Value Chain Responsibility: A Farewell to Arm's Length

Posted: 21 Sep 2005

See all articles by Robert A. Phillips

Robert A. Phillips

York University - Schulich School of Business

CRAIG B. CALDWELL

Butler University - College of Business Administration

Abstract

The trend toward increased levels of business interconnectedness in the value chain has clouded the issue of responsibility for business practices. Firms have historically denied responsibility for many questionable practices by suggesting that such acts were committed somewhere else in the value chain and that, because they are separated by an arm's length transaction, they are not responsible. Emerging evidence suggests that in light of the interconnected and networked business environment, the arm's length defense is growing less effective. We discuss the practical realities that firms are facing in the highly networked environment and offer examples of each.

Keywords: Outsourcing, stakeholder, ethics, value chain

JEL Classification: M19

Suggested Citation

Phillips, Robert A. and Caldwell, Craig, Value Chain Responsibility: A Farewell to Arm's Length. Business & Society Review, Vol. 110, No. 4, pp. 345-370, December 2005, Available at SSRN: https://ssrn.com/abstract=800787

Robert A. Phillips (Contact Author)

York University - Schulich School of Business ( email )

4700 Keele Street
Toronto, Ontario M3J 1P3
Canada

Craig Caldwell

Butler University - College of Business Administration ( email )

4600 Sunset Avenue
Indianapolis, IN 46208
United States

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