Archive for the ‘CSR’ Category

Consumers are like elephants – Risk management and mitigation is a long term project

April 12, 2010

Reports on konsumerbehavior and beliefs are always a great source when trying to understanding, educate and open the minds of procurement professionals (or anyone involved in development and manufacturing). Most often they expose consumers as a sort of elephant – they rarely forget and once they start moving in a direction, getting them to change can be an overwhelming task.

Recently, Konsument Föreningen Stockholm – swedens largest non-profit consumer organization – opened a social media project called “Myths about Food” whereby they sought to expose and bust many of the myths that still float around consumer circles.

One of the questions in the survey was related to the use of apples in Lingoberry jam. Now anyone who’s ever been to the nordic region will have experienced the importance of Lingonberry in Scandinavian cuisine. The fact that it’s one of IKEA’s big sellers abroad is a testament to the fact if nothing else. In it’s purest form Lingonberry jam consists of lingonberrys and sugar so when your starting to mess with the recipe you’re getting into pretty deep waters.

Evenso, about 20 years ago many producers were exposed using apple sauce in lingonberry jam to make their product cheaper.

In this years survey (swedish only) – 72 percent of the respondents still believed this to be true. Even though producers stopped the malpractice years ago.

Now that’s something to keep in mind when you’re trying to balance cost with your products consumer product.

Is procurement to blame for corruption business practices in low cost countries?

March 30, 2010

The Rio Tinto bribes-for-secrets case has become a landmark for corruption and risk management; exposing business practices many of us consider highly unethical.

Commenting the story for CNN (Wake-up call for foreign firms in China);  risk management consultant Peter Humphrey points out several lessons that can be learned from the case:

  • First, corrupt practices must be strictly monitored and curbed in order to avoid trouble both with Chinese law and home-country anti-bribery law.
  • Second, companies clearly need to gather business intelligence and competitor intelligence but they must do so through legal and ethical means and not through bribes.
  • A closely-related lesson for multinationals is what we have learned about the interests that China considers “strategic”.

Now, we’re all aware that corruption is wide-spread in China (as it unfortunately is in many parts of the developing world) the question is how we should deal with the fact. SIDA – the Swedish International Development Cooperation Agency recently announced that they are funding a center for CSR-issues in Beijing (in Swedish) but although training and cooperation centers such as this are one way of instigating change one wonders if it is enough. My belief is that CSR-practices must become the focal point for low cost country sourcing because unless procurement as buyers do not stand up for ethical procedures one cannot expect developing country suppliers to live up to western European cultural  ideals in a cut throat business environment.


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