Ethical Behavior from Buyer and Supplier in the Supply Chain and its Impact on our Global Market
Literature Review Final
Furthering God’s Purposes for Business in Earth
The Bible is an essential work of literature and knowledge. It is one of the most sacred texts in the world. In modern times, the Bible has become a controversial piece of work due to political reasons. However, the Bible contains valuable information in its text that can teach individuals and society how to live their lives in a meaningful way, by reading the word of God. In the second epistle of Corinthians, Paul’s letter reveals God’s plan for His people to give to others. In 2 Corinthians 9:10-13, is one of the best sets of Bible verses about supply chain management.
Now he who supplies seed to the sower and bread for food will also supply and increase the amount of your seed will also increase your store of seed and will enlarge the harvest of your righteousness. You will be made enriched in every way so that you can be generous on every occasion, and through us, your generosity will result in thanksgiving to God. This service you perform is not only supplying the need of the Lord’s people but is also overflowing in many expressions of thanks to God. Because of the service by which you have proved yourselves, others will praise God for their obedience that accompanies your confession of the gospel of Christ, and for your generosity in sharing with them and with everyone else. (The Holy Bible, 2015)
How Supply Chains Improve the Business Model
Supply chain management can play an enormous role in a business model of a firm. The business model is incorporated as the strategic method of how a firm is operating its business. A division of the strategic business model, especially in a manufacturing firm, is supply chain management. “Supply chain management consists of multiple firms collaborating to leverage strategic positioning and to improve operating efficiency” (Liberty, p. 4, 2017). One of the big things that affect supply chain management is a firm’s distribution network. This distribution chain is the process of how goods flow from the supplier to the consumer, in the result.
Target has begun experimenting with a new distribution approach strategy that aims to improve distribution in stores. Target is aiming at restocking its shelves quicker and making the store nimbler to compete with Wal-Mart and Amazon. Target invested $550 Million and purchased an inventory management app called Shipt to assist them in their same-day delivery capabilities better (Smith, 2018). This investment will allow Target to have less inventory at its stores and rely on the quickness of shipping and transportation logistics. “Shipping more orders from our stores reduces our costs while allowing us to move faster” (Smith, 2018). This method allows Target to have more control over its supply chain, and stock its shelves much quicker also by reducing that inventory levels of the back room in the stores. Target will able to increase its sales because items will be fully stocked more often, and the stock of inventory in the back room is a fraction of the norm (Smith, 2018).
How A Bible Verse Improves the Supply Chain
2 Corinthians 9:10-13 can help improve a firm’s supply chain. The context of this section of Bible verses in the second epistle of Corinthians suggests one can become wealthy by supplying goods to where they are needed. Supplying goods to where they are being demanded is the basis of supply chain management. In result, a firm will become so wealthy; they will be able to donate plenty to the poor. At the same time, they will bring faith and generosity to others while spreading the word of God.
In Target’s example, management has made it clear that they want less inventory piled up in the back room of stores, and same day shipping deliveries. In correlation with the Bible text, Target is merely making the experience for the customer more appealing. The shelves at Target will be better managed and have less out of stock items on the shelves. This allows Target to give more to the consumer as the consumer entered Target to purchase a specific item. If the item is out of stock, that consumer will leave displeased and may go elsewhere and possibly not return to the store. In Target’s new distribution method, shelves will be stocked on demand. Target merely is “sharing” its supply of goods to the world by selling its goods more efficiently and practically.
In 2 Corinthians 9:10-13, the text goes into detail about how suppliers of goods can provide God’s needs, as well as God’s people’s needs. In a way, Target is doing a similar thing. Target has revamped its distribution channel to focus more on the customer’s demand and to have quicker delivery times. This generosity and its “sharing” of supply to God and others is a great way to make money, spread an excellent experience for its consumers, and spread the word of God in a way that the text has discussed.
The Benefits of using the Bible in the Supply Chain
The Bible has a vast amount of valuable information that can be used for personal satisfaction and gratification, as well as a guide to ethical business behavior. In the supply chain management sector, one of the most important internal business items to manage is the supply chain operations system. This system is the blueprint of how the organization makes they key decisions and holds its logistics. The type of systems being used within an organization, completely control its supply chain and logistics network. This system needs to be implemented and managed by an ethic logistics manager. Otherwise, not only will the system not be profitable, but the organization can take a wrong turn.
For which of you, desiring to build a tower, does not first sit down and count the cost, whether he has enough to complete it? Otherwise, when he has laid a foundation and is not able to finish, all who see it begin to mock him, saying, ‘This man began to build and was not able to finish.’ Or what king, going out to encounter another king in war, will not sit down first and deliberate whether he is able with ten thousand to meet him who comes against him with twenty thousand? (The Holy Bible, 2015).
The above quote from Luke 14:28-31 discusses the importance of implementation. This bible verse suggests sitting down and have a strategic plan to implement a new concept. If the plan is not well thought out, then the attempted implementation of poorly thought out plan will be devastating to an organization. No matter what type of system an organization decides to use based on their strategical goals, implementation of that plan is just as important as the inventory control system itself.
Again, the implementation process of a supply chain system such as; materials resource planning or enterprise resource process, this is very important in the supply chain and manufacturing sector. Usually when the logistics of an organization are going well, the same can be said for profit and ethical behavior. However, when the organization lacks proper logistics behavior, it can turn out bad.
The Unethical Issue
From 1970 to 1980, the Ford Motor Company produced a vehicle called the Ford Pinto. The Ford Pinto was a two-door hatchback vehicle in which it was produced to meet the demands of the consumer that wants a more compact vehicle. The Ford Pinto was introduced in a time where America was in the prime of the muscle car era. With governmental regulations placed on emissions, smaller compact and more fuel-efficient vehicles grew popularity in the market. Ford designed the Pinto to compete with companies like Toyota, AMC, Honda, and Suzuki. In May of 1968, the Ford Motor Company, based upon a recommendation by then vice-president Lee Iacocca, decided to introduce a subcompact car and produce it domestically. To gain a large market share, the automobile was designed and developed on an accelerated schedule. During the first few years, sales of the Pinto were excellent, but there was trouble on the horizon (Leggett, 1999).
The Ford Pinto became popular in a way that it did not want. The Ford Pinto is susceptible to exploding if rear-ended. This is because the gas tank is directly placed in the rear near the rear bumper. In May of 1972, Ford Motor Company found themselves in a lawsuit when Lily Gray was traveling with thirteen-year-old Richard Grimshaw in a 1972 Pinto when their car was struck by another car traveling approximately thirty miles per hour. The impact ignited a fire in the Pinto which killed Lily Gray and left Richard Grimshaw with devastating injuries. A judgment was rendered against Ford, and the jury awarded the Gray family $560,000 and Matthew Grimshaw $2.5 million in compensatory damages. The jury awarded $3.5 million in punitive damages as well (Leggett, 1999).
Ford had access to a new design which would decrease the possibility of the Ford Pinto from exploding; the company chose not to implement the design. This design would have cost $11 per car, even though it had done an analysis showing that the new design would result in 180 fewer deaths. The company defended itself claiming that the monetary costs of making the change were greater than the societal benefit. Based on the numbers Ford used, the cost would have been $137 million versus the $49.5 million price tag put on the deaths, injuries, and car damages, and thus Ford felt justified not implementing the design change. Based on this analysis, Ford legally chose not to make the design changes which would have made the Pinto safer (Leggett, 1999).
This unethical behavior puts Ford Pinto owners at risk of being in an explosion when getting hit from behind. Ford Motor Company looked at the extra $11 per vehicle cost and decided not to apply that extra cost to prevent this issue but wanted to sell the vehicle anyway to make increase profits. Ford Motor Company was in the wrong when they decided to continue to produce and manufacture the Ford Pinto after knowingly having a potential risk liability hazard with the gas tank in the rear of the vehicle susceptible to exploding.
How the Bible can influence Business Practices
“Better is a poor person who walks in his integrity than one who is crooked in speech and is a fool” (The Holy Bible, 2015).
Proverbs 19:1 suggests that one who is upright with their words and actions, has great character, is in a better condition, is more beloved, lives life with a purpose, more excellent in the eyes of God, wise, and is a good person. This verse also suggests that being wealthy is not the most important thing in the world. It is better to be a poor person with honesty then being greedy and abusing its power. In business, this logic is 100% true. A consumer does not want to invest their money in a product or into a company that is not honest, especially in today’s time. Customer loyalty is a top contributor to the business. Money and profit are important in business, however; doing the right thing, honesty, ethics, and integrity are much more important than greed.
1 Timothy 6:10
“For the love of money is the root of all evil: which some coveted after, they have erred from the faith, and pierced themselves through with many sorrows” (The Holy Bible, 2015).
1 Timothy 6:10 suggests that the love of money can be evil. It can deter friendship, progress, and can make any situation turn negative. Having all eyes on profitability, faith is lost. Faith is important even in business. If Ford Motor Company decided to spend the extra $11 per car to fix the gas tank issue, their customer loyalty and brand image would not have taken a hit. Also, they would have had more money at the end of it. Ford Motor Company ended up spending more money to pay for the lawsuits, rather than fixing it when the issue first became apparent.
What We Can Learn from This
If this situation were to occur today, I believe that companies would think twice about this type of unethical behavior. With the emphasis on government safety regulations, I do not think the government would allow these vehicles to be sold. If for whatever reason they were being sold, a few things would happen: Insurance companies would hike the premiums of these vehicles to a height where it is not affordable, media would draw attention to it and publish negative reviews about it, brand and consumer loyalty will decrease, and the overall business would take a hit. In similar but recent automobile news within the past year, Volkswagen had to pay millions of dollars for their emissions on their diesel cars in which they were not truthful about. In fact, Volkswagen’s CEO has been charged with fraudulent charges (Atiyeh, 2017).
Overall, it is not good to cover up or not act on a potential risk. Like Ford Motor Company, they did not resolve the explosion situation, and ultimately it was taken to court as a lawsuit. In a similar situation, Volkswagen knew of their emissions issue, and the CEO has been charged with fraud. The Bible teaches us not to be greedy and act on good judgment and character, otherwise, a potential risk can come back and bite. Luckily, both major automobile companies have enough capital not to let a negative situation ruin their creditability and business; however, if this were a new emerging automobile company, this may cause devastation to the entire organization.
The recommendations for this paper is to put ethics above profits in every business situation. Ford and Volkswagen decided to look at profits entirely, unfortunately they paid the price for their unethical business decision. The implementation of a logistics-based system can entirely help an organization make better decision and beef up the logistics of their supply chain. The Bible should be used not as a business profitability guide; however, it should be used as an ethical behavior guide in business to make an organization profitable.
Further research should be continued to examine how the implementation of a logistics-based system can quantitively make a company more ethical and profitable. This can be used to further evaluate the state of ethics and logistics in the supply chain and how it can relate to the Bible.
The Bible should be used an ethical guide for an organization to become well-liked by the public and to become profitable. The Bible should not be looked down upon due to religious and political reasons, but it should be valued to be used as a guide to practice ethical behavior in supply chain management. This can even be said on a much larger scale. The Bible should be used as a guide for all business.
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Hull, Bradley Z. (2008). Frankincense, Myrrh, and Spices: The Oldest Global Supply Chain? Journal of Macromarketing. Retrieved from https://doi.org/10.1177/0276146708320446
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Leggett, C. (1999). THE FORD PINTO CASE: Retrieved from https://users.wfu.edu/palmitar/Law&Valuation/Papers/1999/Leggett-pinto.html
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Mirac, Bayhan. (1999). Implementation and evaluation of an MRP II software package in a sanitaryware company. Production and Inventory Management Journal, 40(4), 41-48. Retrieved from http://ezproxy.liberty.edu/login?url=https://search-proquest-com.ezproxy.liberty.edu/docview/199909437?accountid=12085
Smith, J. (2018, May 14). Target Tests Retail ‘Flow Center’ for Faster, Nimbler Distribution. Retrieved from https://www.wsj.com/articles/target-tests-retail-flow-center-for-faster-nimbler-distribution-1526299200?mod=searchresults&page=1&pos=2
Stock, J. R., & Broadus, C. J. (2006). DOCTORAL RESEARCH IN SUPPLY CHAIN MANAGEMENT AND/OR LOGISTICS-RELATED AREAS: 1999-2004. Journal of Business Logistics, 27(1), 139-IX. Retrieved from http://ezproxy.liberty.edu/login?url=https://search-proquest-com.ezproxy.liberty.edu/docview/212657356?accountid=12085
The Holy Bible: New International Version. (2015). Colorado Springs, CO: Biblica.
Titone, R. C. (1994). Integrating MRP II and JIT to achieve world-class status. Hospital Materiel Management Quarterly, 15(4), 62. Retrieved from http://ezproxy.liberty.edu/login?url=https://search-proquest-com.ezproxy.liberty.edu/docview/234272948?accountid=12085