La governance collaborativa nella gestione della supply chain

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1 L internazionalizzazione responsabile Ancona, Camera di Commercio, Sala Parlamentino, 27 gennaio 2011 La governance collaborativa nella gestione della supply chain Antonio Tencati CReSV - Università Bocconi

2 Contents From Developed to Developing Countries: The Reverse Supply Chain Are the Current Practices Sustainable? Some Questionable Examples Collaborative Models of Governance: Alternative Practices A Sustainable CSR 2

3 From Developed to Developing Countries: The Reverse Supply Chain Global supply chains: 3 passages (Tencati, Russo, Quaglia, 2010) 1: Ethical consumerism (from consumers to MNCs) 2: CofC and International Certifications (from MNCs to manufacturers) 3: Supplier selection on the basis of more responsible and sustainable criteria (from manufacturers to raw material suppliers) Ethical Consumers MNCs Manufacturers Raw Material Suppliers 3

4 Are the Current Practices Sustainable? Some questions: What is the impact of the CSR-oriented sourcing policies of MNCs on suppliers located in developing countries? Are the sustainability requirements of corporations affordable for local players and SMEs? Are these requirements drivers of a strengthened competitive performance or technical barriers? Are sustainability-oriented sourcing policies really sustainable for suppliers located in developing countries and for their communities? 4

5 Some Questionable Examples (1) The Viet Nam case (Tencati, Russo, Quaglia, 2010): CSR does make business sense even in developing countries but only for the enterprises big and rich enough to comply with imposed codes of conduct and international social standards The compliance with CSR requirements triggers monetary and nonmonetary costs (e.g., dissemination costs) CSR as a new form of exploitation/protectionism? 5

6 Some Questionable Examples (2) The Italian case (Russo, Tencati, 2009): Antonio Tencati This study on a sample of 3,626 Italian firms provides evidence that small, medium-sized, and large firms develop different strategies with regard to supply chain management Large firms share with small ones a poor aptitude in maintaining consistent CSR behaviors along the supply chain A more active and responsible role seems to be played by mediumsized enterprises Medium-sized firms stay in the middle of the chain, usually supplied by small firms and supplying large firms or selling directly to the market. They can manage their linkages with suppliers and customers, assuring responsible behaviors along the supply chain Small enterprises are affected by sourcing policies established by other players and large firms seem to exploit their strong bargaining 6 power over suppliers and clients

7 Some Questionable Examples (3) Critical perceptions of CSR in developing countries: CSR is a mandatory requirement, that is, an imposition of foreign companies on local producers according to some Chinese scholars The same position fostered by some representatives of developing countries during the plenary meetings of the ISO Working Group on Social Responsibility, aimed at defining ISO The development of CSR policies along the supply chain is also a cultural challenge Benefits of CSR have to be proved to local players: The need for a specific and tailored business case? 7

8 Collaborative Models of Governance: Alternative Practices (1) Antonio Tencati Coop is the largest Italian retail chain, with: a 18.1% market share in the grocery market 7,205,497 members grouped in 119 territorial consumers cooperative societies 1,446 points of sale and 1,722,384 square meters 56,384 employees a 2009 turnover of 12,764 million Euros Coop has built and maintains a distinctive positioning on the market thanks to its true and genuine commitment to sustainability. To pursue this goal, the Coop system has developed a broad set of initiatives: New performance management and reporting tools - The Social Balance/Report SA Collaboration along the entire supply network for the ethical sourcing Private label - A successful experience to foster sustainable patterns of production and consumption Investing in the local communities The Coop system as an engine of development 8

9 The illycaffè case (Perrini, Russo, 2008): Antonio Tencati Collaborative Models of Governance: Alternative Practices (2) The family-owned company located in Trieste sells a unique single blend of premium-quality coffee worldwide This top-quality blend, at the basis of the growth and competitive success of the Group, is deeply rooted in strong collaborative relationships with farmers in South and Central America, India, and Africa illycaffè and the local suppliers develop long-term, mutually beneficial relationships and build robust partnerships according to a virtuous cycle of sustainability based on four principles: Sustainable development and quality an inseparable pair 100 percent of illy coffee is purchased directly from local producers Quality as a tool for improving the living conditions of farmers over time Fair price (Arabica coffee beans paid about 30-35% more than the market price) 9

10 Collaborative Models of Governance: Alternative Practices (3) Slow Food defends and promotes good, clean and fair food. Its philosophy is based on three principles: the small, the local, and the slow (Slow Food, 2009; Tasch, 2008) One of the most important projects carried on by Slow Food is Mercati della Terra, an initiative aimed at promoting markets of local producers in Italy and all over the world The project intends to build short supply chains of seasonal, territorial, and high-quality products thanks to the joint efforts of local producers, local enterprises, local communities, and municipalities The purposes of these efforts are the following: Valuing typical traditions Shaping new connections and social networks among producers and co-producers Bypassing brokers Reducing transports Safeguarding the environment 10

11 Collaborative Models of Governance: Alternative Practices (4) Values-driven companies participating in the Social Venture Network in the USA are other advanced examples of collaborative ways of doing business (Cohen, Warwick, 2006): Eileen Fisher, a well-known women s clothing producer, adheres to SA8000 and all the factories that produce for this firm are required to adopt SA8000 and demonstrate continual improvement in the protection of workers rights. Local producers are not alone in this compliance process: Training is provided to factory managers and workers Pura Vida Coffee, the premier sustainable beverage company. The mission of Pura Vida is to Create Good. By purchasing and selling only 100% Fair Trade, organic, shade-grown coffee, Pura Vida Coffee ensures that farmers in America, Africa, and Asia receive a fair wage and can support their families, and that the natural habitat they live in is preserved. Through its charity-pura Vida Partners-, Pura Vida operates programs for at-risk children in areas where its coffee is grown 11

12 Collaborative Models of Governance: Alternative Practices (5) 12

13 A Sustainable CSR Going beyond the traditional top-down approach along the supply chain Building collaborative networks to face sustainability and competition challenges Adopting a multiple-bottom-line thinking and a collaborative enterprise (Tencati, Zsolnai, 2009) perspective. This means: Fostering rather than imposing CSR Developing innovative partnerships involving companies, local authorities, international players (such as the United Nations Global Compact) and civil society at large Working on locally-rooted solutions, a focused educational agenda and a targeted capacity building Co-designing system innovation 13

14 Contacts Antonio Tencati CReSV Center for Research on Sustainability and Value, Università Bocconi Tencati A., Zsolnai L. (Eds.), 2010, The Collaborative Enterprise: Creating Values for a Sustainable World, Peter Lang AG - International Academic Publishers, Oxford-Bern

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