Abstract

This case study, “Christian Dior’s Violation of Supply Chain Ethics: A Threat to the Brand?” explores the negative brand impact that Christian Dior SE (Dior) due to a lapse in regulatory compliance within the supply chain of its Italian unit. In 2024, Italian prosecutors launched a formal investigation into Dior’s Italian unit’s subcontractors, which uncovered serious violations such as hiring of illegal immigrants, poor labor conditions, and worker exploitation. Consequently, the Italian unit of Dior was placed under court administration for one year. The scandal sparked media scrutiny and public backlash, which threatened the integrity and exclusivity of the Dior brand. The case examines how unethical supply chain practices contradicted Dior’s ‘Made in Italy’ label, which has been traditionally associated with high-quality craftsmanship and ethical standards. Following the scandal, Dior distanced itself from the concerned subcontractors, developed several best practices in its supply chain, implemented stringent procedures for selecting and monitoring its suppliers, and supported initiatives aimed at assisting victims of labor exploitation. The case highlights the risks that luxury brands faced when outsourcing production and the consequences of weak supply chain controls. The case calls for discussion on legal accountability, brand reputation management, and the growing importance of ethical sourcing in the global fashion industry.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Understand the components of decent work.
• Examine the importance of transparency and ethical sourcing.
• Analyze the brand impact of an unethical supply chain.
• Generate criteria to ensure ethical supplier selection.
• Design methods to uphold human rights and ensure the ethical treatment of workers across all levels of the supply chain.

Keywords

Decent Work; Supply Chain Ethics; Labor Exploitation; Luxury Fashion Industry; Made in Italy Scandal; Subcontracting; Brand Management; Brand Reputation; Ethical Supplier Selection; Worker Rights Violations; Supply Chain Transparency; Legal Watchdog; Anti-competitive Practices; Ethical Sourcing,Christian Dior; International Labor Organization; Luxury Brand; Labor Rights; Workplace Safety; Sustainable Development Goals; Subcontracted Supply Chain; Unfair Competitive Advantage; Special Administration; Customer Perception