The article in the url below details Amazon's attempts to make its supply chain more efficient by requiring its suppliers to limit their packaging:
"Amazon is pressuring brands to make their packaging more efficient, which has prompted vendors to make costly changes to their businesses or face fines. Since last fall, Amazon has told companies they must make packaging for thousands of larger products more compact and easier to open by Thursday. Eventually, Amazon wants every product it ships to meet similar standards, according to the company and its suppliers. In a letter to vendors, Amazon said the requirements will make packages more environmentally friendly."
As an indication of its growing purchasing power, it is increasingly able to enforce its requirements:
"The company has also been pushing brands to sell products in quantities and at prices that best fit its storage and delivery systems; brands that don't comply are being cut from Amazon's site."
My question, therefore, is: Is this an example of sustainability (which the CSR community would no doubt applaud) or is it an example of an overly-aggressive, dominant market power forcing suppliers to alter their practices irrespective of their interests/concerns? Or, is it both at the same time and do we care about the distinction?
The article reminded me of Walmart's efforts to squeeze costs out of its supply chain, for example by forcing laundry detergents to introduce concentrate products that are then, supposedly, diluted by the end customer when we put it in our laundry machines? By not shipping the extra water, Walmart (and its suppliers) saved millions of dollars in packaging and reduced fuel costs – savings that are not one-off, but are compounded year-on-year as the products in specific industries, and their supply chains, changed forever.
To me, this speaks to the confounding effect of altruism in the CSR debate. I go into length about this in the textbook in the discussion about voluntary vs. mandatory CSR. It seems to me that the most effective way to bring about change is to incentivize firms to engage in practices that are deemed to be beneficial. If the incentives are real, then the self-interest of the firm is automatically aligned with the broader societal (collective set of stakeholders) interest. But, in order for the incentives to be real, stakeholders have to truly care and reward those firms that engage in the desired practices and punish those firms that shun those practices.
That, in a nutshell, is the argument driving strategic CSR.
Happy Thanksgiving!
David
David Chandler
© Sage Publications, 2020
Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler5e
Strategic CSR Simulation: http://www.strategiccsrsim.com/
Amazon Pushes Brands to be Less Boxy
By Annie Gasparro
July 30, 2019
The Wall Street Journal
Late Edition – Final
B2
