The document describes an ethically complex sourcing situation faced by the author. Specifically, spending €40 million on sourcing in a way that treats partners and employees ethically while also being effective for business. This involves considering factors like wages, working conditions, sustainability, and development impact. The author provides examples of working with partners to negotiate living wages, encourage sustainable development over unsustainable clearing of forests, and weighing up the ethical implications of spending in countries with controversial government policies. The author's input helped resolve these situations by collaborating with stakeholders, enforcing ethical standards, and considering all perspectives to make balanced decisions.

1. Question B.
Describe the situation with greatest
ethical complexity that you have faced in
your professional or academic life, and
how your input helped resolved it?
Daniel Richard Mulvie
IE EMBA APPLICATION 31-05-2015

2. Sourcing Strategy
• How do you spend €40 million in a way that is effective for the
companies business, but also ethically transparent way that it treats its
partners and employees.
• This is the situation with the greatest ethical complexity that I face. Through
examples from my daily work I will demonstrate why the situations are complex
and how I have resolved them
• Our products are sourced in developing countries which is typical in the sports
apparel industry because of low wage levels and the fact that it is very often that
the textile industry can be one of the first industries which can help to develop.
• Sourcing strategies that focus too heavily on minimum spend can be easy to carry
out, but my company as well as my personal interest is to produce products that
respect CSR. Sourcing strategies must fulfil many goals in unison to give us a
competitive edge.
€40m
PROCUREMENT
SPEND
Sustainability
Company
Strategy
Innovation
CSR
Wage Levels
Trade
Agreements
Quality Levels
Active Labour
Force
Lead Times
Margin
Political
Climate
Globalization
Figure 1: Elements of the Sourcing Straregy

3. Example 1. How can I help to solve the
minimum wage issue?
• Are workers in developing countries making products for western
consumers able to clothe, feed and educate their families?
• If they are paid the minimum wage then they cannot. There is a huge
disparity between the minimum wage and a living wage, (See figure 2) in
some countries the living wage can be 5 times as much as the minimum
wage
• Many brands hide behind the fact that they pay the legal minimum wage as
an indicator that they are responsible
• Based on my experience it is ethical to pay the living wage because it will
lead to sustainable development
Figure 2

4. Solution to the minimum wage
• For example I along with partner NGO’s like the Fairware
foundation and the Asian Floor Wage discuss and audit our
partner factories records. We check and negotiate wage
levels across all workers in our partner factories and through
our own production
• I work together with other brands who are members of the
Fairware foundation and others to leverage our business and
encourage factories to pay a living wage
• As part of our CSR strategy we enforce a number of other
principals (outlined in figure 3) to ensure ethical treatment of
the workers in our partner factories and in our own production
WORKER
employment
is freely
chosen
no
discriminati
on in
employment
no
exploitation
of child
labour
freedom of
association
and the right
to collective
bargaining
payment of
a "living
wage"
no excessive
working
hours
safe and
healthy
working
conditions
a legally-
binding
employment
relationship
Figure 3

5. Example 2. How can I ensure the
companies that we work with help to
create Sustainable Development?
• As part of my daily work I visit developing countries where costs are low and there is an abundant
workforce but ethical risks are high. Is helping to create an economy a good enough reason to start
manufacturing there?
• I am currently looking for a new partner as part of our sourcing strategy where labour costs are stable and there are
enough CSR safeguards in place. One of the places being Myanmar, where forests are being cleared for factories
and the rate of development is escalating after the EU lifted it’s trade sanctions.
• On the following page (figure 4) shows opposing methods of development currently used in developing countries

6. Opposing methods of development in
developing countries
Investment in
Myanmar
Clearing of
forest
Building of
factories
Production of
goods
Increased use
of fossil fuels
GDP increase UNSUSTAINABLE
DEVELOPMENT
METHOD FOR ENCOURAGING SUSTAINABLE DEVELOPMENT
Investment in
Myanmar
Redevelopme
nt of Brown
field sites
Building of
sustainable
factories
Production of
goods
Increased use
of renewable
energy
GDP increase
SUSTAINABLE
DEVELOPMENT
UNSUSTAINABLE DEVELOPMENT
Figure 4

7. Solutions
• I look at ways where we can encourage development in a sustainable way by
collaborating with producers who think and act inline with our company values
• We could do more as a company. We are a member of the global economy, even if we act
in the right way it doesn’t mean our current model of consumption is ethical.
• There is an unbalanced relationship between us, the manufacturers and the natural world
and the latter is the one with the quietest voice so far

8. Example 3. How can we ensure that the
money we spend is used for ethical ends?
• Companies don’t want to talk about race, religion, gender or politics when they are doing business. It is often the
white elephant in the room. How do we do business in countries with other multinational companies when their
government could be discriminating against a minority and you are helping to fund them? Politics are rarely a
driving force in CSR strategies.
• We work in Israel which is home to at least 2 of the top five companies in seamless knitting in the world. Part of
profits of the company were used to fund the summer war in Israel in 2014. It would be easy to make a decision
if the facts were clear and someone had been convicted but this is not the case. (See figure 5)

9. Should we care about the
final destination of our spend in
Israel?
We help to
create
€8 Million
in profit is
Israel
Around
€2 Million
goes on tax
in total
Company
has to pay
26% in tax
13%
of the tax
budget is spent
on Defence
€260,000 PA
goes to the
military
ETHICAL?
Figure 5

10. Weighing up the ethical dilemma
• The Israeli government has not been convicted of
any war crimes and thus is innocent until proven
guilty
• We do not doing business with the Israeli
government, but with many people who live their
from diverse backgrounds
• Israelis should have the funds to defend themselves
against aggressors. Continuing to support Israel will
one day lead to peace
• The government has been democratically elected
• The government has been involved in many wars
over the past years
• Israel's government official position on new
settlements on disputed land is in opposition to
international conventions
• Benjamin Netanyahu's recent position on a 2 state
solution has been negative

11. Conclusions
• Spending money in the right way is an ethically complex situation. It touches many peoples lives
around the world and there are both positive and negative aspects to the decisions I make.
• What is clear is that decision making needs to take into account multiple aspects for businesses to
be successful and sustainable
• When choosing the companies to work with I shape my companies ethical view and our manner of
interaction to find solutions to complex problems.
• Business has the power to make a great change in the world because it is important how profits are
achieved.