed framework of global value chain. More developments on the value chain are met using extra frameworks such as the network of production (D’heur, 2015). Quality addition help in reducing the cost of operations of every function and maintaining the competitiveness of the organizations.
Corporate Social Responsibility is a business model that balances interest of different stakeholders of a company in the operations of business (Bell, Bryman, & Harley, 2018). Business ethics, duties and rights are debated as they exist under it between the firms and the societies. This concept of ethics is rooted from the traditional Aristotelian and Confucian cultural values. The production of any firm is linked to the community as the members obey the law governing them, the set code of ethics and delegated obligations. A theory is considered as it involves shareholders’ interest. It is taken to be a social responsibility of the organization and besides making profit, any other activity was regarded unethical. This was because it violated shareholders’ interest (McWilliams, 2015). Another theory of stakeholders focused on the interests of the firm. It should be more than those of the shareholders and must include the protection of customers interests, the government, suppliers, managers, community, staff members and others. A four level Corporate Social Responsibility theory that involves Corporate Social Responsibility economic, ethical Corporate Social Responsibility, legal Corporate Social Responsibility and altruistic Corporate Social Responsibility is also put into consideration (Ferrell & Fraedrich, 2015).
This report clearly elaborates the identified Corporate Social Responsibility inefficiencies that are based on the organizations’ value chain model (Unit, 2015). It shows whether Corporate Social Responsibility issues of an organization are analyzed using the value chain model or not (Grayson & Hodges, 2017). It also explains the ethical problems of firm’s functions along the value chain. Solutions and recommendations are stated briefly to manage and prevent these issues that arise in the value chain line. This are to ensure modern business ethics are maintained and the new contributions made.
Organizations with value chains that incorporate operations in economies that are developing faces a few challenges. Basing on the production related inefficiencies, the obligations of a firm are dealt with to ensure that the operation processes are not hazardous (Kosinski, Matz, Gosling & Stillwell, 2015). Ethical predicaments rise due to this process of production and it is always difficult to state the permissibility degree. This degree could depend on the state of change or the perceptions of acceptable risk socially. With the aim of maximizing profits and maintaining a good production behavior, firms tend to look for cheaper but quick means. This may compromise quality of products or reduce the safety of production by using shortcuts. The marketing and sales related CSR challenge is that in case a firm conducts behavior that are unethical it may harm the customers’ interests. During advertisement, pricing and selling process the firm may exaggerate, cheat or price fix the products and goods may result to consequences hard to reconstruct. There is also an issue of delay and product rejection even after buyers have been paid altering the loyalty and supply chains of certain business parties involved. As the firm is trying to keep up the flow of production and the rate of competition, it may face inefficiencies (Mol, 2015). Some of them include false marketing, viral marketing, ambush marketing, attack advertisements, electronized spam and green wash marketing. The value chain of procurement may be faced by bribery, commissions and kickbacks that will reduce purchased raw materials quality. This may be of benefit to the procurement manager or the suppliers involved but a disadvantage to the investors’ interest. In case a foreign source is involved for completion of procurement process, the import tax from raw materials may be dodged. Another challenge is related to the financial management that includes transactions of finances, auditing and accounting. While conducting financial transactions, the firm faces bribes, short term payments facilitation and kickbacks. These activities alter the competition and also act against the societal values. Accounting may be hindered by financial analysis that could be misleading, earnings management, creative accounting and others. On the basis of auditing, challenges such as damage of the investment interest. This may occur if the kind of relationship existing between the firm and the third hand that accounts for the certified financial statements was established illegally. This is risky as the auditing party may lose its independence and integrity to ensure auditing certification is available to the financial statement. Once the finances have been altered firm’s chances of bankruptcy rises.
The theory of global commodity chain, is based on analysis of value chains that retails and a mishmash of value chain model and the industrial organization. A procurement strategy that targets to make us of global efficiencies for goods and services delivery is taken into considerations. This strategy is the global sourcing that completes the competition setting in the business arena. A few of the globally sourced goods and services include; the labor intensive goods and the software and hardware tasks produced at a low cost of production. They relate to sourcing which has no scope or scale limit. Global sourcing harmonizes the world’s production that is cost effective and inputs of operations such as materials, machines, technology, engineering and other capabilities that could be required (Kohler & Yalcin, 2018). The global commodity chains have been categorized into institutional framework, territoriality, input output and governance. Other secondary activities that are linked to these primary activities are influential to management of the global value chains and the considerations of business ethics. They influence the firm competition and its sustainability globally (Kano, 2018).
The theory of value chain is deeply elaborated in the Competitive Advantage book whereby each organization has a collection of activities that they perform for product design, production process, delivery and after-sales services. All these activities are shown by value chain terms. Once a number of major activities are followed and performed, the company can now think of creating a complete value. These activities include; operations, logistics, marketing, sales, procurement, human resource management, accounting, legal, administrative and overall management. The value chain of a company and the major supporting activities are connected to formulate the value chain process. This process is the route of a profit margin as it is equivalent to the created value and netted cost of creating the value. A company builds a competitive advantage once it has focused on giving the customer’s more valuable services and products.
Approaches to ethical considerations that are recommended for stakeholders are analyzed (Curry, 2016);
With the ethical action best one of the best in protecting and respecting the stakeholders’ moral rights. It provides a belief that the dignity of human that is based on their nature in terms of their ability to freely choose what they do with their lives. This grants them the right to be treated on equal grounds and offer mutual respect among them.
Ethical behaviors ensure that all stakeholders are treated equally or on a fair basis depending on some standards. This kind of treatment ensure there is balancing of power reducing unfair treats.
Ethical considerations should be consistent and associated with the ideal virtues governing the business (Day, Leahy, & McCarthy, 2016). This provides effective growth and development of the stakeholders’ relation. These virtues act as cores that ensure all persons involved in the business act potentially to the character and business values. It promotes growth even on individual basis.
The relationship of ethical reasoning and society contributes to the growth of the community at large. This offers an eye to the common conditions that is vital to the welfare of all persons. This involves a system of effective policies, necessary law and effective strategies.
Ethics provides a platform of good and most adoptable ideas that are beneficial. The corporation action of ethics produces these goods that are less harmful to the shareholders. It ensures the ethical warfare balances the positive achievements that are met in line to curbing the inefficiencies. This approach deals with the consequences present as it tries to increase the good that is done and reduce the harm that has been done.
All these approaches help to determine the behavioral standards that can be considered to be ethical. They also aid in solving a few business ethical problems. Each of the approach provides necessary information that is of important in the ethical fields under different set ups (Fischer, Squires, Sharma, Ganesan, Ghodke & Rangarajan, 2018). All this leads to a common solution that influence the growth of the firm. To improve on these ethics a code should be developed by providing a strategic priority on the ethical performance. The stakeholders should engage themselves and communicate effectively as they also train their staff members. It is also triggered when the stakeholders provide any kind of support to these employees. Additionally, an evaluation analysis can be conducted to measure the effectiveness of the ethics programme.
Conclusion
This report provides an analysis the Corporate Social Responsibilities inefficiencies that are based on the value chain model. It states once the value chain is used to analyze these issues of large organizations, the issues gets more complex due to the extension of value chain globally (Park, Seager & Rao, 2016). It is analyzed that the value chain is related to particular problems that are present and the solutions given may be lethal whole organization. These challenges can also be curbed once proper ethical considerations are adopted. To the existing ethical factors, an advancement or improvement is taken into place to maintain the standards of the organizations. The organization is able to maintain a good reputation, avoid issues and embrace a consistent competitive advantage (Wang, Tong, Takeuchi & George, 2016). Generally, the value chain management helps the organizations to optimize their value, the involved investors value and safeguard the customers’ interest. This ensure there is an effective production flow as from logistics to operations, outbound logistics, marketing and sales services.
It is recommended that the value chain should always have a realistic focus and must be aware of the risks that may arise. The stakeholders should identify those who are important to adding the value of the chain and its operations. This will help in filtering out the unethical activities and illegal conducts that could be lowering the standards of the organization or reducing its value of production. It is also recommended that companies should reward their staff according to the efforts they have input to contribute to the company’s success. The best CSR activities should be implemented to scale up the business and new ones adopted to increase its impact. The effective CSR activities linked to the value chain should be strengthened.
References
Bell, E., Bryman, A., & Harley, B. (2018). Business research methods. Oxford university press.
Curry, E. (2016). The big data value chain: definitions, concepts, and theoretical approaches. In New horizons for a data-driven economy (pp. 29-37). Springer, Cham.
Day, M. R., Leahy-Warren, P., & McCarthy, G. (2016). Self-neglect: ethical considerations. Annual Review of Nursing Research, 34(1), 89-107.
D’heur, M. (2015). Sustainable Value Chain Management (p. P21). Springer International Publishing: Imprint: Springer.
Ferrell, O. C., & Fraedrich, J. (2015). Business ethics: Ethical decision making & cases. Nelson Education.
Fischer, D. J., Squires, G. M., Sharma, R., Ganesan, R., Ghodke, D. M., & Rangarajan, B. (2018). U.S. Patent No. 10,102,488. Washington, DC: U.S. Patent and Trademark Office.
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Kano, L. (2018). Global value chain governance: A relational perspective. Journal of International Business Studies, 49(6), 684-705.
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