Business Dilemma with Current Supplier

In: Business and Management

Submitted By staystay
Words 579
Pages 3
To: Chief Operations Officer, COO
Date: [Date]

Re: Business Dilemma with Current Supplier Ethical Dilemma
We have recently learned that there is a problem with one of our key suppliers that may have a negative effect on our company. House of Shoes has been hiring workers under the age of 16 and forcing them to work more than 40 hours per week. We know that they have consistently met our quality requirements and sent products on time. The problem is that we are worried about the negative effects that this issue may have on Style Your Way if a story about their business practices gets out.
Proposed Decision
Because House of Shoes has been a reliable key supplier, we think it is best to try to keep our partnership with them while requiring some crucial changes. We believe that requiring House of Shoes to sign a new business contract with us the best way to go. This will show our respect and loyalty to them by giving them a chance to correct the problem rather than just pulling our business from them without notice. We understand that this is a risky decision to place these requirements but, it is our social responsibility as well as our corporate responsibility to make this right for the best interest of our stakeholders. We propose that as a condition of this new contract, a social audit be performed on a monthly basis to make sure House of Shoes is in compliance. Of course, any business decision has its pros and cons.

Pros of this Decision
1. The audits will allow us to know what is going on at the supplier’s factory on a monthly basis. The Audits will help improve our compacts profitability by making management better recognize working conditions and financial arrangements. Shareholders will have better knowledge on the risks in their organizations and will analyze problems to make improvement in things that can be better.…...

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