The Downward Effect of Ethics in the Value Chain

Abstract: The media has responded toward unethical behavior in rainforests during the ‘80’s, triggering the still upcoming trend of investigation of ethical considerations, as described by Macfarlane (1995). Many researchers are constantly improving the ethical theories and showing continued change in the perception of ethics (Svensson & Wood, 2007) The purpose of this research is to identify the effect of ethics on the proactive or reactive behavior of companies, with a downward tendency provided in the value chain. The theoretical framework consists out of a set of theories supporting the goal of identifying ethics within a company, applying a new business ethics model and measuring the pro-active and re-active behavior of the stakeholder in the value chain. Finally, all the theories used, are combined in an integrated theoretical model used to justify the collection of empirical data and to give structure to the analysis. The empirical data has been gathered through non structured and semi-structured interviews with customers, employees within the case company, and a supplier to the case company. These findings are complemented with secondary data gathered through websites, annual reports, codes of conduct, media articles and others sources. The findings of the study showed that the (in the theoretical framework) assumption of a downward effect in perception and change in ethical considerations is not as obvious as previously thought. Within this case study, the ethical influences come from the case company, situated in the middle of the value chain, influencing both the consumer and the supplier, in ethical considerations.