The Links in the Chain Case

Tom Petty, CEO of Blue Enterprises, a Vancouver-based company, trading on the TSE, had just finished a conference call with several of the company's major shareholders. Although Blue was making reasonable profits, investors had noticed that Blue's competitors had been taking actions which included ensuring their suppliers were meeting international labour standards and other recognized business practices with social values. Some investors were concerned that if Blue did not demonstrate a commitment in this area, there could be adverse reactions from its customers.

Blue's product lines included container loads of imported, assembled plastic products and stamped metal products such as kitchen gadgets, cooking utensils, condiment containers, and kitchen towels, aprons and bibs sold to the household consumer market in North America and Europe through major retailers. Historically Blue had manufactured the products within Canada but began to outsource production when faced with rising domestic costs and lower production costs in Asia.

Although profits were important, the investors wanted to be sure that customers would be satisfied with Blue's business practices. The investors wanted Tom to provide an update as to how Blue connected social responsibilities to its business interests. The report would be discussed at their next quarterly meeting related to Blue's outsourcing initiatives to be sure the investors' interests were going to be met for the long-term.

Petty was surprised by their concern but replied that he would ensure that Blue was meeting best practices and was a good corporate citizen. Petty reminded them of the charity golf tournaments they sponsored each year, with proceeds going to buy hospital equipment in Vancouver.

Tom walked down to the purchasing office and asked the long-time manager, Bryan Adams to provide a report within the next month as to the integrity of Blue's supply chain, given the comments from the investors.

Bryan agreed but was a little uncertain as to what to report on.

What steps could Bryan take to respond to Tom's request?

This is a case study used in the Good Planets are Hard to Buy seminar. If you were Bryan, what steps might you take to respond to your boss?