Walmart: Supplier Monitoring Program

Wal-Mart: Supplier monitoring program

Many foreign factories do not have the same working conditions like United States or any other developed countries. Many global companies nowadays are expanding their operations to the foreign countries due to the availability of cheap labor. The main reason behind cheap labor is that countries fail to comply with high standards and requirements as many other developed countries. Just in the past year, there was a recall of Chinese-made toys," said Sen. Dick Durbin, D-Ill., who suggested detaining and inspecting all Chinese toy imports for lead paint. "We can't wait any longer for China to crack down on its lax safety standards. This needs to stop now before more children and more families are put at risk." (MSNBC 2007)

At the beginning, companies enjoyed cheap labor, which provided higher profit margin, without monitoring the working practice adopted by the foreign company managers. Starting in 1990's companies started facing criticism by instituting complex codes of conduct for suppliers and periodic inspecting supplier facilities to try to improve working conditions and eliminate unfair or abusive environment. Global companies like Nike and Wal-Mart must take this topic seriously or it can hamper their brand image and reputation among customers. In addition to this, it may face fines, penalties which can be costly. The company must follow high working standards in order to avoid both tangible and intangible effects of unethical practices like forced labor, wage discrimination, unhealthy working condition. Nike and Wal-Mart must cease to sell products that do not meet the stringent laws of those such as in the United States, the European Union and others who have higher standards than these countries, such as China, India, Korea and Malaysia.

In response to public criticism over so-called sweatshop usage forced companies like Nike and Wal-Mart to implement an extensive compliance programs for overseas suppliers. Even though the two programs look similar, Wal-mart's