When companies uphold corporate social responsibility (CSR), they are accountable to various internal and external stakeholders. Internal stakeholders may include the shareholders, employees, and management while external stakeholders are the consumers or the buying public, suppliers, creditors, competitors, and the local community or the society at large. Let us focus on how companies practice social responsibility towards its supplier and creditors since these players in the business aspect project important roles to the businesses.
Who are the Suppliers and Creditors?
It is uncommon to consider suppliers and creditors to be part of the company’s stakeholders. But then again, they play a vital role in any business success so they are also worthy of being provided with CSR values. In strict business structure, the suppliers are primarily responsible for providing or delivering the raw materials and resources that a company needs in the production.
Suppliers indirectly affect marketing and business aspects such as product quality, price, and production of goods. Good quality raw materials also mean quality-made final products and fair market price. Availability of supplies determines production workload and quantity.
Similarly, creditors have an impact on the business transactions of companies. Usually, a business purchases goods or raw materials on credit from various suppliers. As an organization that buys resources on credit, CSR can be extended on this aspect by being mindful of the obligation to pay religiously and timely for raw materials that have been delivered and used.
Considering the stiff market competition across industries, companies are doing their best to minimize costs but not pushing too much on sales as a way of gaining profit. This can be addressed by keeping good relationships with suppliers since they can help bring down the cost by offering reasonable prices for the resources. However, in the same way that companies uphold ethical business transactions and negotiations with them, suppliers must also practice sustainable and responsible acts.
Dealing with Suppliers and Creditors
It is important to know that in business, companies and suppliers must maintain a good relationship based on mutual respect. In dealing with suppliers, there are certain key points that firms must take note of.
First, companies must seek fairness and truthfulness in all dealings with suppliers especially pricing and licensing. Next, companies should make certain that any business transaction with suppliers must be free from any form of coercion and unnecessary litigation. Also, firms must promote long-term stability in their relationship with the suppliers to pay back the good value, quality, and reliability they gained.
Dealing with suppliers properly means sharing information with them and making them part of the planning processes. On the part of the creditors, one of the best ways to deal with suppliers is to be responsible in making timely payments according to the agreed terms and conditions of the trade.
Lastly, organizations must be ethically responsible by choosing only suppliers with fair and just employment practices and those that have respect for human dignity. So, a supplier that enforces child labor in its activities is not a good example of who to deal business with.
Good CSR Practice from Suppliers and Creditors
Relationship between suppliers and creditors must be mutually beneficial so CSR practice ought to be extended to both groups. There are three fundamental requirements every company must need from their suppliers: legal compliance, quality control, and environmental conservation. A business that aims at succeeding must have a good discernment in selecting suppliers.
Companies share common requirements from their suppliers but there are companies that would establish their own prerequisites and conditions before purchasing goods from them. Suppliers must always be in compliance with the national or regional laws and maintain proper observance of social norms. Moreover, suppliers must be fair in its dealings with creditors and organizations. They must also maintain the approved quality and delivery standards expected from them.
As suppliers, they have to maintain a stable supply and availability of raw materials as well as eco-friendly goods. Additionally, they must keep their clients and purchasers abreast of any new information on new technology and latest raw materials. Lastly, confidentiality must be strictly practiced. This means no unnecessary disclosure of information shared by the company and its activities.