Every discount has an author. Behind every rock-bottom price at a fast-fashion checkout or a same-day delivery notification sits a chain of decisions made by warehouse operators, factory owners, and — increasingly — the business leaders who choose to sign contracts with them. According to Dr. Burkard F. M. Schemmel, faculty member at the European Institute of Management (EIM) and author of a comprehensive doctoral study on business ethics and financial performance, the assumption that aggressive pricing is simply "how the market works" no longer holds up — legally, morally, or strategically.
In a recent analysis published on LinkedIn, Schemmel argues that the drive toward ever-lower prices in retail and e-commerce is not a neutral economic phenomenon. It is a structural mechanism that displaces cost onto the stakeholders with the least power to resist it: warehouse and logistics workers, and factory labourers across global supply chains. For business leaders, he suggests, the ethical question can no longer be confined to the consumer's shopping basket. It is embedded in every B2B contract signed with a platform, supplier, or retailer whose business model depends on externalising human cost.
Where the Cost of "Cheap" Actually Lands
The numbers behind the bargain are becoming harder to ignore. Research from Cornell University's ILR School, published in 2026, found that e-commerce fulfilment centres produce measurably worse working conditions than traditional warehouses — more intense, more dangerous, and without corresponding wage increases. The US Government Accountability Office reported in 2024 that serious injury rates among warehouse workers rose by 20 percent between 2018 and 2022, with last-mile delivery workers experiencing a 23 percent increase over the same period.
The picture in manufacturing tells a parallel story. Ultra-fast fashion platforms, which list thousands of new styles daily at prices that defy any credible cost-of-production calculation, place immense pressure on suppliers across the Global South — pressure that translates into suppressed wages, extended working hours, and unsafe factory conditions, with women disproportionately affected. The environmental toll compounds the human one: the fashion industry alone is estimated to generate up to 10 percent of global carbon emissions and roughly 92 million tonnes of textile waste each year.
For business leaders, Schemmel argues, the relevant question has shifted. It is no longer simply how to compete on price, but whether — and how — to engage with business models that are structurally dependent on exploiting stakeholders who never appear at the negotiating table.
A Framework for Shared Responsibility
To make the ethical dimension of these decisions actionable, Schemmel draws on two bodies of scholarship. Philosopher Iris Marion Young's "Social Connection Model," developed in her influential work on structural injustice, holds that individuals and organisations bear a degree of responsibility for injustice when they participate in the social and economic processes that produce it — even without direct causal liability. Building on this, Dahan, Lerner, and Milman-Sivan's "Labour Model of Shared Responsibility" allocates accountability across global supply chains according to five factors: connectedness, contribution, benefit, capacity, and power. Under this model, large retailers and their B2B partners carry a disproportionate share of responsibility, precisely because they possess both the capacity to influence conditions and the power to set the terms of trade.
This is no longer only a philosophical argument. The EU's Corporate Sustainability Due Diligence Directive, which entered into force in July 2024, requires companies to identify, prevent, and mitigate adverse human rights and environmental impacts throughout their value chains — and explicitly prohibits contracts that simply shift due diligence obligations onto business partners. Germany's Supply Chain Act had already established comparable obligations at the national level. What was once a voluntary aspiration for corporate leaders is fast becoming a statutory one.
The Six Principles of Alterocentric Business Ethics
At the centre of Schemmel's argument is the framework of alterocentric business ethics, developed through his doctoral research at EIM. Grounded in stakeholder theory, alterocentrism reorients business decision-making around the interests of "the other" — employees, suppliers, communities, and future generations — rather than treating shareholder return as the sole determinant of a good decision. Crucially, this is not framed as a trade-off against performance: across a representative sample of 309 European firms, Schemmel's research identified statistically significant positive correlations between alterocentric business practice and financial performance, with coefficients ranging from r = 0.509 to r = 0.915 across the dimensions measured.
Applied to supply chain and procurement decisions, the six principles translate into concrete practice:
1. Alterocentric Business Strategy — Rejecting pricing models that structurally require supplier exploitation, and embedding fair compensation standards into procurement strategy as a non-negotiable element, not a CSR add-on.
2. Holistic Stakeholder Engagement — Consulting directly with worker representatives, trade unions, and NGOs active in the supply chain, rather than relying solely on audits commissioned by the buying firm itself.
3. Predictable Decision-Making and Accountability — Setting non-negotiable minimum pricing thresholds and monitoring frameworks that hold under competitive pressure, rather than being abandoned when a cheaper offer appears.
4. Anchoring in Leadership — Executives visibly declining profitable but exploitative deals, and modelling ethical procurement rather than delegating it entirely to compliance functions.
5. Responsible Business Behaviour — Shifting from transactional, short-term supplier relationships toward long-term partnerships that allow suppliers to invest in worker welfare and safety.
6. Credible Transparency — Publishing meaningful data on the pricing pressure exerted on suppliers and its downstream impact on wages and working conditions, rather than relying on self-congratulatory CSR reporting.
Why This Matters for Tomorrow's Business Leaders
Schemmel is careful to distinguish between the individual consumer, whose choices are often shaped by genuine financial constraint, and the business leader, whose decisions are made with full knowledge of their consequences and with considerably more power to change them. It is at this second level — strategic, structural, and increasingly regulated — that ethical leadership capability becomes a professional requirement rather than a personal virtue.
This is precisely the terrain that EIM's doctoral and executive programmes are designed to prepare leaders for. The MBA in Logistics and Mobility Management equips supply chain and transport professionals to navigate exactly the pressures described in Schemmel's analysis — from resilience and risk management to sustainability and regulatory compliance across global logistics networks. For those seeking to conduct original research at the intersection of ethics, leadership, and organisational performance, EIM's Doctor of Business Administration offers a research-driven pathway to apply frameworks like alterocentrism to real business challenges. And EIM's Institute for Societal Performance Development continues to produce the empirical research — including Schemmel's own doctoral study — that underpins this growing body of applied business ethics.
Conclusion
The illusion of the bargain persists only as long as its true cost stays invisible. As regulatory frameworks like the CSDDD make supply chain accountability a legal obligation rather than a reputational choice, the leaders who understand — and can operationalise — an alterocentric standard will be the ones best positioned to build supply chains that are both ethical and resilient. That capability is not acquired by accident. It is built through rigorous study, applied research, and a genuine commitment to leading differently.