ACCA Applied Knowledge · Business and Technology · Social and demographic factors
A clothing retailer finds that customers are increasingly refusing to buy from brands linked to poor factory conditions in supplier countries. Which of the following is the most appropriate response that reflects changing social attitudes?
The retailer should introduce supplier audits and publish a supply chain code of conduct. This responds directly to customer concern about working conditions, protects its reputation and demonstrates accountability, whereas price cuts or secrecy ignore or worsen the damage caused by changing social attitudes.
- AIntroduce supplier audits and publish a supply chain code of conductCorrect
- BCut prices to attract customers who are less concerned with ethics
- CStop all public reporting to avoid scrutiny of supplier practices
Explanation
Audits and a published code address the stakeholder concern directly and protect reputation. Cutting prices ignores the shift in attitudes, and withholding information increases distrust and the risk of boycotts.
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