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The Importance of A Long-Term Relationship – Business thoughts

In business on April 14, 2008 at 10:01 pm

More multinational companies are reporting on the progress of their responsible sourcing programs. A look at their data over a few years reveals mixed results.

Since 2004, Gap has been reporting on its responsible sourcing efforts, including specific data on factory monitoring. Following Gap’s lead, Wal-Mart, Ikea, Reebok, Nike and others have begun to disclose monitoring statistics as well. These numbers typically indicate the percentage of suppliers by region that are compliant, with anywhere from ten to 100 compliance indicators.

To get a quick idea of what the abundant data shows, we can look at a few key indicators related to child labour, wages, work hours and worker treatment from suppliers based in Asia.

The Gap reports indicate that there were improvements in supplier compliance related to age documentation, voluntary overtime and worker treatment, over a three-year period from 2003 to 2005. For Wal-Mart, the findings in these areas were nearly the opposite. Wal-Mart saw an increase in violations over 2004-05.  For both Gap and Wal-Mart, the data showed no visible changes in wages and work hours indicators over the multi-year period. Ikea, which classifies its findings by much broader categories, saw no change in the area of wages and hours and an increase in the violations related to worker treatment in Asia from 2004 to 2006.

Important to understanding this apparent conundrum, Gap provides an excellent discussion of the limitations of monitoring data in its 2004 report. For example, Gap discusses how training monitors and improving detection skills may result in a related spike in findings in the subsequent year. In evaluating overall supply chain performance, it is important to consider these types of contributing factors that may skew data.

Even more important to understanding the data, consider that sourcing locations are constantly changing, for some product types more than others. Therefore, the variation in findings from year to year normally will not represent the same pool of suppliers, but rather the current suppliers for that year. Newer suppliers may have less experience with compliance and therefore demonstrate worse performance.

The data underscores the importance of a long-term relationship with the supplier when seeking sustained improvements in labor rights. For some product lines, this is much easier said than done.

Nike shows one way forward in its latest report, where different goals are set for the 20% of its supply base that is long term, representing 80% of Nike’s products. Nike is focusing on improving conditions with long-term partners, capitalizing on increased influence and opportunity for improvement over time.

Hopefully its future monitoring data will also set new standards. While the reporting of monitoring data has come a long way in a few short years, it still has a long way to go.

10 tips that can set you on the fast track of being “king” in the boss world

In more tips on April 4, 2008 at 7:37 pm

A boss is the head of an organization or department in a business. He or she as the case may be is the person in charge of effective functioning and responsible for instituting business plans. Donning the mantle of a great boss is a commitment for life. You need to reach out in every way.

The cornerstones to becoming a great leader who people look up to and admire are:

1. To be a visionary and abandon concentrating on nitty gritties to view the “big picture”. You must be able to plan and lead the company to a zenith never reached before. The company mission must include rounded goals, healthy profits, high ideals, and opportunities for employees to scale new heights along with the company. It gives employees a sense of belonging and purpose.

2. To applaud initiative and accept good ideas from employees giving them due credit. It is important for you to have a drive to take ideas to higher levels of implementation and not just file them away. Most successful companies are built on team effort with everyone contributing their mite. Acknowledge graciously contributions big and small made by employees.

3. Be qualified and competent. You need to have the talent and curiosity to know how each department functions and where they are right and where they need correction. Must know the art of reining in as well as giving a free run.

4. Have resilience. It is flexibility of mind and action that will allow you to adapt to situations without caving in. Triumphs and defeats are all a part of business and must be taken in stride. If you encounter a dead end have the courage to review matters and change direction without missing a single beat.

5. Interpersonal skills and the art of communication must be mastered. Work alongside your employees and lend a patient ear. Brainstorm with the employees you will be surprised to receive good and quick solutions to unsolvable problems. This does not mean you become a door mat. Lead the company with a firm yet kind hand.

6. Lead a team not a silent group lead by one person. Delegate responsibilities and ensure that they are fulfilled. Be a colleague and place your trust in those who have earned it. For the team to be effective you must recruit quality people. Allow and encourage independence of thought and action provided set goals are met.

7. Learn effective communication. For an organization to run on oiled wheels internal and external communications must be excellent. Honesty, fair play, and integrity are the keys. Promises made to customers and other business must always be kept and there should be no cloak and dagger practices.

8. Sharpen your instincts to a level that benefits you. Most business decisions are made on intuition that rises from experience and know how.

9. Be an effective leader. Motivate the workers and earn their admiration and respect. Decisions must be made timely and effectively. Action should be immediate with no delays or postponement.

10. Be a risk taker and overcome the fear or failure and doubts. Unless calculated risks are taken you will never be able to scale new heights. Learn from your mistakes and never shy from asking for advice.

A good leader is always an excellent mentor. He must not just know the working skills of his employees but some of their personal aspirations as well. A good boss goes beyond leading a business –he becomes a friend, philosopher, and guide not just to his employees but to the business community in general and his country and the whole world in particular.
By: Paul Wilson

MORALITY AND THE MARKET

In Uncategorized on March 28, 2008 at 5:06 pm

Capitalism is the social, political, and economic system that lets rights to
property be transferred by market transactions among private individuals,
alone or in groups. Systems of thought that oppose capitalism oppose this
way of fixing legitimate property claims and substitute other criteria for the
legitimacy of property transfers, or prohibits such transfers altogether.

In either allowing or disallowing market transactions, capitalist and
non-capitalist systems either allow or disallow business. Business is a set of
organized human activities which take place in markets. So it is appropriate
to engage in a general consideration of the morality or immorality of
markets and of market institutions, in a business ethics text. Much of what
makes for good business or bad business is the suitability of business
practices to engage in market activity. But if market activities were
essentially bad, that badness would transfer back to the business activities.
On the other hand, if it is a good thing for humans to participate in
markets, then good business can be good human activity.

In any event, this chapter is a discussion of the morality of markets and
of market institutions. Since this is an introductory essay, I shall explain
everything that is taken up in the essay. So I start by explaining what
markets are and what morality is.

What is morality? The study of morality is an attempt to formulate
rational standards that can be used to distinguish between right and wrong
action and also between good and bad things. For example, most people
think that peace and prosperity are good things and should be pursued.

to be continued….

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