Case Background:
You are the purchasing manager at famous shoe maker and u've learned reports of unfair wage rates at one of your key supplier. You need to decide whether you should discontinue your relationship with this supplier.
Key questions:
1) What is the labor rates that are currently paid to the employees?(VC. the market rates vs. int'l standards)
2) What are the reasons for discrepancies (i.e. are employees compensated in othe ways?)
3) How much does fanous shoe buy from this supplier and what would be the impact of switching to another supplier?
4) What is famous shoe maker's internal policies regarding labor conditions of suppliers? How will this action impact different stakeholders?
Options and Hypothesis:
1) Economics argument - lowest cost wins
2) Universality - if you were placed in the different stakeholder's shoe, would you make the same decision and feel fair?
Data Requirement
1) Labor wage rates for your supplier, its competitor, local market rates, int'k rates
2) Company policies regarding supplier labor policies
3) Cost analysis of switching suppliers
Data Collection and Analysis:
After you collect the data, then you can look at how your questions are answered:
1)  Labor rates appears to be much lower than int'l standards. But it's comparable to local wage rates, the working condition is also not comparable to int'l standard again, similar to local working conditions
2) Famous shoe maker;s company states that each supplier must fairly compensate its workers and it doesn't work with suppliers that have abusive labor pratices. Supplier does seem to operate below int'l standard
3) Economics argument says there is nothing wrong there - supplier legally operates and has the lowest cost - hence, no need to switch
4) Universality- feels fair because the supplier provides livelihood to local community, famous shoe maker enjoys a good margin and the workers get a fair wage in their local community
5) cost of switching supplier implies severe disruption to supply chain
6) Action item: Continue communication with supplier to make ensure no labor standards are violated