ArticlePDF Available

Your company may unwittingly be conducting business with human traffickers: How can you prevent this?

Authors:

Abstract

A new concern is beginning to gain notoriety in society: human trafficking. This issue, which can result in slavery, should concern businesses. Almost 30 million slaves exist globally today. The fact that human trafficking is a $32 billion business indicates either indifference for human rights or an ignorance of the injustice occurring. Even though companies may be against the idea of human trafficking, they may not recognize that they could be contributing to this problem through their business operations and relationships. However, companies can exercise social responsibility by using their influence over suppliers and business partners to prohibit human trafficking. This article examines the extent to which companies are involved in combating human trafficking, and helps companies identify where they are at risk for involvement with human trafficking. Moreover, steps are suggested to prevent human trafficking from occurring within company operations and supply chains.
Citation: Smith, K.T., & Betts, T. (2015). Your Company May Unwittingly Be Conducting
Business with Human Traffickers: How Can You Prevent This? Business Horizons, 58,
225-234.
YOUR COMPANY MAY UNWITTINGLY BE CONDUCTING BUSINESS WITH
HUMAN TRAFFICKERS: HOW CAN YOU PREVENT THIS?
Katherine Taken Smith
College of Business
Texas A&M University – Corpus Christi
6300 Ocean Drive, Unit 5808
Corpus Christi, TX 78412-5808
Tel: 979.220.8751
dr.kathy.smith@gmail.com
Teresa Betts
Department of Management & Marketing
Murray State University
451 Business Building
Murray, KY 42071
Ph: 270-809-6039
Fax: 270-809-3740
tbetts1@murraystate.edu
YOUR COMPANY MAY UNWITTINGLY BE CONDUCTING BUSINESS WITH
HUMAN TRAFFICKERS: HOW CAN YOU PREVENT THIS?
ABSTRACT
A new concern is beginning to gain notoriety in society, and, thus, emerging as an issue about
which businesses should be concerned. The issue is human trafficking, which can result in
slavery. There are almost 30 million slaves around the world today. The fact that human
trafficking is a 32 billion dollar business indicates either indifference for human rights, or an
ignorance of the injustice occurring. Even though companies may be against the idea of human
trafficking, they may not recognize that they could possibly be contributing to this problem
though their business operations and relationships. Companies can exercise social responsibility
by using their influence over suppliers and business partners to prohibit human trafficking. This
paper examines the extent to which companies are involved in combating human trafficking.
Data for the study were collected from all the Fortune 500 companies. This paper also helps
companies identify where they are at risk for involvement with human trafficking. Steps are
given to prevent human trafficking from occurring within company operations and supply
chains.
Key words: Human trafficking, Slavery, Supply chain, Corporate social responsibility, Human
rights, Code of ethics
i
CONSIDER THIS
A poor, 16 year old girl gets on a bus with the promise that there is a job awaiting her.
She is drugged and wakes up in a brothel. If she tries to escape or does not perform for
customers, she is beaten and starved. Among her clients are business people from all over the
world. At the end of the year, she has endured multiple abortions as a result of being raped over
7,000 times (Bilheimer, 2011). She almost dies from a beating (she will eventually die from
AIDS). Human trafficking exists in part because there is a demand for the products and services
connected to it. In some business dealings across the globe, paying for commercial sex is an
acceptable form of entertainment for guests. In an interview with a girl who had been rescued
from a brothel, she described how customers were allowed to do whatever they wanted with her.
No matter how loud she screamed, no one came to help. The average age to be enslaved is 14,
but girls may be as young as six (The Day My God Died, 2003).
A 15-year-old boy, a school dropout, is recruited by a broker who promises him a good
job. Instead, the boy is confined to a factory to work, given little food, severely beaten, branded,
burned with cigarettes, and allowed only a few hours’ sleep each night. The boy is occasionally
allowed to talk on the phone with his parents, but the owner is always present, always
threatening. Someone is keeping this factory in business by purchasing its products. Could it by
your company?
In the United States, nine owners of convenience stores were arrested in 2013 for
participating in human trafficking and oppressing dozens of people through forced labor in their
stores. Human trafficking is more rampant than most people realize and it may be occurring in
your business or in your community, without you recognizing it. What businesses supplied
1
products to these convenience stores? What vendors stocked the shelves? Did anyone notice
employees who looked under-nourished, who wouldn’t look you in the eye, who seemed afraid?
While there are laws against forced labor and human trafficking, Secretary of State John Kerry
admits that millions of victims go unnoticed by law enforcement every year (DeLuca, 2013).
The purpose of this paper is to examine the extent to which corporations are involved in
combating human trafficking and to help companies identify and avoid situations in which there
is a potential for human trafficking.
SHOULD HUMAN TRAFFICKING BE INCLUDED IN
CORPORATE SOCIAL RESPONSIBILITY?
Corporate social responsibility (CSR) is in a continuous state of transformation
(Blazovich & Smith, 2011). Corporate social responsibility refers to the duty that companies
have to society that extend beyond their duty to stockholders. In 1998, the most common issues
regarding corporate social responsibility were community/civic involvement, environment,
education, and charity (Esrock & Leichty, 1998). Since then, the focus of CSR has broadened. In
2012, community and environment were still key issues, but additional concerns immerged that
pertained to health and wellness, diversity, and ethics (Smith & Alexander, 2012).
Corporate social responsibility has evolved to include the ethical, legal, economic, and
philanthropic expectations that society has for businesses (Carroll, 2010). A new concern is just
beginning to gain widespread notice in society, and, thus, emerging as an issue about which
businesses should also be concerned. This is the problem of human trafficking. Some
governments have declared human trafficking as one of the worst abuses of human rights of our
time (Fukuda-Parr, 2003). Public outcry and legislation have not yet been strong enough to
abolish the human trafficking industry. A problem of this magnitude requires the efforts of all
participants in a civilized society: citizens, government, and businesses.
2
SPECIFICS OF HUMAN TRAFFICKING
According to the United Nations Trafficking Protocol, human trafficking is the
recruitment, transport, transfer, harboring or receipt of persons by threat, coercion, force,
abduction, or deception for the purpose of exploitation. Exploitation includes prostitution, forced
labor, slavery or practices similar to slavery, servitude, or the removal of organs (UNODC,
2014). Trafficking in persons has three basic elements: 1) the act of recruitment, transportation,
transfer, harboring or receipt of persons; 2) the means used, which includes threat, coercion,
force, abduction, or deception; and 3) the purpose of exploitation.
Other terms used in connection with human trafficking, are modern-day slavery, forced
labor, and debt bondage. Common to all these terms is the idea that a person is being deprived of
his or her freedom for the purpose of exploitation. Even though human trafficking is often
equated with slavery, they are not technically the same thing. According to Merriam-Webster’s
Dictionary (2014), slavery occurs when someone is legally owned by another person and is
forced to work for that person without pay. Victims of human trafficking may become slaves. A
human being is an inexpensive commodity in today’s marketplace. The cost of a slave reached a
record low of $90 in 2011. With an increase in the world’s population, especially in developing
countries, there is a bountiful supply of “slaveable” people (Inocencia, 2011).
Estimates are that the largest category of human trafficking is forced labor and the next
largest is for sexual exploitation (Farrell, 2012). Victims may be lured or abducted and then sold
into bondage. Daughters and sons may be sold by their parents who are either deceived or
hardhearted. An estimated 50% of human trafficking victims are children (U.S. Department of
State, 2004). Besides labor and sexual exploitation, children may be used in beggars’ networks
or for the brutal act of forcibly removing their organs for sale. There is demand for pornographic
3
websites of children, often in highly abusive scenarios. Almost 70% of children involved in this
type of abuse are between the ages of 1 and 10 years old (Enough Is Enough, 2013).
According to the Global Slavery Index (2013), there are 29.8 million people in slavery
around the world today. The Global Slavery Index is published by the Walk Free Foundation.
The goal of Walk Free is to end slavery; their strategy includes enlisting the help of corporations
to drive change in those industries where slavery is most rampant. The Global Slavery Index
provides information on countries around the world regarding the number of slaves within the
country and the amount of human trafficking occurring in and out of the country (Global Slavery
Index, 2013). The actual number of slaves in the world is hard to measure. Depending upon the
goals of the researcher and the definition used for slavery, results can vary.
Table 1 provides a breakdown of the amount of human trafficking occurring in different
regions around the world. According to the Global Slavery Index (2013), 72% of victims are in
Asia; this equates to over 21 million people. Sub-Saharan Africa contains 16% of the world’s
29.8 million slaves. The United States and Canada house almost 4% of the world’s slaves. This
may sound like a small percentage in North America, but it equates to over 1 million victims.
Europe possesses the lowest percentage of slaves, almost 2%. However, this still equates to an
appallingly large number of victims, over half a million.
[Insert Table 1 about here]
The Global Slavery Index (2013) ranks countries according to the number of enslaved
people within their borders. The following ranking reveals the ten countries with the highest
numbers of slaves.
1. India
2. China
3. Pakistan
4. Nigeria
4
5. Ethiopia
6. Russia
7. Thailand
8. Democratic Republic of the Congo
9. Myanmar
10. Bangladesh
India is by far the worst violator in terms of human bondage, with approximately 14
million slaves. Debt bondage and bonded labor occurs among men, women, and children. The
country with the second largest number of slaves is China, with about 3 million. China’s
treatment of people is abusive in many ways, from forced labor to forced begging to sexual
exploitation. Pakistan is ranked third for enslaving over 2 million people. The remaining
countries on the list each contain under a million slaves. Taken all together, the above ten
countries account for 76% of the global estimate of 29.8 million slaves (Global Slavery Index,
2013).
WHAT IS THE ROLE OF COMMERCE IN HUMAN TRAFFICKING?
Some companies have larger economies than developing countries and, thus, can be very
influential over their suppliers and business partners. Companies possess a myriad of resources
and may be able to impact social and political arenas as well as the marketplace (United Nations,
2012). Corporate social responsibility compels businesses to do what they can to make a better
world.
Human trafficking is a 32 billion dollar industry that operates globally (Belser, 2005). It
is the second most lucrative criminal activity, after drug dealing (Balch, 2013). About half of the
profits are netted in industrialized countries, from victims of forced labor (Belser, 2005). The
dreadful act of people being sold across international borders is an ongoing reality. As long as
consumers are willing to purchase products and services connected to human trafficking, the
industry will thrive. The fact that human trafficking is a profitable business indicates either a
5
disregard of human rights, or an ignorance of the injustice occurring.
Legitimate companies that knowingly or unknowingly do business with people in the
human trafficking industry are facilitating the continuation of this illegal trade. Members of the
human trafficking supply chain include the recruiter, the transporter/smuggler, and the final
exploiter (Belser, 2005). Human trafficking obviously involves criminals and organized crime
networks; however, some people in the supply chain may have legitimate jobs and may not be
aware that they are facilitating illegal behavior. These facilitators may include internet providers,
transportation providers, hotels, and dating sites.
Manufacturers and retailers may also unknowingly assist in human trafficking by using
products or services garnered from victims of forced labor. Companies risk being associated with
human trafficking by employing a workforce supplied by third party agents over which they have
limited oversight. A company that knowingly partners with a supplier who uses forced labor is,
in essence, joining in the exploitation of trafficking victims.
In 2011, the UN Human Rights Council endorsed the Guiding Principles on Business and
Human Rights: Implementing the UN “Protect, Respect, and Remedy” Framework. The
“Respect” component of this document addresses the corporate responsibility to respect human
rights. Businesses should avoid violating human rights through their company activities.
Businesses should also prevent adverse human rights impacts that are linked to their operations,
product, or services. The document states that companies have a social responsibility to stop
human rights infractions that are linked to business relationships, even if the company has not
contributed to those infractions (United Nations, 2012). To show employees and stakeholders
that human rights are important, a company should have appropriate policies in place. The
company should also have processes to identify, prevent, and halt human rights violations
6
(Business & Human Rights Resource Center, 2013).
As human trafficking gains attention around the world, some companies are considering
the social responsibility implications involved in global supply chains. The Global Business
Coalition Against Human Trafficking (gBCAT) is an organization whose mission is to mobilize
the business community in order to end human trafficking. Co-founder of gBCAT, Robert
Rigby-Hall, made the following statement: “Non-governmental organizations and governments
are very passionate about fighting trafficking, but until corporate America gets behind this issue,
nothing really in my mind is going to change” (Balch, 2013). Some prominent corporations are
on the board of gBCAT, such as Microsoft, Coca-Cola, Ford, and ExxonMobil.
The Global Business Coalition Against Human Trafficking provides companies with
orientation and operational guidance to understand human trafficking and how it affects
business. Members of this organization also facilitate connections between businesses and
governments, international organizations, non-profits and civil society for the purpose of sharing
solutions to address human trafficking. As a way to achieve their mission of ending human
trafficking, gBCAT focuses on the following tasks (Global Business Coalition Against Human
Trafficking, 2013):
Training and Education: Employee, vendor and sub-contractor training programs.
Supply Chain: Identifying and preventing forced labor in supply chains and
operations.
Sex Trafficking: Raising awareness of company policies to combat sex trafficking,
notably in travel and tourism.
Communication and Outreach: Thought leadership and transfer of best practices.
As a practical example of how a company can combat human trafficking, Delta trains its
7
employees to identify signs of trafficking on its international flights. Coca-Cola, a founding
member of gBCAT, has identified human trafficking possibilities within its business operations
and has implemented policies to mitigate them (O’Neill, 2013). Microsoft has taken steps to
make it harder for traffickers to use its products. The company also trains employees to become
aware of situations in which they could come into contact with human trafficking (Microsoft,
2013).
Some legal tools have emerged since 2000 to help fight human trafficking. On a
worldwide basis, the UN General Assembly adopted the UN Protocol to Prevent, Suppress, and
Punish Trafficking in Persons. That same year, the United States passed the Trafficking Victims
Protection Act (Gozdziak & Collett, 2005). In 2012, the European Commission adopted the EU
Strategy towards the Eradication of Trafficking in Human Beings (Europa, 2013). Some people
might think that human trafficking could be eradicated by legal means; simply mandating that it
is illegal. However, it is more complex than that. Culture and religious beliefs play a role in
whether or not a society values human life and is willing to tolerate abuses such as human
trafficking and slavery.
While all nations suffer from human exploitation, Western nations have lower rates of
trafficking and slavery. These lower rates can be traced to historical and cultural roots, including
the West’s dominant religion of Christianity. A person who had a significant impact on the anti-
slavery movement was William Wilberforce, who served in the British Parliament. After
becoming a Christian in his adulthood, Wilberforce was instrumental in Parliament voting to
abolish slavery throughout the British Empire in 1833 (Smith, 2014). Slavery was abolished in
the United States in 1865. The movement to end slavery was led by Christians, such as Quakers,
Presbyterians, Congregationalists, and Evangelicals (Stafford, 1992). They upheld the assertion
8
in the US Declaration of Independence, which states that all men are created equal and endowed
by their Creator with certain unalienable rights, including life, liberty and the pursuit of
happiness.
Consumer demand and profitability are also integral components to maintaining human
trafficking. This is where companies and consumers can work together to decrease the demand
for products connected to human trafficking. While there is a moral reason for companies to
combat human trafficking, it also makes good business sense. Allegations of human trafficking
can destroy a company’s reputation and, in turn, hurt profitability. Besides risking the distain of
consumers, business partnerships and investors may be affected. On the other hand, companies
that contribute to the good of society have been associated with better financial performance,
increased creativity and innovation, and improving their competitive standing in the marketplace
(Kassinis & Vafeas, 2006). Research indicates that consumers and stakeholders prefer doing
business with good corporate citizens (Smith, Smith, & Wang, 2010).
There are codes of conduct voluntarily adopted by many businesses that include the
protection of human rights. These principles may be within a firm’s social responsibility report,
code of ethics, corporate citizenship, or some other document on corporate policy. However,
according to the United Nations (2012), most existing codes of conduct do not specifically
include human trafficking. Even though companies may be against the idea of human trafficking,
they may not recognize that they could possibly be contributing to this problem though their
business operations and relationships. Thus, companies often do not include human trafficking as
part of their social responsibility and lack policies to prevent trafficking from occurring in their
supply chains (United Nations, 2012).
ARE FORTUNE 500 COMPANIES ADDRESSING THE PROBLEM
9
OF HUMAN TRAFFICKING?
As previously discussed, human trafficking is slowly gaining the attention of society and
businesses. Corporations can help in the battle to end this inhumane activity. Some corporations
treat human trafficking as a priority issue and address it within their corporate responsibility.
Some do not. To determine the number of Fortune 500 companies that are specifically
addressing human trafficking, data was collected from the entire set of Fortune 500 companies in
fall 2013. The Fortune 500 is composed of leading corporations that drive the American
economy and, to a large extent, the world economy. Corporate social responsibility applies to
companies of any size; however, the focus tends to be on large organizations because they are
more often in the public eye and have more clout (Carroll, 2010). The determination was made
that a company addressed human trafficking if this issue was included on their website or in a
company document that is linked to the website.
FINDINGS: A MINORITY OF COMPANIES ARE IN THE FIGHT
Of the Fortune 500 companies, 31 percent specifically address the issue of human
trafficking. That constitutes 155 companies providing information on their policies and
procedures related to the trafficking of persons. This information is either placed directly on their
website or via a link to their social responsibility report, corporate citizenship report, code of
ethics, or some other document regarding company policy.
Fortune 500 companies can be categorized into three industry types: manufacturing,
retailing, and service. Table 2 shows the number and percentage of firms within each category
that address the issue of human trafficking through their websites. Around 40 percent of
manufacturers and retailers discuss their stand on human trafficking and the policies they have in
place to help combat this problem. Only 11 percent of service companies discuss human
10
trafficking through their websites.
[Insert Table 2 about here]
Since there are over three times more manufacturers than retailers listed in the Fortune
500, the actual number of manufacturing companies with human trafficking standards is of
course larger. There are 106 manufacturing companies addressing human trafficking and 29
retail companies. As for service firms, there are 20 out of 180 that present standards on human
trafficking. Since the retail and service industries have a relatively small number of companies
interested in human trafficking, the specific companies are listed in Table 3.
[Insert Table 3 about here]
An example of a service industry that is trying to combat human trafficking is the
trucking industry. Thousands of truckers have received training on how to recognize the signs of
human trafficking. The group, Truckers Against Trafficking, distributes information regarding
the national hotline and how to help victims (Grimes & Myles, 2014). An example of an industry
that could help detect trafficking is the financial sector, which can report suspicious money
transactions that could potentially be connected to illegal trafficking operations. The human
trafficking industry frequently uses hotels in its operations. Trained hotel staff can help detect
and rescue victims in sex trafficking. All industries can help increase public awareness of human
trafficking and the availability of resources to stop the illegal activity and help the victims
(Grimes & Myles, 2014).
Many companies are now addressing the problem of human trafficking on their websites
in response to a bill passed by the state of California. The California Transparency in Supply
Chains Act, which came into effect in January 2012, requires every retailer and manufacturer
with annual worldwide revenues in excess of $100 million to disclose on its website information
11
about company efforts to prevent human trafficking in its supply chain. The motivation behind
this bill is the belief that businesses and consumers are unintentionally facilitating human
trafficking through the purchase of goods and services that are associated with this violation of
human rights. Without knowledge of a company’s supply chain, consumers are unable to
identify companies that practice good corporate citizenship by overseeing their supply chains so
as to prevent human trafficking. California’s goal is provide consumers with the information they
need to make a wise choice regarding the products they buy and the companies they support
(California Transparency in Supply Chains Act, 2010).
Companies that do business in California must disclosure information regarding their
efforts to conduct audits and ensure that their suppliers are in compliance with company rules on
trafficking. Companies must divulge whether or not they require direct suppliers to certify that
materials incorporated into the product comply with standards regarding trafficking. Whether or
not a company institutes internal accountability for trafficking standards is also required. Lastly,
a company reveals the training programs it has in place for employees to recognize and prevent
trafficking (United Nations, 2012).
The California Transparency in Supply Chains Act is enforced by the California
Franchise Tax Board and the California Attorney-General’s Office. Companies that are engaged
in manufacturing or retail trade with gross receipts of at least $100 million are examined once a
year for compliance. The attorney-general reviews each company’s website for disclosure of
company efforts to avoid the use of slaves and human trafficking in their supply chains. In
response to violations, the attorney-general has the power to impose an injunction to correct
corporate behavior. The Act does not create a private right of action (Luxton, 2011). While there
is not a direct penalty for non-compliance, an injunction can be an effective motivator in order to
12
maintain a good company reputation (Gonzalez Marcos, 2011).
Ford is an example of a company that has an aggressive strategy against human
trafficking that constitutes a strong response to the California Transparency in Supply Chains
Act. Ford regularly assesses risk related to their supply chain. External stakeholders along with
Ford employees consider several factors in determining the risk level of human trafficking
occurring in the supply chain. In 2012, the company made revisions to its Code of Corporate
Responsibility to specifically compliance with human trafficking standards. Regular employee
training occurs in regard to human rights and their global working conditions program. Suppliers
in high-risk markets are also required to undergo training. Lastly, Ford regularly audits at-risk
supplier factories to monitor compliance with human rights standards. Following the audits,
suppliers must implement corrective actions plans from Ford (Ford, 2013).
Company policies and procedures regarding human trafficking vary. Some companies
post a broad commitment that they will not tolerate the trafficking of human beings. Some
companies simply state that they are in compliance with a specific law regarding trafficking. At
the other end of the spectrum, some companies post a code of conduct or social responsibility
report that details extensive procedures that are in place to prevent trafficking in their operations.
Kroger’s Code of Conduct is an integral part of the Kroger Standard Vendor Agreement
and requires that suppliers not use child or involuntary labor in the manufacture of the products
sold to Kroger. Compliance with the Code of Conduct may include providing Kroger with a copy
of a third party audit evidencing compliance. Kroger’s Code of Conduct follows the U.S.
Department of Labor regulations and the Fair Labor Standards Act, while also fulfilling the
California Transparency in Supply Chain Act (Kroger, 2014).
The J.M. Smuckers Company is a good example of what companies are doing to enforce
13
a company stand of zero-tolerance regarding human trafficking. In their corporate social
responsibility report Smuckers states that during their quality assurance audits of suppliers, their
auditors look for evidence of human trafficking and slavery. Their goal is to identify risks that
could threaten their dedication to doing the right thing (J.M. Smuckers, 2013).
Perhaps the best company example to look at is Walmart, which has been a leader in so
many areas regarding business practices. Walmart does not tolerate trafficking in human beings
and enforces this through rigorous standards for its suppliers. After a factory is approved to
produce merchandise for Walmart, unannounced audits occur. Accredited and internationally
recognized auditing firms are used in this process. An audit includes a factory walk-through,
discussions with employees on the production floor. A sample of employees is selected for
private talks without management being present. Personnel records are checked for legal and
company compliance. Audit results are reviewed and a risk assessment is made by the Walmart
Ethical Sourcing Assessment Team (Walmart, 2013).
STEPS TO COMBAT HUMAN TRAFFICKING WITHIN YOUR COMPANY
In order to identify human trafficking within a company’s domain, managers must first
educate themselves on the risk. Specifically, third party organizations have documented risk
based on country, industry and culture. Companies need to utilize these external resources to
identify high risk areas. Then, informed supply chain managers can develop an audit process
which matches the rigor of the audit with the risk of the supplying company.
Buy in from top management will be critical for the sustainable success of any supply
chain management program which seeks to eliminate human trafficking and slavery from within
its domain. Top management buy in will be crucial to invest resources for 1) creating a supplier
score card; 2) evaluating suppliers on a regular basis; 3) developing a reward system / penalty
14
system for suppliers who are performing well / poorly; and 4) conduct unannounced audits with
global suppliers to ensure that standards are being followed.
In the context of this research, the steps identified in the Deming Wheel can be utilized to
address how companies should consider, develop, implement, and audit their global supply chain
for adherence to a supplier code of conduct which specifically addresses human trafficking and
slavery. The Deming Wheel continues to be a practical methodology utilized to solve problems.
The Deming Wheel consists of four separate, but linked activities: 1) plan; 2) do; 3) check; and
4 act (Swink, Melnyk, Cooper, & Hartley, 2011).
Step 1: Plan
The first step in combating human trafficking within your company is to identify supplier
standards. It is relatively easy for a company to indicate on a web site that they are strongly
against human trafficking, but what does that mean to the company and its suppliers. As stated
previously, human trafficking has been defined by the United Nations as the recruitment,
transfer, harboring or receipt of persons by force or deception for the purpose of exploitation.
Forced marriage, child marriage, and debt bondage are a part of some country cultures and
would be considered slave labor. A global supply chain code of conduct must explicitly include
the definitions of human trafficking and slavery. Best practices would incorporate supplier
standards which include cost, quality, delivery, and social responsibility guidelines. Within the
social responsibility guidelines, companies should include language which strictly prohibits
human trafficking and slavery.
Step 2: Do
The second step for companies is to implement (do) their supplier code of conduct across
their supply chain. Companies can make informed decisions regarding how to implement within
15
a supply chain extrapolating from a classic supply chain framework developed by Kraljic (1983).
Although this framework was developed in 1983, it is still the predominant approach utilized in
the profession (Knight, Tu, & Preston, 2014). This framework categorizes sourcing strategies
based on the level of supply risk and value to the firm.
Strategic parts purchases are essential to the firm’s performance and are typically
suppliers of unique products. Companies should build partnerships which incorporate explicit
expectations regarding human rights expectations with these suppliers to foster collaboration as
options for alternate sourcing are limited.
Bottleneck parts purchases are critical to a company’s performance because if these parts
are missing, production may be delayed. Fundamentally, a company should seek multiple
suppliers for a bottleneck part to minimize risk. However, suppliers may be incentivized to
comply with a company’s expectations regarding human rights if those expectations are
incorporated into a supplier score card which includes measures of human rights expectations
and business is awarded between or among suppliers based on their supplier score card rankings.
Leverage parts purchases involve standard good or services where many possible
suppliers are available. A proposed tactic in this category is to consolidate purchases with one or
a few suppliers to achieve discounts and create incentives for complying with supplier standards
which incorporate expectations regarding human rights. Business volumes may be awarded to
suppliers based on their level of compliance with supplier standards (which include human rights
expectations).
The last category involves non-critical parts purchases. Noncritical parts have minimal
impact on performance and are typically a low percentage of overall spend within a company.
These parts are typically ordered frequently from many suppliers so their logistics and
16
transportation costs tend to be higher. A proposed tactic in this category is to minimize the
number of suppliers through purchasing management and focus on reducing transaction costs
through efficient processing of orders and optimizing order volumes and inventory levels.
Because there are typically multiple suppliers in this category and the buyer does not want to
increase transaction costs by auditing suppliers and renegotiating volumes and contract terms,
the buyer should require all companies bidding on contracts in this category to provide supplier
standard certification which meets and or exceeds the minimum level of supplier standards
identified in the planning stage above.
Step 3: Check
Once a supplier code of conduct has been agreed upon and implemented across the
supply chain, it is incumbent upon the buyer to audit (check) the supply chain to ensure to the
best of their ability that suppliers are following the code of conduct. Audits have been identified
as a basic element when seeking to develop and maintain an environmental management system
(Wu, Melnyk, & Calantone, 2008) which is a component of social responsibility. Human
trafficking and slavery both also fall under the umbrella of social responsibility and it is
reasonable to assume that audits would also be a basic element in assuring the compliance of
suppliers to a supplier code of ethics. Buyers can require or conduct audits with differing degrees
of rigor to ensure that suppliers are complying with the supplier code of conduct. The following
audits are listed from the least rigorous to arguably the most rigorous types of audits: 1) self-
audit by suppliers; 2) buyer schedules audit with supplier; 3) buyer conducts unscheduled audits
with supplier; and 4) buyer utilizes a third party to conduct independent audits. The type and
frequency of these audits should be scheduled based upon an informed decision which considers
the degree of risk relevant to industry, global region, culture, and company history.
17
Step 4: Act
The act step involves reviewing the information collected during the check step and
taking corrective action as necessary. Corrective action at its most basic level involves enforcing
the rewards / penalties clauses incorporated into supplier contracts based upon the adopted
supplier code of conduct. Next round audits are then scheduled and results from the current
round of audits are input into the planning stage. These results can be used to redefine supplier
codes of conduct and possibly to inspire nontraditional incentive forms (e.g. training programs
for women, scholarships for minors).
SUMMARY AND CONTACTS FOR REPORTING HUMAN TRAFFICKING
Companies can reduce the risk of human trafficking occurring in their business
operations by mapping their supply chains, tracing commodities to raw materials, and conducting
risk assessments to identify the risks of trafficking at all levels of the supply chain. If a company
uses suppliers whom they believe have a high-risk of trafficking occurring, the company can
insist that the suppliers become certified by external auditors and/or agree to unannounced
audits. An added safeguard is to train employees on the basics of human trafficking and how to
identify and report it. Once anti-trafficking policies and procedures are in place, a company must
rigorously monitor the implementation of these policies.
If an anti-trafficking violation occurs, or an employee identifies a potential case of
trafficking, a company should have in place some corrective actions to take. One option is to
report suspicious activity to the U.S. Immigration and Customs Enforcement (ICE). Contact can
be made through their website, www.ice.gov/tips, or by calling them at 866-347-2423 (for U.S.,
Mexico, and Canada) or 802-872-6199 (for other countries across the globe). Another option is
to call an anti-trafficking hotline. One such hotline in the United States is the National Human
18
Trafficking Resource Center (NHTRC). The NHTRC operates 24 hours a day, 7 days a week. Its
number is 1-888-3737-888. (The unusual grouping of the numbers is intentional.) The hotline is
answered by a trained specialist. Calls requiring urgent action receive an immediate response
from the NHTRC staff. A response may involve connecting the caller with local service
providers or local trained law enforcement. Non-urgent calls, such as requests for information or
training, are processed within 2 to 5 business days. Some calls may be for the purpose of
reporting a suspicion of trafficking taking place. If minors are involved, the call is processed
immediately. Otherwise, the suspicious behavior is reviewed by NHTRC supervisors and
regional specialists before following up. Follow up may involve reporting the tip to the
appropriate local, state, or federal law enforcement or anti-trafficking task force. NHTRC has an
extensive database of law enforcement and service providers for victims; a caller can be
immediately connected to emergency and crisis responders in his or her area. The hotline is a
program of the Polaris Project, a non-profit, non-governmental organization (Polaris Project,
2014).
For companies or employees who reside outside of the United States, a company policy
may include contacting local authorities or international anti-trafficking organizations such as the
International Justice Mission or the Polaris Project, who can provide guidance and counsel.
Besides contacting a civil society organization, company policy may include a list of local
support agencies for victims. Joining an organization, such as the Global Business Coalition
Against Human Trafficking (gBCAT) can help a company create operational guidelines on how
to prevent trafficking in their company operations and business relationships. The Polaris Project
also provides companies with project support, consultations, and training in the area of human
trafficking. A company can better avoid trafficking by being in compliance with the appropriate
19
government regulations, such as the California Transparency in Supply Chains Act and the labor
regulations within the country of operation.
20
REFERENCES
Balch, O. (2013). Corporate initiative can play a major role in anti-trafficking movement. The
Guardian. Retrieved October 5, 2013, from http://www.theguardian.com/global-
development-professionals-network/2013/apr/03/human-trafficking-global-business-
coalition.
Belser, P. (2005). Forced labor and human trafficking: Estimating the profits (WP42). Geneva:
International Labor Office. Retrieved October 5, 2013, from http://www.ilo.org/declaration.
Bilheimer, R., Ostertag, H., Greenbaum, J., Weijers, J., Higby, D., Detweiler, A., Sciortino-
Nilson, T., & Young, R.D. (2011). Not My Life. United States: Worldwide Documentaries.
Business & Human Rights Resource Center. (2013). Guiding Principles on Business and Human
Rights: Implementing the UN “Protect, Respect, and Remedy” Framework. Retrieved
November 11, 2013, from http://www.business-humanrights.org/media/documents/ruggie/
ruggie-guiding-principles-21-mar-2011.pdf.
California Transparency in Supply Chains Act. (2010). Senate Bill No. 657. Retrieved January 9,
2013, from http://www.state.gov/documents/organization/164934.pdf.
Carroll, A.B. (2010). Corporate social responsibility. In W. Visser, D. Matten, M. Pohl, &
N. Tolhurst (Eds.), The A-Z of corporate social responsibility (pp. 106-113). West Sussex,
England: Wiley.
DeLuca, M. (2013). 'Modern-day slavery': State Dept. says millions of human trafficking victims
go unidentified. U.S. News on NBCNEWS.com. Retrieved December 6, 2013, from
http://usnews.nbcnews.com/_news/2013/06/19/19042103-modern-day-slavery-state-dept-
says-millions-of-human-trafficking-victims-go-unidentified?lite.
Enough is Enough. (2013). Pornography statistics, internet safety. Retrieved January 9, 2014,
from http://www.internetsafety101.org/Pornographystatistics.htm.
Esrock, S.L., & Leichty, G.B. (1998). Social responsibility and corporate web pages: Self-
presentation or agenda setting. Public Relations Review, 24(3), 305-319.
Europa. (2013). Together against trafficking in human beings. European Commission. Retrieved
January 9, 2014, from http://ec.europa.eu/anti-trafficking/entity.action;jsessionid=lh4ZSvc
Yvvq4yWLFsYZMLnqT2GXgsp6V2vWnwBCxtn2fjMG1vc5z!1004153422?
path=EU+Policy%2FNew+European+Strategy.
Farrell, V. (2012). Not far from our roots: Human trafficking in today’s world. Crime Museum.
Retrieved March 26, 2014, from http://www.crimemuseum.org/blog/tag/human-trafficking/.
Ford. (2013). Forced labor and human trafficking in supply chains. Retrieved December 6, 2013,
from http://corporate.ford.com/microsites/sustainability-report-2012-13/supply-materials-
21
trafficking.
Fukuda-Parr, S. (2003). New threats to human security in the era of globalization. Journal of
Human Development, 4(2), 167-179.
Global Business Coalition Against Human Trafficking (gBCAT). (2013). Retrieved December 6,
2013, from http://www.gbcat.org/.
Global Slavery Index. (2013). Walk Free Foundation. Retrieved December 6, 2013, from
http://www.globalslaveryindex.org/.
Gonzalez Marcos, M. (2011). Are you sure that your shirt is slavery-free: The California
Transparency in Supply Chains Act of 2010. St. Paul, MN: Human Rights Centre, University
of Minnesota.
Gozdziak, E.M., & Collett, E.A. (2005). Research on human trafficking in North America: A
review of literature. International Migration, 43(1-2), 99-128.
Grimes, S., & Myles, B. (2014). Sex trafficking at the Super Bowl? It’s a problem every day.
Huff Post Impact. Retrieved January 9, 2014, from http://www.huffingtonpost.com/suzanne-
grimes/sex-trafficking-at-the-su_b_4698686.html.
Inocencio, R. (2011). Cost of slaves falls to historic low. CNN Business. Retrieved January 9,
2014, from http://business.blogs.cnn.com/2011/03/07/cost-of-slaves-falls-to-historic-low/.
J.M. Smuckers. (2013). 2013 Corporate Responsibility Report. Retrieved December 6, 2013,
from http://www.jmsmucker.com/smuckers-corporate/smuckers-corporate-responsibility.
Kassinis, G., & Vafeas, N. (2006). Stakeholder pressures and environmental performance.
Academy of Management Journal, 49(1), 145-159.
Knight, L., Tu, Y.H., & Preston, J. (2014). Integrating skills profiling and purchasing portfolio
management: An opportunity for building purchasing capability. International Journal of
Production Economics, 147(Part B), 271-283.
Kraljic, P. (1983). Purchasing must become supply management. Harvard Business Review,
61(5), 109-117.
Kroger. (2014). California Transparency in Supply Chains Act of 2010. Retrieved May 15, 2014,
from www.thekrogerco.com/vendors-suppliers/california-transparency-in-supply-chains-act-
of-2010
Luxton, J. (2011). New California Supply-Chain disclosure requirements will have far-reaching
implication. Retrieved November 11, 2013, from http://tradelines.ghy.com/2011/10/new-
california-supply-chain-disclosure-requirements-will-have-far-reaching-implications/.
Merriam-Webster Dictionary. (2014). Slave. Retrieved June 8, 2014, from http://www.merriam-
webster.com/dictionary/slave.
22
O’Neill, D. (2013). Human trafficking: The global issue in your backyard. Retrieved October 5,
2014, from http://www.coca-colacompany.com/stories/human-trafficking-the-global-issue-
in-your-backyard#TCCC.
Polaris Project. (2014). National human trafficking resource center (NGTRC). Retrieved January
10, 2014, from http://www.polarisproject.org/what-we-do/national-human-trafficking-
hotline/the-nhtrc/our-services.
Smith, K.T., & Alexander, J.J. (2013). Which CSR-related heading do Fortune 500 companies
use on their websites? Business and Professional Communication Quarterly, 76(2), 155-171.
Smith, K.T., Smith, L.M., & Wang, K. (2010). Does brand management of corporate reputation
translate into higher market value? Journal of Strategic Marketing, 18(3), 29-34.
Smith, L.M. (2014). Human trafficking: How William Wilberforce changed the world. Retrieved
June 8, 2014, from http://goo.gl/bNfSTn.
Stafford, T. (1992). The Abolitionists. Christianity Today, Retrieved June 8, 2014, from
http://www.ctlibrary.com/ch/1992/issue33/3321.html.
Swink, M., Melnyk, S., Cooper, M.B., & Hartley, J. (2011). Managing Operations Across the
Supply Chain. New York: McGraw-Hill.
The Day My God Died. (2003). Andrew Levine Productions. Documentary movie. Hong Kong.
United Nations. (2012). Report of the special rapporteur on trafficking in persons, especially
women and children. Retrieved January 12, 2014, from http://daccess-dds-ny.un.org/doc/
UNDOC/GEN/N12/454/33/PDF/N1245433.pdf?OpenElement.
UNODC. (2014). What is human trafficking? Retrieved June 7, 2014, from http://www.unodc.
org/unodc/en/human-trafficking/what-is-human-trafficking.html?ref=menuside.
U.S. Department of State. (2004). Trafficking in persons report. Retrieved May 20, 2014, from
http://www.state.gov/g/tip/rls/tiprpt/34021.htm.
Walmart. (2013). Ethical Sourcing Audit Process. Retrieved December 7, 2013, from
http://corporate.walmart.com/global-responsibility/ethical-sourcing/audit-process.
Wu, S.J., Melnyk, S.A., & Calantone, R.J. (2008). Assessing the core resources in the
environmental management system from the resource perspective and the contingency
perspective. IEEE Transactions on Engineering Management, 55(2), 304-315.
23
Table 1
Regional Analysis of Slaves around the World
Region Number of Slaves Percent of World’s Slave
Population (29.8 million)
Asia 21.49 million 72.14%
Sub-Saharan Africa 4.87 million 16.36%
USA & Canada 1.12 million 3.78%
Russia & Eurasia 1.00 million 3.36%
Middle East & North Africa .75 million 2.54%
Europe .54 million 1.82%
_____
Source: Global Slavery Index 2013
24
Table 2
Fortune 500 Companies by Industry Category that Address Human Trafficking
Category Number in
Fortune 500
Number that address
Human Trafficking
% within Category that
address Human Trafficking
Manufacturing 248 106 43%
Retail 72 29 40%
Service 180 20 11%
Total Companies 500 155 31%
25
Table 3
Retail and Service Companies that Address Human Trafficking
Retail Companies Arrow Electronics, Bed Bath & Beyond, Best Buy, Costco
Wholesale, CVS Caremark, Dick’s Sporting Goods, Dollar
General, Dollar Tree, Gamestop, Gap, J.C. Penney, Kohl’s,
Kroger, Limited Brands, Lowe’s, Macy’s, Nordstrom, Office
Depot, Rite Aid, Safeway, Sysco, Target, TJX, Toys “R” Us,
TravelCenters of America, United Stationers, Walgreen, Walmart,
Whole Foods Market
Service Companies Automatic Data Processing, Avaya, Baker Hughes, Cisco Systems,
Computer Sciences, Con-way, Corning, General Electric, Harris,
International Business Machines, Kinder Morgan, Manpower,
Marriott International, McDonald’s, SAIC, Sprint Nextel,
Starbucks, Walt Disney, YRC Worldwide, Yum Brands,
26
... Different terms such as slavery, trafficking, modern slavery, debt bondage, bonded labour, forced labour, coerced labour, unfree labour, and others are used interchangeably to describe this malicious practice. All these terms come under the umbrella of trafficking Davidson (2010) and a common theme in all these terms is that "a person is deprived of his or her freedom for the purpose of exploitation" [Smith and Betts (2015) p. 226]. ...
... Earlier, the concept of CSR was limited to education, environment protection, and charity [Esrock and Leichty (1998)]. Now, today the scope of CSR has broadened and organizations are giving special attention to philanthropic practices [Smith and Betts (2015)]. Private organizations are particularly cognizant of the human trafficking and ensure that their products are not used by traffickers. ...
... Private organizations are particularly cognizant of the human trafficking and ensure that their products are not used by traffickers. Smith and Betts (2015) quote the example of Microsoft who ensures that their products are not used by traffickers. Organizations also refrain from conducting any business with organizations involved in forced labour. ...
Article
Full-text available
Human trafficking is fundamentally a human rights issue. Authors have looked at this menace from the perspectives of sociology, economics, education, globalization, criminology, governance, legislation, and racial discrimination. However, most of these models are limited to a conceptual level and little empirical work is done to test the claims made by various theorists. In order to fill the said gap, data of most cited variables in the literature of trafficking are obtained. Results indicate that social progress and response of government against enslavement are negatively related to vulnerability to enslavement, while corruption and population growth rates are positively associated with the outcome.
... The illegal character of slavery creates high uncertainty about how long the situation remains hidden from all types of accounts, and whether and how long it can be maintained. As a result, investments in maintaining the productive capacity of the slave, e.g. through payment for health treatment, is of less value for the slave master, resulting in incentives to act in even more short-term and exploitative ways than in earlier times (Smith and Betts, 2015). Second, the focus of modern slavery is on deprivation of liberty and the ability of one party to exert control over another (Phillips and Sakamoto, 2012;Pierce, 2011). ...
... Although it is generally agreed that business-related slavery affects all countries around the world (Crane, 2013), the physical practice is seen to a greater extent in developing countries. Developing countries are associated with poor legal systems and a cultural history, which implicitly permit more powerful individuals to exert control similar to that existing with actual ownership over others (Locke et al., 2013;Smith and Betts, 2015). For example, modern slavery has been observed to be most prominent in poorer regions of South East Asia (Derks, 2010). ...
Purpose With the initial focus on the extreme end of the work conditions continuum where, in the last decade, legislation has been introduced to combat illegal and illegitimate practices, this issue's lead paper provides an overview on key topics of extreme work conditions of modern slavery and accounting. The paper introduces the Special Issue on “Accounting for modern slavery, employees and work conditions in business” and its selected papers. Design/methodology/approach The method adopted is a wide-ranging literature review exploring the continuum of work conditions and their relationship to accounting, especially extreme exploitation of workers through modern slavery. Findings Employment and workplace conditions and practices in business can be viewed as a continuum ranging from the illegal and illegitimate practices of modern slavery, through unethical and often illegal practices such as wages theft, to decent work. Given this continuum, in this Special Issue avenues are identified for accounting research to provide an account of the effectiveness of actions taken to eliminate modern slavery and overcome grey areas of work conditions. Practical implications The paper helps to create an improved understanding of different types of exploitation in work conditions in different industries and the role accounting might play in research and practice. Social implications Slavery did not end with abolition in the 19th century. Instead, it changed its forms and continues to harm people in every country in the world especially in certain industries, of which several are discussed and accounting advice proffered. Likewise, as reflected in Special Issue papers, the role of accounting in reducing less extreme forms of poor work conditions is also considered. Originality/value The paper provides an overview of different forms and degrees of exploitation in work conditions and identifies the need for and areas of accounting research in this emerging area.
... Company employees can also be trained on recognizing signs of human trafficking and where to report it . The Global Business Coalition Against Human Trafficking (gBCAT) is comprised of business firms whose mission is to prevent and reduce human trafficking (Smith & Betts, 2015). Prominent members include Microsoft, Carlson, Amazon, and Coca-Cola. ...
Article
Helping students to gain an understanding of accounting issues and to master technical skills are critical to their success in the accounting and business fields. At the same time, educators can assist students by helping them develop character and personal values such as compassion. Being compassionate has a positive impact on a person’s life as well as on others with whom he or she interacts, such as colleagues, customers, investors, people in the supply chain, and others. One of the most well-known stories about compassion was told by Jesus of Nazareth, in his parable of the Good Samaritan. The well-known story offers a practical example of what it means to love other people, notably by a person of one race toward a person of another race. Research shows that compassion contributes to higher life satisfaction, better job performance, and improved organizational success. This exploratory study examines the levels of compassion in accounting and business students, provides a gender analysis, and considers the importance of compassion to students pursuing careers in accounting and business. Findings show that there is a significant difference in levels of compassion between female and male students, and that compassion is important to student perceptions of their careers in accounting and business. Educators would do well to discuss compassion with their students, making them aware of its benefit to them personally and to the organizations in which they will work.
... Company employees can also be trained on recognizing signs of human trafficking and where to report it (Martin et al., 2017b). The Global Business Coalition Against Human Trafficking (gBCAT) is comprised of business firms whose mission is to prevent and reduce human trafficking (Smith & Betts, 2015). Prominent members include Microsoft, Carlson, Amazon, and Coca-Cola. ...
... Notwithstanding the fact that the Australian Government supports the introduction of legislation on modern slavery, to date there is no systematic research which examines how Australian companies are currently dealing with the issue. In some ways, this is not surprising as research on the area of modern slavery in general is underdeveloped (Smith and Betts, 2015). Crane (2013), for example, notes there is a near vacuum of research in the management literature in relation to modern slavery. ...
Purpose Given the impending introduction of legislation requiring large Australian listed companies to make supply chain disclosures about modern slavery, the paper aims to reveal current voluntary practice. The purpose of this paper is to provide a benchmark for assessing the current engagement of large companies with modern slavery in Australia. Design/methodology/approach Institutional theory provides the foundation for assessing current voluntary practice in relation to modern slavery disclosures by large Australian listed companies. Content analysis is used to identify quantity and quality of modern slavery disclosures of the top 100 companies listed on the Australian Stock Exchange. The contents of annual and standalone reports available on websites, as well as other online disclosures, are examined using terms associated with modern slavery identified from the literature. Findings Evidence gathered about modern slavery disclosures by ASX 100 companies shows information in annual and standalone reports reveal far less than other disclosures on company websites. Overall, the volume and quality of disclosures are low and, where made, narrative. A wide range of themes on modern slavery are disclosed with bribery and corruption and human rights issues dominant. Although currently in line with institutional theory, as there appear to be mimetic processes encouraging disclosure, results support the idea that legislation is needed to encourage further engagement. Research limitations/implications The paper provides a baseline of understanding about the volume and quality of modern slavery disclosures as a foundation for future research into the practices of Australian companies prior to the signalled introduction of legislation mandating reporting. It also identifies potential lines of research. The sample only examines large Australian listed companies which restricts generalisation from the results. Originality/value This is the first academic research paper to examine quantity and quality of modern slavery disclosures of large Australian companies. Results add support for the introduction of legislation by government.
... In this regard, Petersen and Lemke (2015) highlighted the importance of adopting corporate social responsibility policies and the necessity of inducing direct suppliers to adhere to these practices, which can lead to a domino effect within supply chains. Smith and Betts (2015) recommended mapping of suppliers for traceability and certification as methods for evaluation and management of reputational risks. However, the use of public information to manage social and environmental risks in supply chains is rarely addressed in the SCM literature. ...
Article
Full-text available
Increased production of Brazilian beef has been associated with negative impacts in the Amazon region. Supply chain interventions are increasingly common to avoid social and environmental consequences in the area, but evidence about how companies have managed these efforts is scarce. The present study identified the main sources of reputational risks in Brazilian Amazon beef supply chains and the actions taken by slaughterhouses to manage these types of risk. A multiple case study was developed in Brazilian beef supply chains that have suffered consequences to their operations from consecutive actions of stakeholders that link meat production with deforestation and the worst practices of production in the Amazon region. Public agreements with stakeholders and the development of supplier management were used to identify reputational risks. The present study also describes the types of risk and how they are mitigated. Based on the results, the authors propose a set of risk management practices in the supply chains to manage risks through stakeholder engagement, use of government open data sources, and sharing information with direct suppliers.
Chapter
In this chapter, we define marketization as the promotion of market ideologies and the expansion of the market into areas traditionally beyond its purview. We track its intellectual roots to the writings of Adam Smith, linking these with the concepts of American Exceptionalism and Manifest Destiny. The narrative continues via the scholarly outpourings of the German Historical School (GHS) whose work counterpointed Smith’s opinion that markets were the most efficient mechanisms for distribution. By contrast, the GHS stressed the role of state intervention in the market. We subsequently examine the economic, cultural and geopolitical turbulence between 1930 and 1970, engaging with the Cold War climate and the articulation of Modernization Theory. Reference is also made to the promotion of social marketing and its connections to structural adjustment programmes. This leads us to scrutinize the enrolment of human beings as cogs in ongoing neoliberal expansion. Finally, we explore the question of how we arrived at the point where people have become products, engaging with issues of subjectivity, self-discipline and Erich Fromm’s interpretation of a “marketing orientation”. The processes of marketization, we conclude, now reach into everyday life. Even so, there are limits to marketization, as the anti-capitalist and “prepper” movements serve to underline.
Article
Human trafficking is one of the most lucrative international criminal activities and is widespread across a variety of industries. The response to human trafficking in corporate supply chains has been dominated by analyses of due diligence obligations. Existing scholarship, however, has cast doubt on the effectiveness of corporate due diligence in addressing human trafficking, because human trafficking is the outcome of macro-level social structures that are created by and consist of multiple actors, including business. The outsourcing and sub-contracting model provides incentives throughout the global supply chain to sub-contract further to reduce the cost of labor, which has led to human trafficking remaining a pervasive problem. Business responsibility for human trafficking derives from the fact that business decisions and strategies enable the conditions that allow for human trafficking to occur within their supply chains. To address human trafficking, we propose a social connection and political responsibility model, based on Iris Marion Young’s analysis of social connection and structural injustice, that is holistic, forward-looking, and outcomes-oriented. We differentiate between businesses with a strong connection to human trafficking and businesses with a weak connection, and within this distinction delineate different pathways that firms can take to meet their political responsibilities to address human trafficking. We conclude with implications for future research.
Article
Full-text available
This article explores what is known about human trafficking and labor exploitation in the form of forced labor, and how this is regulated in business supply chains and the service industry. Using case studies, this article examines three approaches to regulating exploitative labor: (a) stakeholder initiatives, including certification schemes; (b) government legislation (Government Procurement Regulations and the California Transparency in Supply Chains Act); (c) consumer and employee advocacy. The article first addresses what is known about exploitation in the labor sector, then addresses sector-initiated programs, followed by domestic legislation aimed at regulating businesses. The final section addresses consumer and employee advocacy initiatives. A discussion follows each section addressing the effectiveness and limitations of these mechanisms in decreasing instances of human trafficking and forced labor.
Article
Full-text available
This article explores what is known about human trafficking and labor exploitation in the form of forced labor, and how this is regulated in business supply chains and the service industry. Using case studies, this article examines three approaches to regulating exploitative labor: (a) stakeholder initiatives, including certification schemes; (b) government legislation (Government Procurement Regulations and the California Transparency in Supply Chains Act); (c) consumer and employee advocacy. The article first addresses what is known about exploitation in the labor sector, then addresses sector‐initiated programs, followed by domestic legislation aimed at regulating businesses. The final section addresses consumer and employee advocacy initiatives. A discussion follows each section addressing the effectiveness and limitations of these mechanisms in decreasing instances of human trafficking and forced labor.
Article
Full-text available
Kraljic's (1983) purchasing portfolio approach holds that different types of purchases need different sourcing strategies, underpinned by distinct sets of resources and practices. The approach is widely deployed in business and extensively researched, and yet little research has been conducted on how knowledge and skills vary across a portfolio of purchases. This study extends the body of knowledge on purchasing portfolio management, and its application in the strategic development of purchasing in an organization, and on human resource management in the purchasing function. A novel approach to profiling purchasing skills is proposed, which is well suited to dynamic environments which require flexibility. In a survey, experienced purchasing personnel described a specific purchase and profiled the skills required for effective performance in purchasing that item. Purchases were categorized according to their importance to the organization (internally-oriented evaluation of cost and production factors) and to the supply market (externally-oriented evaluation of commercial risk and uncertainty). Through cluster analysis three key types of purchase situations were identified. The skills required for effective purchasing vary significantly across the three clusters (for 22 skills, p<0.01). Prior research shows that global organizations use the purchasing portfolio approach to develop sourcing strategies, but also aggregate analyses to inform the design of purchasing arrangements (local vs global) and to develop their improvement plans. Such organizations would also benefit from profiling skills by purchase type. We demonstrate how the survey can be adapted to provide a management tool for global firms seeking to improve procurement capability, flexibility and performance.
Article
Full-text available
This article examines website headings used by Fortune 500 companies in their efforts to inform stakeholders about corporate social responsibility (CSR). Instead of using “Corporate Social Responsibility” as a heading, companies often use specific terms to identify various CSR initiatives. The purpose of this article is to identify common CSR-related headings that are currently used on Fortune 500 company websites. Data were collected from all Fortune 500 company websites. The websites were further analyzed according to manufacturing, retailing, and service industry. Interesting similarities and differences were found. This study provides guidance on articulating CSR-related activities to consumers, employees, and stakeholders.
Article
Full-text available
Brand associations affect image and one source of brand association is a company’s reputation. While the relationship between a positive corporate reputation and operational performance is intuitively appealing, there has been relatively little empirical research. This study, using a comprehensive approach, seeks to empirically test the relationship and thereby determine whether firms with a positive brand image, that is those with a positive reputation, experience an economic benefit. Findings are that these firms are associated with a significant market value premium, superior financial performance, and lower cost of capital. Given these findings, marketing managers would do well to strive to build and maintain a positive reputation.
Article
Full-text available
This paper aims to map out the research that currently exists and make note of the research gaps that need to be filled in order to establish appropriate and effective policies and programmes for trafficked victims. We attempt to answer the following questions: Who is funding and who is conducting research on trafficking in human beings in North America? What methodologies and data sources are used to conduct this research? What are the foci of trafficking research in North America? What types of studies are conducted? What are the research gaps that need to be filled? (excerpt)
Article
We examine the connection between the internal heterogeneity of stakeholder groups and the resource dependence dynamics characterizing their relationships with firms. Empirically, we test how this heterogeneity is related to environmental performance and document a positive relationship between community stakeholder pressures and environmental performance at the plant level. Our results suggest that varying stakeholder characteristics and the dependencies associated with them are related to varying levels of environmental performance. Further, managers recognize that their organizations' dependence on stakeholders is not uniform and take this dependence into account when shaping policies toward the natural environment.
Article
This paper makes a case for analysing the new insecurities introduced or worsened by globalization from a human security perspective. The author examines the ways in which globalization is changing the word -- economically, politically, and in terms of information and communications technology -- and then reviews the new insecurities that require policy attention. The paper specifically tackles the issues of global crime, trafficking in humans, instability in financial markets, threats to job security, the spread of disease and internal conflicts.
Article
The recent growth of the Internet and World Wide Web has become a focus for both the popular press and social science scholars. The authors of this study examined how large corporate entities are making use of the Web to present themselves as socially responsible citizens and to advance their own policy positions.Analysis of a random sample of Fortune 500 companies revealed 90% had Web pages and 82% of the sites addressed at least one corporate social responsibility issue. More than half of the Web sites had items addressing community involvement, environmental concerns, and education. Few corporations, however, used their Web pages to monitor public opinion on issues or advocate policy positions. The number of social responsibility items on a Web page was positively correlated with the size of an organization and the implementation of tools to make a Web site more navigable, but was unrelated to a corporation's ranking within its industry. The researchers also distinguished between messages that proclaim the corporation does “no-harm”, and items that extol an organization's “good deeds.” Industry groups differed on the no-harm subscale but not good deeds.
Article
The purpose of this paper is twofold. The first objective is to examine the core resources that make environmental management system (EMS) a potential basis of sustainable competitive advantage from the resource-based view of the firm. The second objective is to investigate the set of core resources from the contingency perspective. Particularly, experience in implementing other manufacturing systems and the stage of EMS implementation were tested as the contingency factors. The proposed model and its related hypotheses were tested using structural equation modeling on a large-scale database consisting of 1453 respondents. The results showed that it is the tacit resources within an EMS, in the form of top management team's strategic perception, cross-functional cooperation, and environmentally responsible suppliers, which help explain firmspsila operational performance. The findings provided the general principles in investment decisions of EMS. However, the results also demonstrated that the pattern of the core resources varies across firms with different experience in other manufacturing systems and at different stages of EMS implementation. As a result, there is no standard bundle of critical resources for each firm. Rather, firms need to tailor their resource investment decisions in light of these factors beyond the general principles.