Literatura Americana

Building a Strong

Corporate Ethical Identity:

KEY FINDINGS FROM SUPPLIERS




The building of Corporate Ethical Identity, a process referred to as “ethicalization,” is an important strategic imper-ative and represents an integral part of a firm’s attempts to build a strong corporate identity across its various stakeholders. This article focuses on ethicalization at SAB Ltd (SouthAfrica’s leading producer and distributor of alcoholic and non-alcoholic beverages, and one of the nation’s largest manufacturing firms) and the impact of its efforts on supplier perceptions. Leaders and managers must consider six factors that drive the formation of ethical identity across an organization’s stakeholders: trusted relationships; organizational citizenship; develop-ment and enforcement ofethical policy; procurement contracting; provision of information; and procurement administration. (Keywords: Corporate social responsibility, Corporate image, Ethics)

although many image and identity studies have focused on customer and employee stakeholders, very little attention has been paid to sup-pliers as a stakeholder group. This is surprising given the dependencies thatorganizations have on suppliers for their contribution to product

and service quality, cost management, the building of brand equity, and risk man-agement. Consumers and other stakeholders expect a company to act in an ethical manner and it is reasonable to assume that most companies, in time, will be part of a supply chain that experiences a significant violation of ethics. Mattel did not paint its toyswith lead paint; Del Monte did not choose poisonous wheat gluten for its pet food; Toshiba did not build flammable batteries in its laptops; and Dole did not put E-coli bacteria in its pre-packaged salads. Toyota’s recall of some 10,000 vehicles for “sticky pedals” during 2009 and 2010 was due in part to a breakdown in the buyer-supplier quality relationship, a capability that had previously helpedToyota become the world’s largest vehicle manufacturer.1 In these examples, suppliers were responsible for these problems, but building an ethical supply chain also requires buyers to consider their ethical behavior vis-à-vis their suppliers. Although ethical transgressions on the part of customers receive far less publicity, the focus on cus-tomer ethics is growing. Financial services companiesare increasingly expected,2 and in certain cases regulated,3 to avoid complicity in corruption. In 2006, British





supermarket chain Tesco yielded to pressure from supplier Tyrrells Crisps to stop supplying grey market products.4 As organizations increasingly deepen their partnerships with suppliers, they need to concern themselves not only with the eth-ical behavior on thepart of suppliers, but also with how suppliers view their organizations as well. Positive stakeholder perceptions of an organiza-tion’s ethical identity has been shown to lead to enhanced stakeholder satisfaction and positively influenced financial performance.5

Corporate Identity is the signature that runs through the core of all a corporation does and com-municates.6 At first, theconcept was used by iden-tity and image consultants as well as advertising agencies to develop corporate logos and related

graphics. Today, it is used more broadly to encompass the total picture of the way organizations present themselves to different stakeholder groups. Logos and symbols are important, but ultimately, how organizations manage and communicate their behaviors matters more. Recentcriticisms of BP after its recent oil spill in the Gulf of Mexico have focused not only on what the company did, but also on its poor com-munications with stakeholders.7

Organizations seeking to build a consistent image and reputation must align many types of identities, one of which is conceived identity, that is, the collective stake-holder images of the organization.8 Every stakeholder...