Dispute Resolution System for Sustainable Cooperation in Global Supply Chains: An ESG Strategy for Korean Companies

Purpose – Various disputes related to supply contracts occurr within the global supply chain. If these disputes are not resolved in a timely and effective manner, they may lead to the collapse of the entire supply chain. With the growing importance of ESG management, Korean companies have begun introducing dispute settlement committees within the supply chain. This study aims to improve these systems and propose alternatives to establish a unique ESG practice plan for Korean companies. Design/Methodology – This study examines the types and cases of contractual disputes within the global supply chain, and investigates how these disputes are currently resolved. Additionally, it explores the status of Korean companies in the introduction of dispute mediation committees as part of ESG management strategies. This study identifies problems within the system through interviews with companies and proposes new alternatives based on the discussions Findings – The study finds that resolving contract disputes within the supply chain is very challenging, and companies are suffering from this problem. While Korean manufacturers have introduced a unique dispute resolution system, it has proven to be largely ineffective. Therefore, the need for improvement measures and alternatives solutions has been recognized. Originality/value – The compulsory mediation system examined in this study is unique to Korea. However, the systems present an innovative approach to ESG management strategy, and if it can be improved and further developed, it holds the potential to realize a win-win situation within the global supply chain.