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Virtue Out of Necessity?: Compliance, Commitment and the Improvement of Labor Conditions in Global Supply Chains
Abstract
Private, voluntary compliance programs, promoted by global corporations and non-governmental organizations alike, have produced only modest and uneven improvements in working conditions and labor rights in most global supply chains. Through a detailed study of a major global apparel company and its suppliers, this paper argues that this compliance model rests upon misguided theoretical and empirical assumptions concerning the power of multinational corporations in global supply chains; the role information (derived from factory audits) plays in shaping the behavior of key actors (i.e., global brands, transnational activist networks, suppliers, purchasing agents, etc.) in these production networks; and the appropriate incentives required to change behavior and promote improvements in labor standards in these emergent centers of global production. We argue that it is precisely these faulty assumptions and the way they have come to shape various labor compliance initiatives throughout the world - even more than a lack of commitment, resources, or transparency by global brands and their suppliers to these programs - that explains why this compliance-focused model of private voluntary regulation has not succeeded. In contrast, this paper documents that a more commitment-oriented approach to improving labor standards co-exists, and in many of the same factories, complements the traditional compliance model. This commitment-oriented approach, based upon joint problem solving, information exchange, and the diffusion of best-practices, is often obscured by the debates over traditional compliance programs but it exists in myriad factories throughout the world and has led to sustained improvements in working conditions and labor rights at these workplaces.
... It primarily relies on private regulations to enforce suppliers' adherence to pre-established benchmarks and elevate standards of working conditions. This method is commonly referred to in the literature as the "compliance model" (Locke, Amengual & Mangla, 2009) or the "compliance paradigm" (Lund-Thomsen & Lindgreen, 2014) because of its reliance on monitoring and compliance. Research indicates that the transactional approach typically employs three interrelated mechanisms to improve working conditions within supply chains; namely, (1) inspection, (2) objectification, and (3) penalization. ...
... Further, penalization also occurs through financial means, which commonly involves actions such as canceling orders or reducing the volume of orders (Amengual et al., 2020;Jiang, 2009;Locke et al., 2009), that can have substantial financial repercussions for suppliers heavily reliant on these contracts. In theory, penalization is intended to act as a deterrent, motivating suppliers to adhere to compliance requirements. ...
... The relational approach to improving working conditions in GSCs is often positioned by researchers as an alternative to the transactional approach (Locke et al., 2009). While less common in practice, it tends to attract more scholarly support. ...
In global supply chains, subpar working conditions are a critical issue affecting organizations, workers, civil society, and policymakers alike. Our objective is to evaluate the approaches to improve working conditions within global supply chains and their implications. Through a comprehensive review that integrates insights from various social science disciplines, we offer a fresh perspective on this challenge. We begin by identifying factors at multiple levels—supply chain, workplace, individual, and institutional—that contribute to poor working conditions, and explore how these factors, in some configuration, contribute to poor working conditions in different sample archetypes of global supply chains. We then present the factors driving lead organizations to improve working conditions in their global supply chains. Next, we dissect the transactional and relational approaches commonly implemented by lead organizations, assessing their mechanisms and effectiveness. Our review indicates that these approaches have limited success. As an alternative, we synthesize diverse insights to introduce a systemic approach grounded in three pivotal mechanisms: cooperation, recognition, and evolution. This approach aims to tackle the multifaceted factors affecting working conditions. To advance the systemic approach, we propose critical research questions that pave the way for future studies.
... First, this work understands the creation of new innovative and regulatory capacities as processes of relevant public and private actors seeking ways to adapt transnational standards by recombining existing resources and by coordinating production and regulatory experiments. Research on labor and environmental standards as well as technological change reveals that firms and regulators upgrade their capabilities and adapt international standards effectively through "learning communities" composed of institutions that pool and diffuse collective knowledge resources and promote collaborative relationships (Amengual 2010;Locke et al 2009;McDermott 2007;Pietrobelli and Rabellotti 2011). ...
... These mechanisms are very present in the development of food safety standards and regulations that reach across national boundaries and in NAFTA in particular. NAFTA as an inducement for regulatory and firm upgrading in Mexico fits largely within the mainstream compliance model as characterized by Locke et al. (2009). Scholars and policymakers argued that Mexico's compliance with new trade, investment, labor, and environmental standards would help lock in ongoing neoliberal reforms and improvements in its political, economic, and social institutions (Cameron & Wise 2004, Duina 2007. ...
... First, the work on upgrading in GVCs argues that emerging market firms meet international standards through incremental experiments of adaptation with practical examples from the local context (Pietrobelli & Rabellotti 2011, Perez-Aleman 210). Similarly, the work on labor regulation stresses how labor standards tend to take hold through incremental joint problem-solving of root-causes between "inspectors as teachers," managers, and workers (Amengual 2010;Locke et al 2009;Locke & Samel 2018). The different public and private actors have complementary skills, knowledge, and resources to be recombined. ...
A key challenge for integrating new transnational regulations into a semi-periphery country is creating institutional capacities for effective dissemination and monitoring of the standards and for upgrading a broad base of firms to implement and benefit from them. Instilled by NAFTA, Mexico embraced transnational food value chains, yet the results were rather mixed, as the vast majority of producers cannot implement new standards and participate. New rules and practices are not adopted on a tabula rasa but layered on prior socio-political institutions that are raw materials for new collaboration and blockage. We argue that improvements in both regulatory institutions and firm capabilities are driven by the creation of public–private learning communities, which in turn are shaped by prior institutional legacies at the public–private divide. The ability of producers to undertake organizational experiments with one another and key public actors is greatly constrained by the legacies of corporatism. Refashioned producer associations could initiate with certain local public institutions regulatory and technological upgrading for a limited number of firms, which became gatekeepers for certification.
... While major catastrophes have grabbed the headlines (Al-Mahmood & Banjo, 2013), there has been a growing realization that many serious shortcomings go unreported and continue unabated. Although in many instances the establishment of business activities in developing countries has led to significant economic progress, it is becoming evident that the benefits of growing international business economic activity often leave many behind (Locke, 2013;Locke, Amengual, & Mangla, 2009;Lund-Thomsen & Lindgreen, 2014;Mayer & Gereffi, 2010;Posthuma & Nathan, 2010;de Oliveira, 2008b). ...
... As a result, many firms have begun to face significant pressure from supra-national entities (e.g., Organisation for Economic Co-operation and Development), non-governmental organizations (NGOs), investors, and consumers to improve working conditions and environmental standards, particularly among their suppliers' factories in developing countries. Tentative steps have been taken to establish and maintain certain standards; however, the evidence is mixed as to which measures have indeed produced social and environmental progress as intended (Locke et al., 2009;Locke, 2013;Lund-Thomsen & Lindgreen, 2014;Ruwanpura & Wrigley, 2011;Sinkovics, Hoque, & Sinkovics, 2016). ...
... Given accumulating evidence of vulnerable workers, child labor, and poor working conditions within many GVCs (Lund-Thomsen & Nadvi, 2010;Lund-Thomsen & Lindgreen, 2014;Lüthje, 2002;Locke, 2013;Locke et al., 2009;Mayer & Gereffi, 2010;Posthuma & Nathan, 2010;de Oliveira, 2008a), an emerging concern is that globalization encourages a "race to the bottom", especially as multinational corporations (MNCs) often include developing country suppliers to reduce production costs. According to the OECD (2016), the expansion of international business challenges conventional wisdom of how we look at economic globalization and, in particular, the public policies that have developed around it. ...
... The absence of an effective public model (e.g., government regulations and law enforcement) in the developing countries has driven clothing brands and retailers to relay on a private voluntary formal model (e.g., compliance and collaboration approaches) to manage suppliers' internal social issues Yawar and Seuring, 2017). However, this model has been recently criticised for falling short in addressing these issues (e.g., Alghababsheh and Gallear, 2021;Barrientos and Smith, 2007;Locke et al., 2009;Sancha et al., 2016). This may be due to the fact that this model was designed based on a fundamental assumption that suppliers' internal social issues are ☆ This research did not receive any specific grant from funding agencies in the public, commercial, or not-for-profit sectors. ...
... The contemporary global apparel supply chains are "buyer-driven" (Locke and Samel, 2018), which means that brands and retailers are central to establishing decentralised production networks, mainly in exporting developing countries (Gereffi, 1994). They do not own the factories but their dominant bargaining power in the global industrial apparel market stems from their extensive purchasing power, as attained from consolidation and the prevailing high marketing and brand position in the consumer market (Locke et al., 2009). In these circumstances, suppliers' business survival depends largely on brands and retailers (Lund-Thomsen and Lindgreen, 2014), leaving them without bargaining power (Kim et al., 2022). ...
... Power imbalance in and consolidations at the retail end of global apparel value chains have enabled brands and retailers to exert increasing influence over relatively small suppliers in order to gain advantage (Locke et al., 2009). To face uncertainties and increase responsiveness in a highly dynamic market, dominating brands and retailers pursue unfair purchasing practices with suppliers including changing order volumes and specifications subsequent to suppliers starting production (Anner, 2019;Locke et al., 2009). ...
The absence of an effective public model (e.g., government regulations and law enforcement) in developing countries has driven clothing brands and retailers to rely on a private voluntary formal model (e.g., compliance and collaboration approaches) to manage suppliers' internal social issues (e.g., poor working conditions). However, this model has been recently criticised for falling short in addressing these issues as it overlooks their main root causes. In this study, we suggest that suppliers' internal social issues can be driven by buyers' unfair practices, and therefore, we propose and examine that buyers' justice can ensure suppliers' internal social performance. We further postulate and investigate that addressing these issues would result in advantages for buyers beyond traditional performance outcomes in the form of reduced supply operational risk. Based on a census of the 117 suppliers comprising the ready-made garment industry in a Middle Eastern country (Jordan), we received survey responses from 97 suppliers and their shop floor workers. The analysis revealed that only buyer’s distributive and procedural justice, but not interactional justice, are positively related to suppliers' internal social performance. We also found evidence that improving suppliers' internal social performance can diminish supply operational risk. This study contributes to the extant research by empirically investigating a new approach to handle the increase in suppliers' internal social issues in a developing country context. It also does by capturing suppliers' internal social performance from the workers' perspective and highlighting the role of improved suppliers' internal social performance on mitigating supply operational risk.
... the working conditions of different factories collaborating with the same buyer to understand the underlying reasons behind compliance of certain suppliers and noncompliance of others (Locke et al., 2009;Locke & Romis, 2010). The longitudinal design involves measuring the evolution of labor conditions over time within the same supplier factories. ...
... First, the type of SCs' implementation programs established by companies, including monitoring and surveillance mechanisms of supplier labor conditions, affects SCs' effectiveness as those programs are often flawed, unable to promote better labor standards. Locke et al. (2009) observe that most companies adopt the "traditional compliance model," a model of supplier governance based on unilateral surveillance of labor standards using factory audits. It is generally characterized by asymmetric power relations between global buyers and their suppliers, where the buyer scrutinizes suppliers' action with the ultimate threat of cutting ties and shift to another supplier (Jiang, 2009b). ...
... It is demonstrated that audits can drive dishonesty, lack of openness, and even fraud, when suppliers feel forced to provide the "right" answer or face serious business implications (e.g., the threat of substitution; Jiang, 2009aJiang, , 2009b. With their study on Nike suppliers worldwide, Locke et al. (2009) show that the traditional compliance model is ineffective in practice: even though Nike conducted consistent monitoring of suppliers throughout the years and performed thorough audits, 80% of supplier factories failed to improve compliance over time, and some even experienced a decline in their compliance rating. In fact, unilateral monitoring regimes are argued to be designed not to protect labor rights or improve working conditions, but instead to limit the legal liability of global brands and satisfy institutional legitimacy demands (Bird et al., 2019). ...
Even though workplace conditions worldwide are subject to local and international laws, labor conditions in global supply chains have continuously raised human rights concerns. In response to societal pressure, multinationals have taken on a certain degree of responsibility regarding workplace conditions in supplier factories, notably by adopting codes of conduct. Investigating the impact of this self‐regulatory policy, scholars have examined whether and how codes shape labor conditions at the production level, but the results of their empirical studies diverge and sometimes contradict. To bring clarity to the field and gain an overarching understanding of the impact of codes, this literature review analyzes the question of their effectiveness as examined in 33 scientific papers gathered via a systematic selection of empirical studies. The review shows that supplier codes are not deemed unanimously and evenly effective by scholars and often fail to improve labor conditions. However, a range of factors are identified that facilitate the implementation of codes and ensure its effectiveness. This article develops a taxonomy of these factors and intends to contribute to understanding codes' decoupling and recoupling processes by investigating the gap between codes provisions and their intended outcome: the improvement of labor practices in global supply chains.
... In recent decades, CSR initiatives by global lead firms were promoted as an effective way to improve labor conditions in GVCs that were predominantly buyer-driven (Jenkins et al., 2002). Leveraging their purchasing power vis-à-vis suppliers, global buyers tried to enforce codes of conduct within their supply chains in the hope that by complying with the codes, suppliers would address social and environmental concerns in their factories (Locke et al., 2009;van Tulder, 2009). Despite some progress, it has become clear that the CSR compliance model alone is woefully inadequate to fully address labor issues in global supply chains (Locke, 2013;Lund-Thomsen and Lindgreen, 2014), let alone encompassing broader concerns about sustainable development. ...
... 2. CSR-driven path: Cluster firms can improve the treatment of their workers to comply with global buyers' social codes of conduct (Lund- Nadvi, 2010a, 2010b;Puppim de Oliveira, 2008a). This path is driven by global buyers' explicit commitment to CSR, and corresponds to what is called the 'compliance' paradigm (Locke et al., 2009). While leading global brands need to avoid reputational damage that might be caused by the public disclosure of labor wrongdoings in their supply chains, cluster firms linked to the chains have the incentive to comply with the buyers' codes of conduct if it ensures access to global markets and differentiates them from other suppliers. ...
... Diversity and multivocality are the key to the model (Dolan and Opondo, 2005). Second, it combines compliance-monitoring with capability-building so that clusters can learn how to address labor issues on their own (Locke et al., 2009). The key driver is a broad-based coalition of various types of global and local actors-global lead brands, international and local NGOs, trade unions, cluster firms and industry associations-that cooperate in standard-setting, monitoring and sanctions, as well as capability-building. ...
Introduction
Upgrading through global value chains (GVCs), or moving to higher value activities, has become important for economic development and job creation in the global economy, where competition remains intense and production has become fragmented and geographically dispersed (Cattaneo et al., 2013). Linking lead firms in GVCs with small and medium suppliers in diverse local contexts is a major business challenge in different types of industries, whether characterized by producer-driven chains like automobiles, electronics, or shipbuilding for whom finding and nurturing technically capable local suppliers is a requisite of global supply chain management for manufacturers who play a leading role in determining what and how to produce (Contreras et al., 2012; Sturgeon, 2003; Sturgeon et al., 2008), or in buyer-driven chains like apparel and footwear, where low cost is a major driver and retail buyers govern how the chains work (Bair and Gereffi 2001; Schmitz, 2004, 2006), or fresh produce and food products, where safety and quality standards are of utmost concern for supermarkets and their customers (Humphrey and Memedovic, 2006).
In order to maintain good supplier relationships in all of these settings, GVC lead firms have developed more active strategies of corporate social responsibility (CSR) (van Tulder, 2009). While CSR is a multifaceted notion, it generally refers to ‘the responsibility of enterprises for their impacts on society’ (European Commission, 2011). It encompasses a wide range of efforts through which firms seek to integrate social, environmental, ethical, and human rights as well as consumer concerns into their core business practices. The goal is to maximize the benefit of shared value for a broad set of stakeholders, including owners, shareholders, and the wider society, while reducing potential negative impacts of corporate business practices to a minimum.
There is a growing concern, however, that economic upgrading—countries and firms moving to higher value activities in GVCs with improved technology, knowledge, and skills (Gereffi, 2005: 161)—is no longer sufficient for sustainable CSR in global supply chains, given accumulating evidence and recent exposés about child labor, vulnerable workers, and abysmal working conditions in many export-oriented clusters located in developing countries (see Lund-Thomsen and Lindgreen, 2014; Lund-Thomsen and Nadvi, 2010a). Improving both economic and social conditions for workers and communities linked to GVCs is a vexing development problem, and it has attracted considerable attention by researchers, policy makers, and donor communities.
... Under cascading compliance, MNEs rely on supplier codes of conduct and audit-based monitoring systems to exert control (without ownership) over the activities of their immediate first-tier suppliers, while also dictating how first-tier suppliers engage with their own suppliers (Narula, 2019). MNEs have heavily relied on this approach to promote higher environmental, social and corporate governance (ESG) standards among its non-equity GVC partners, in line with the growing expectations of external stakeholders that MNEs should be held accountable for ESG abuses throughout their GVCs (Locke et al., 2009). ...
... MNEs generally rely on a combination of two control tools to promote cascading compliance: a supplier code of conduct and an audit-based monitoring system (Locke et al., 2009). A supplier code of conduct is a legal document that describes a list of ESG standards to which tier-1 suppliers need to adhere and explains the penalty for non-compliance. ...
... As a second tool, MNEs adopt audit-based monitoring strategies to impose topdown pressures on suppliers to comply to the supplier code of conduct in their daily working routines (Locke et al., 2009). These can take on several forms. ...
Strategies that make quasi-internalization feasible such as cascading compliance provide a means for lead firms to control the social and environmental conditions among their suppliers and sub-suppliers in ways other than through equity ownership. We take an internalization theory lens to reflect on the effectiveness of cascading compliance as a governance mechanism to promote sustainability along global value chains. While cascading compliance provides significant economic benefits to the lead firm, there are disincentives for suppliers to invest the required resources to meet the sustainability conditions, leading to periodic social and environmental violations. Enhanced cascading compliance (‘cascading compliance plus’) that adds trust-inducing mechanisms to engage suppliers in joint problem-solving and information-sharing has the promise to improve sustainability. But the added transaction costs that this generates has the potential to crowd-out suppliers, and possibly even make full internalization attractive again.
... The information provided by audits can also be biased and incomplete, despite being presented as a rigorous additional layer of due diligence for higher risk suppliers (Locke et al., 2009). Workplace conditions in the fresh produce industry change very quickly to meet the demands of the just-in-time supply chain. ...
... The shortcomings of the due diligence approach favoured by supermarkets are thus abundant and mutually-reinforcing. Yet even if second-tier suppliers answered their SAQs honestly, audits were accurate and comprehensive, and first-tier suppliers had more staff and resources to identify violations and follow-up with their suppliers, would labour standards improve? Locke et al. (2009) argue that compliance-focused due diligence will only ever deliver limited and uneven improvements because this approach is underpinned by faulty assumptions regarding how global supply chains work. In particular, there is a perception that supermarkets, if only willing, can use their purchasing power as the lead firms dominating food supply chains to force suppliers to improve labour conditions. ...
... In particular, there is a perception that supermarkets, if only willing, can use their purchasing power as the lead firms dominating food supply chains to force suppliers to improve labour conditions. Yet this is overly simplistic as the idea of buyer-driven governance bringing unruly suppliers under control fails to recognise that power in supply chains is neither static nor unidirectional and that there is greater nuance to the relationships between actors which vary throughout the sourcing calendar and, fundamentally, are shaped by the structural dynamics of the supply chain (Gereffi, 1994;Locke et al., 2009). In fact, it is not the purchasing power itself, but the business terms set using this purchasing power which ultimately create the conditions for labour exploitation to thrive and due diligence to fail. ...
... Global firms may practise symbolic adoption (white washing) and not seriously implement their CoCs. Global firms may lack the leverage to compel supplier performance (Locke et al., 2009), or may lack accurate information regarding supplier behaviour due to problems with auditing (Kuruvilla et al., 2020). Alternatively, lead firms themselves often undermine their compliance efforts by aggressive purchasing practices (Anner, 2018;Locke & Samel, 2018). ...
... Prior research has focused on the reasons for lead firm policy-supplier practice decoupling as reflected in poor compliance. For example, research suggests that global buyers may not have the leverage to impose codes on their suppliers (Locke et al., 2009;Soundararajan & Brown, 2016), given that suppliers typically 'hedge their bets' and only allocate a small percentage of their production to each global buyer. Further, several measurement problems may prevent lead firms from obtaining accurate and transparent information about working conditions among supplier factories to enforce compliance (Lebaron & Lister, 2015;Locke et al., 2009), given a variety of problems with auditing and falsification of records (Kuruvilla, 2021). ...
... For example, research suggests that global buyers may not have the leverage to impose codes on their suppliers (Locke et al., 2009;Soundararajan & Brown, 2016), given that suppliers typically 'hedge their bets' and only allocate a small percentage of their production to each global buyer. Further, several measurement problems may prevent lead firms from obtaining accurate and transparent information about working conditions among supplier factories to enforce compliance (Lebaron & Lister, 2015;Locke et al., 2009), given a variety of problems with auditing and falsification of records (Kuruvilla, 2021). And codes and programme multiplicity create a level of opacity that makes it difficult for suppliers to conform to different standards in codes of their numerous clients (Kuruvilla et al., 2020). ...
Research on private regulation of labour issues in global supply chains has focused extensively on whether supplier factories comply with the codes of conduct of global companies. Less is known about how such compliance relates to the preferences and behaviours of workers at export factories. This study analyses a unique dataset of factory audits matched with a survey of worker turnover rates from 622 factories in 28 countries supplying a large global apparel retailer. The results show that violations of the retailer's codes of conduct for suppliers are generally related to turnover, but that workers ‘vote with their feet’ primarily for violations of wages and benefits, relative to violations of other code provisions such as environment protection and safety standards. This ‘means‐ends’ decoupling between factory practices and worker preferences implies that global firms need to incorporate the livelihood logic that underlies workers' turnover decisions while implementing their private regulation programmes.
... In recent decades, recurrent corruption scandals have triggered demands for greater accountability and transparency in the governance of corruption. Western governance actors have responded to this demand by focusing primarily on strict compliance to remedy the decoupling of policies and practices in the fight against corruption (anticorruption) (Locke et al. 2009, Gibson Dunn 2011, typically calling for a zero-tolerance enforcement approach to any deviation from or violation of regulations (Paine 1994, Greive andHartmann 2012). Such strict compliance principles are based on highly formalized templates of appropriate behavior, however, which often clash 1 in practice with the heterogeneous expectations, beliefs, motives, and behaviors of actors in different institutional contexts. ...
... Compliance, Achievement, and Decoupling in the Governance of Corruption Given the limitations of applying compliance-based approaches to governance in heterogeneous organizational environments (Paine 1994, Aguilera et al. 2008, Locke et al. 2009), it can reasonably be asked why this closed-system approach continues to prevail in much sensemaking of the GoC. In part this persistence stems from the enduring influence of Meyer and Rowan's (1977) theorization of policy-practice decoupling as a widespread problem in governance whereby organizations only symbolically adopt policies without implementing them substantively. ...
... The longstanding prevalence of this formal rule-based approach to governance in the West means that any deviations from what has been planned, regulated or contracted are not considered acceptable, even including pragmatic and expeditious modifications of such regulations. This explains in part why compliance models are still widely used in Western corporate governance approaches despite their evident limitations (Paine 1994, Locke et al. 2009). ...
The governance of corruption is increasingly important in a global business environment involving ever more frequent transactions across diverse institutional contexts. Previous scholarship has theorized a fundamental tension between the enforcement of organizational compliance and the achievement of social ends, finding that efforts to remedy policy-practice decoupling in the governance of corruption and other complex global issues can exacerbate means-ends decoupling. However, these studies have tended to apply a rather static lens to a highly evaluative and processual phenomenon, meaning we still lack in-depth understanding of the dynamics underlying the interactive communicative processes of sensemaking and negotiation involved in working out the problems of both means-ends and policy-practice decoupling across different institutional contexts. To address this gap, we present a longitudinal qualitative study of the governance of corruption that identifies the emergence of locally contingent and open-ended sensemaking processes arising from and surrounding problems of decoupling. Specifically, we identify four key sensemaking mechanisms across different contexts and periods that ultimately shifted the focus of the actors away from a compliance-based approach toward a new shared understanding of progress as achievement, i.e., the mechanisms of localized theorizing, leveling, recalibrating, and public criticizing. Based on these findings, we develop a model to explain the role of sensemaking in the governance of corruption and the dynamics of decoupling.
Funding: This work was supported by Schweizerischer Nationalfonds zur Förderung der Wissenschaftlichen Forschung [Grants 100018_137789 and 100018_159485].
... The current literature focuses on three groups of actors whose actions (can) interact with each other: Transnational Corporations (TNC), which organise GSCs; those states in which the production is located; and those states that can influence the conditions in GSCs due to their power as 'mega-consumers' (Delautre, 2019: 32-41;Locke et al., 2009Locke et al., , 2013Martin-Ortega et al., 2015). As a result of public pressure, especially when products have become visible to sensitive consumer groups, TNCs, sometimes together with NGOs, have introduced private regulations and codes of conduct (Distelhorst et al., 2015;Locke et al., 2013;Toffel et al., 2015;Zyglidopoulos et al., 2012). ...
... Upholding working conditions is subject to regulations of at least three regulatory authorities, first the TNC controlling the contractual relations with suppliers and applying a code of conduct, second, the state (and its labour regulation) in which the production of the goods and services takes place, and third the 'buying' state, which stipulates rules for public procurement. While much of the research on labour rights in GSCs focuses on corporate responsibility and the implementation of corporate codes of conduct and its interaction with the public regulation in the producing states as well as with prominent buyer's networks (Delautre, 2019: 40-41;Distelhorst et al., 2017;Locke, 2013: 17-20, 169-172;Locke et al., 2009Locke et al., , 2013Martin-Ortega et al., 2015;Toffel et al., 2015), we address the styles of enforcement of the buying state. ...
... Overall, our interviewees confirm the difficulties that have already been identified by the general regulation literature (Baldwin et al., 2012) and the research on the implementation gap in protecting workers' right in GSCs (Locke, 2013;Locke et al., 2009) (2017), we now turn to public procurement and contribute to the discussion with an analysis of actual administrative action to show that the typology introduced by Locke et al. (2009) is also applicable to public procurement. We exemplify the two types of enforcement strategies that are relevant in public procurement. ...
Violations of fundamental labour rights have been a problem in global supply chains for decades. Recently, public procurement is increasingly used to regulate labour standards in global chains. Based on previous research on private actors, which distinguished between compliance-focused and commitment-focused enforcement strategies, this article discusses the problems and means of enforcing respect for labour rights in global supply chains. By applying this distinction to public procurement, this article develops a concept of enforcement styles for public procurement as a tool to regulate labour in global supply chains.
... Based on the literature (e.g., Alexander, 2020;Jiang, 2009;Lund-Thomsen & Lindgreen, 2014), we identify two governance strategies for social sustainability in value chains characterized by large power asymmetries between international buyers and suppliers (Gereffi et al., 2005): first, lead firms can adopt an audit-based governance strategy, which imposes unilateral top-down pressures on suppliers to implement social sustainability policies in their daily working routines through regular factory audits (see also Locke et al., 2009;Lund-Thomsen & Lindgreen, 2014). Although the effectiveness of audits for suppliers' implementation of social sustainability policies has been disputed (e.g., Jiang, 2009;Locke et al., 2009;Vogel, 2010), audits remain the most widespread way of governing suppliers' social sustainability in GVCs due to their relative cost-efficiency and ease of scaling-up (Christmann & Taylor, 2006;Jamali et al., 2015). ...
... Based on the literature (e.g., Alexander, 2020;Jiang, 2009;Lund-Thomsen & Lindgreen, 2014), we identify two governance strategies for social sustainability in value chains characterized by large power asymmetries between international buyers and suppliers (Gereffi et al., 2005): first, lead firms can adopt an audit-based governance strategy, which imposes unilateral top-down pressures on suppliers to implement social sustainability policies in their daily working routines through regular factory audits (see also Locke et al., 2009;Lund-Thomsen & Lindgreen, 2014). Although the effectiveness of audits for suppliers' implementation of social sustainability policies has been disputed (e.g., Jiang, 2009;Locke et al., 2009;Vogel, 2010), audits remain the most widespread way of governing suppliers' social sustainability in GVCs due to their relative cost-efficiency and ease of scaling-up (Christmann & Taylor, 2006;Jamali et al., 2015). Especially when emerging country suppliers are subjected to multiple audits per year from their various customers (Toffel et al., 2015), it is less worthwhile for them to engage in cosmetic changes to satisfy one-time audits. ...
... Following previous studies (e.g., Locke et al., 2009;Lund-Thomsen & Lindgreen, 2014), we label international buyers' monitoring over suppliers' social sustainability policies (e.g., codes of conduct, standards, etc.) as the degree of audit-based GVC governance for social sustainability. ...
The disaggregation and geographic dispersion of global value chains (GVCs) have expanded the responsibility of international buyers from firm-level corporate social responsibility (CSR) towards social sustainability of their emerging country suppliers. We theorize, in this paper, that the effectiveness of lead firms’ GVC governance strategies for social sustainability—which can be audit-based or cooperation-based—depends on the local institutional context of the supplier. Supplier country institutions exert legal and civil society pressures for social sustainability, which shape suppliers’ attitude and receptiveness towards lead firm requests. Using unique primary data from 356 garment and footwear suppliers in 11 emerging countries, which supply to Western European or North American buyers, we show that GVC governance strategies are particularly effective for suppliers’ social sustainability implementation when there is ‘contextual fit’ with local institutional pressures for social sustainability in the supplier country. Our study identifies the boundary conditions of GVC governance modes, and demonstrates a complementary relationship between organizational arrangements and their institutional-level counterparts in the context of social sustainability.
... MNEs monitor suppliers against the code of conduct, with the suppliers themselves argued to be facing economic incentives to comply since they could otherwise lose orders from MNEs. However, this compliance model (Locke et al., 2009) has faced challenges. Questions have been raised about the effectiveness and credibility of MNEs' monitoring of their suppliers (O'Rourke, 2003). ...
... However, it has been possible to overcome some of these limitations of private regulation by focusing on assistance, capacity building and long-term relationships; what Locke et al. (2009) call the commitment model . Their study found that compliance inspectors actively helped supplier factories achieve compliance through technical assistance and by suggesting low-cost solutions to labour standards problems that factory owners were actually able to implement; in some cases having observed these solutions at other factories they inspected. ...
Decent work, part of Sustainable Development Goal (SDG) 8, remains a daunting challenge for international business (IB). This chapter takes an IB perspective on the role of labour standards provisions (often referred to as “social clauses”) in international trade policy. Such provisions aim to improve labour standards in trading partners through trade policy mechanisms. The chapter provides a brief overview of labour standards and discusses the so far failed attempts to include labour standards provisions in multilateral frameworks such as the World Trade Organization (WTO). It describes the ensuing trend of instead including such standards in regional and bilateral free trade agreements. Some theory and evidence from research literature on labour provisions is presented. The chapter concludes by outlining some promising research avenues for IB related to labour provisions in trade policy.
... Finally, we contribute to research on sustainable practice adoption by illuminating the role of local NGOs in the vertical extension of sustainable practices from MNEs to local supply-chain partners. Scholars have emphasized the information asymmetries MNEs face when pushing sustainability concerns upstream (Aragon-Correa et al., 2020;Bondy et al., 2008;Locke, Amengual, & Mangla, 2009;Villena, Wilhelm, & Xiao, 2021). However, given that existing supply-chain governance systems provide limited support for MNEs to effectively monitor their local suppliers (Kim & Davis, 2016;Villena & Gioia, 2018), current research does not address how sustainable practices can be diffused effectively (Kolk, 2016;Narula, 2019;Wettstein et al., 2019). ...
... Sustainability in global supply chains has recently received increasing attention (Benito, Cuervo-Cazurra, Mudambi, Pedersen, & Tallman, 2022). Studies have shown that the effectiveness of voluntary standards for governing environmental issues is limited (Aragon-Correa et al., 2020;Locke et al., 2009;Mayer & Gereffi, 2010). Existing governance systems fail to sufficiently reduce information asymmetries between MNEs and local supply-chain partners. ...
This paper presents new theory and evidence on how cross-border, cross-sector collaborations affect the global diffusion of sustainable practices. By highlighting the structural characteristics of global supply chains, we study how non-governmental organizations (NGOs) constrained by autocratic political regimes exploit the collaborative opportunities presented by foreign multinational enterprises (MNEs) to enhance local firms’ sustainability performance. Drawing on social movement and resource dependence theories, we propose that global supply chains that tie MNEs to their local partners offer these NGOs a favorable opportunity structure to gain leverage over local firms by establishing MNE–NGO collaborations. This two-step form of leverage helps NGOs increase their influence and legitimacy to facilitate the adoption of sustainable practices by local firms within the MNEs’ global supply-chain networks. Yet, this mediated stakeholder effect decreases when governmentally produced structural conditions reduce the synergistic potential of this opportunity structure: greater priority given to environmental protection by governments substitutes for MNE–NGO collaborations. To test our theory, we examine the relationship between Chinese NGOs’ collaborations with 167 MNEs across 24 countries and these MNEs’ local green supply-chain ratings in the period 2014–2020. This study contributes to the literature on social movements, MNE–NGO collaborations, and sustainability in global supply chains.
... The production of a particular product by a company usually includes several component parts and services from other companies in the upstream supply chain. With increased globalization and technological breakthroughs, outsourcing to suppliers, especially those in locations previously considered too remote, has become an increasingly popular costeffective strategy among companies to obtain component parts or services or to manufacture complete products (Locke et al., 2009;Smith and Barrientos, 2005). However, increased reliance on other parties in the supply chain comes with increased responsibility and risk for companies, often raising the costs of outsourcing (Stentoft et al., 2016). ...
... Mounting empirical research has pointed out that the use of assessment practices (i.e. auditing, codes of conduct, monitoring and certification), in particular by buyers to improve suppliers' social performance, is frequently ineffective (Locke et al., 2009;Lund-Thomsen, 2008;Jiang, 2009;Sancha et al., 2016;Yu, 2008). The implementation of a code of conduct and threating non-compliant suppliers is not only ineffective at curbing low-wage payment and promoting workers' right to freedom of association and collective bargaining, but has increased the scale of social violation actions by suppliers seeking to stay competitive in the marketplace where quality, price, and delivery are the main criteria buyers use to grant contracts and orders (Lim and Phillips, 2008;Yu, 2008). ...
Purpose
The concept of sustainable supply chain management (SSCM) integrates the environmental and social sustainability dimensions into the management of supply chains. However, the understanding of the management of social sustainability in the supply chain is relatively underdeveloped. This paper, therefore, seeks to explore the adoption, emerging approaches and the (un)intended outcomes of social sustainability in the supply chain as well as supply chain social sustainability in the Arab world.
Design/methodology/approach
This paper systematically reviews 396 peer-reviewed papers on social sustainability in the supply chain published between 1997 and 2020.
Findings
The review identifies and discusses three types of factors influencing the adoption of social sustainability in the supply chain: drivers, enablers and barriers. The review also identifies four main approaches to tackling social issues in the supply chain, namely an internal approach (e.g. internal adaptation), a hands-off approach (e.g. supplier switching), a hands-on approach (e.g. collaboration practices) and a relational approach (e.g. justice). The review also reveals that although addressing these issues can generate positive outcomes, it can also lead to unintended negative outcomes such as increased social violations and the perception of unfairness among suppliers.
Originality/value
This study complements the existing literature reviews on the social dimension of SSCM by not only providing an update of the current literature and shedding light on an emerging approaches (e.g. justice) to tackling social issues in supply chains but also by exposing the unintended negative consequences of tackling social issues, a subject that has largely been overlooked to date.
... A korai irodalom szerint a gazdasági feljebb lépés az exportteljesítmény növekedésével és társadalmi feljebb lépéssel jár, miközben a társadalmi feljebb lépés (a magasabb bérek vagy munkaügyi normák értelmében) jellemzően a termelési költségek növekedését eredményezi, tehát drágábbá teszi magát a termelést (Milberg and Winkler, 2011). Az empirikus vizsgálatok arra az eredményre jutottak, hogy a társadalmi feljebb lépés szabályozással és ellenőrzéssel érhető el, ami alapjaiban megkérdőjelezi a gazdasági feljebb lépést vagy a gazdasági növekedést, mint ennek előfeltételét (Locke et al., 2008). Továbbá azt is bebizonyosodott, hogy -a kezdeti előfeltételezésekkel és vizsgálatokkal szemben -a munkavállalók jogai és foglalkoztatásuk minősége nem természetes velejárója a GVC-kben való részvételnek (Barrientos, 2013;Barrientos et al., 2011). ...
A nemzetközi termelés és kereskedelem szerveződé-sét vizsgáló globális értékláncok-kutatásokban hangsú-lyosan csak a 2010-es évektől jelentek meg a fenntartha-tóság dimenziói, így a környezeti és társadalmi aspektus. A leginkább a munkavállalók helyzetét, körülményeit leíró, dinamikusan változó, komplex társadalmi feljebb lépés koncepciót a magyarországi ruházati iparban dolgozók kontextusában vizsgáltam, korábban készített, szakértői interjúk segítségével, hogy választ kapjak arra a kérdésre: vajon javult, vagy romlott a munkavállalók helyzete, tehát társadalmi feljebb, vagy visszalépésnek lehetünk szemtanúi? Továbbá adatbázisokkal egészítettem ki ezt a módszertant, hogy árnyaljam a társadalmi feljebb lépés szakértői vizsgálatát, és a koncepció operacionalizálását.
... These tier 1 suppliers are, in turn, expected to exert similar control over their tier 2 suppliers, and so on (Wilhelm et al., 2016). Lead buyers typically rely on two interrelated tools to develop cascading compliance: supplier codes of conduct and audit-based monitoring (Locke et al., 2009). Supplier codes of conduct stipulate rules for the behavior of suppliers in the environmental, social, and governance domains that are subsequently monitored through regular factory audits. ...
... Prominent examples of such systems are ISO 14001, which targets environmental management, and SA8000, which emphasizes social accountability (Bush et al. 2014). To ensure its implementation, these suppliers undergo audits-conducted either internally, by the buyer, or by an independent third party-to ascertain their adherence to the code (Locke et al. 2009). The supplier-driven CSR in GVCs often connects to industrial clusters in low-and middle-income countries, where smalland medium-sized enterprises (SMEs) benefit from shared resources. ...
The global value chain (GVC) framework may provide a systematic approach to depict and advance sustainable path options at the global, national, and local scales. However, a coherent picture of the fragmented body of knowledge on the sustainability implications of GVCs is lacking. In an attempt to delineate the most effective perspective for addressing sustainability challenges within GVCs, this review explores the main academic streams that have emerged in response to the pressing need for detailed insights into GVCs. These academic streams include sociological, economic, and management approaches. We examine the intersections and distinctions among them, evaluating whether they converge or diverge in addressing sustainability within GVCs. By discussing the limitations and potential of these approaches, we suggest a possible integrated and appropriate research agenda to achieve an encompassing and still operative perspective to address current sustainability challenges.
... Alternatively, coordination involves monitoring for compliance, as MNEs must ensure that GVC partners conform to acceptable or desired levels of sustainability improvements. However, coordinating compliance through direct monitoring is expensive, often ineffective, or sometimes impossible due to the vast number of suppliers, wide geographic scope, and cultural differences (Kim & Davis, 2016;Locke, Amengual & Mangla, 2009). Cascading compliance has been proposed to ensure more effective monitoring and involves MNEs creating codes of conduct for their tier-one suppliers (suppliers they have a commercial contractual relationship with) while also dictating how those tier-one suppliers interact with their suppliers (Van Assche & Narula, 2022). ...
Digital sustainability has the potential to transform how multinational enterprises (MNEs) capture, create, and distribute value in their global value chains (GVCs). Yet, a real problem persists in understanding how MNEs drive digital sustainability across their GVCs. This is a complex and evolving process that requires MNEs to coordinate with and collaborate across a multiplicity of globally dispersed partners. Adopting an orchestration perspective, our paper constructs a novel take on digital sustainability in several ways. First, we reimagine the role of MNEs as “chief orchestrators” in GVCs, driving digital sustainability through orchestration activities underpinning coordination and collaboration, which in turn generates opportunities for value capture and creation along the GVC. Second, we disentangle the impact of MNE-driven digital sustainability, unpacking the undesired consequences for GVC partners relating to dependency, power dynamics, transparency, and supplier squeeze or exclusion. Our insights temper claims about the transformative potential of digital sustainability, challenging scholars, practitioners, and policymakers to reflect on and respond to the double-edged effects of MNE-driven digital sustainability in GVCs. Our arguments are demonstrated through three illustrative cases from firms across industries (agriculture, energy, and fast-moving consumer goods). We identify implications for management practice and policy and offer guideposts for future research.
... Within this vast literature, we focus specifically on two perspectives, which we believe are most relevant for the context of MNCs and sustainability in global supply chains -IB and SCM. Other fields have also examined sustainability-related issues in global supply chains including, for example, business ethics (e.g., Egels-Zandén, 2017), corporate governance (e.g., Bondy, 2008), labor and employment relations (e.g., Lakhani et al., 2013), political science (e.g., Locke et al., 2009), and economic geography (e.g., Nadvi, 2008). Nonetheless, we believe that our focus on IB and SCM is appropriate because these two research domains emphasize, more than others, the pivotal role that MNCs play in shaping the diffusion of corporate sustainability in global supply chains, while also dissecting the multifaceted supply chain challenges inherent in implementing these practices. ...
Multinational corporations and their global suppliers are increasingly expected to employ sustainability practices throughout their supply chains. As such, the global scope of corporate sustainability – including the notion of ‘full-chain responsibility’ – is a concern for firms, governments, NGOs, and other stakeholders. We evaluate the state-of-the-art of sustainability research on multinational firms and global supply chains, bringing together insights from two literatures that have examined this topic: international business and supply chain management. The articles in the Special Issue advance the research frontier by highlighting both macro impacts of legal and societal pressures as well as micro-processes of bargaining power, managerial sensemaking, and transparency to inform the relationships between global firms and their suppliers. Collectively, the research included in this Special Issue reflects a notable shift in focus from the former (macro) to the latter (micro). We elaborate on the benefits of incorporating additional notions such as power, opportunism, and negotiation in global supply chain research against the background of cross-country variation in legal and societal pressures. This would allow a more in-depth understanding of the dynamic relationships between multinational corporations, their multi-tier supplier networks, and other stakeholders that jointly shape the sustainability agenda.
... The ILO estimates that approximately 450 million workers were involved in global supply chains as of 2013. 2 Given the importance of supply chains for economics, state politics, companies, and working conditions, their impact on human rights seems evident. A vital body of research addresses how human rights regulation can (or cannot) affect supply chain dynamics, and vice versa (Arnold and Bowie, 2007;Locke et al. 2009;Pagnattaro 2014;Clarke and Boersma, 2017). This concerns labor rights in particular (Fenwick and Novitz, 2010;Mantouvalou, 2012;Saner and Yiu, 2020). ...
available open access: https://www.elgaronline.com/edcollchap-oa/book/9781803924922/book-part-9781803924922-10.xml
Abstract
The prevalence of supply chains has increased tremendously, accompanied by the promise to contribute to economic prosperity. At the same time, doubts over their positive effects have risen, juxtaposing that promise with harsh reality. One of these harsh realities concerns the role of supply chains for human rights. Even though this role manifests in various forms, the regulation of supply chains from a human rights perspective remains ambiguous. Against this background, this chapter explores the relation between the global regulation of supply chains and human rights, and investigates the reasons for its ambiguity by analyzing current discussions in the issue area of business and human rights: the United Nations (UN) treaty process. This process partly interconnects supply chain regulation with human rights, yet reveals the cracks in their relationship. These appear particularly within three regulatory dimensions, namely capturing business power, the bindingness of regulation and the policy level of regulation. Better understanding this linked but fractured relationship builds a basis for further developing the regulation of supply chains from a human rights perspective.
... 2 We aspire to redouble JIBP's efforts to engage with scholars from cognate fields. To name just a few related disciplines with which stronger collaboration can be fruitful, we want to engage with global value chain and international development scholars who, among other things, have developed a deep interest and expertise in understanding the motives, possibilities, and limitations of multinational enterprises to address labor and environmental violations in their supply chains (e.g., Locke et al., 2009;Ponte, 2019) as well as the complex interplay between private and public governance in driving upgrading in a polycentric trade context (e.g., Nadvi, 2008). We seek links with trade economists and economic geographers to better analyze the relation between international business policy and the spatial distribution of activities, including on topics such as regional and global inequality (e.g., Iammarino et al., 2019;Milanovic, 2016) and decarbonization (e.g., Coe & Gibson, 2023;Grubb et al., 2022). ...
... These benefits correlate positively with the divergence between buyers' policies and suppliers' practices because the effort the suppliers must expend to overcome the gap rises as divergence increases. By contrast a supplier that is relatively less dependent on the focal relationship may be able to find an alternative buyer with less stringent rules and codes of conduct (Locke, Amengual, & Mangla, 2009). Thus, from the outset, dependent suppliers may on the surface accept onshore and global stakeholders' expectations and the buyer's policies without fully comprehending them or being able to act upon them. ...
We theorize on how institutional distance and interorganizational relationship (IOR) governance interact to produce corporate social irresponsibility (CSiR) in offshore outsourcing. Managers generally find it challenging to align practices with stakeholders’ responsibility expectations and more so when activities occur offshore and outside organizational boundaries. This is evident from Apple’s repeated problems in China but insufficiently understood in international business (IB) literature. Institutional distance increases the likelihood and severity of CSiR because it produces a gap in buyers’ and suppliers’ stakeholder expectations and leads to divergence between suppliers’ practices and buyers’ responsibility policies. Trust-based cooperative IORs reduce CSiR and lessen the effect of institutional distance on CSiR. Supplier dependence also reduces CSiR but increases the effect of institutional distance on CSiR and is therefore a double-edged sword. Our novel framework generates insights into CSiR, a dark side of IB, by uncovering the mechanisms that co-produce CSiR in the offshore outsourcing context. We enrich work on offshore outsourcing by suggesting that CSiR represents a hidden cost and advance multilevel theorizing in IB by showing how institutional distance interacts with IOR governance. Managers should consider the tradeoff between performance and CSiR in offshore outsourcing and the downside that comes from (over)exploiting supplier dependence.
... This new approach had created an opportunity for buyers to increase their supremacy over suppliers. Historically, multinational companies have maintained their power over their suppliers by setting rigorous constraints primarily on pricing, quality, and delivery schedules (Locke et al. 2009). 26 Suppliers under Accord and Alliance recognize that there is no way to escape from safety compliances, although raised concerns about the inspection mode (Rahman and Rahman 2020). ...
... Recently, Castaldi et al. (2022) widened the context of analysis by investigating the transfer of socially sustainable practices along the extended value chain and proposed two governance strategies that can come into play. On the one hand, MNEs can implement an audit-based governance strategy, by imposing unilateral top-down pressures on suppliers to implement social sustainability policies in their daily working routines (Locke et al., 2009;Lund-Thomsen & Lindgreen, 2014). On the other hand, MNEs can implement a more developmental, capacity-building form of governance (Alexander, 2020;Lund-Thomsen & Lindgreen, 2018) that seeks to 'change suppliers' day-to-day managerial practices in ways that may also support improved social performance' (Distelhorst et al., 2017, p. 710), for example, MNE's active provision of training. ...
In recent years, both academics and institutions have acknowledged the crucial role multinational enterprises (MNEs) can play in addressing the sustainability challenges, as formalized by the sustainable development goals (SDGs). Nevertheless, because of their extensiveness and their design as country-level targets, SDGs have proven challenging to operationalize at a firm level. This problem opens new and relevant avenues for research in international business (IB). This chapter attempts to frame the topic of extended value chain sustainability in the IB literature. In particular, it addresses a specific topic, that is, how sustainability and resilience-building practices interact in global value chains (GVCs). To do so, the present study develops the case of STMicroelectronics (ST), one of the biggest semiconductor companies worldwide.
... The use of the platform may also decrease the intensity and frequency of more traditional relationships between buyers and supplier factories. Previous research has shown that traditional relationships with focus on commitment between buyers and suppliers can significantly improve practices at supplier factories (Locke et al., 2009), however it is unclear how the existence of such platforms impacts the improvement of working conditions in global supply chains. ...
Overcoming constrained resources and enabling social, environmental, and economic value creation for stakeholders remains a managerial challenge. Small enterprises in the bottom of the pyramid (BoP) context offer an opportunity to extract insights into orchestration of resources amidst such challenges. Extensive qualitative data collected via text analysis, field visits, and expert interviews with two social intermediaries and managers of eleven small enterprises operating in BoP markets were analyzed to understand how small enterprises engage with stakeholders to structure, bundle, and leverage resources, as well as how they address environmental contingencies and social challenges in poverty settings. The findings highlight that companies must move beyond an economic resource focus and engage a diverse stakeholder network, leveraging social intermediaries for resource orchestration throughout lifecycle stages. The emergent framework elaborates on Resource Orchestration Theory (ROT), with propositions related to resource management mechanisms, capabilities offered by social intermediaries, and contingencies for social value creation.
... Where the ILO facilitates the repurposing of its conventions as "technical standards" (Tsogas, 2020, p.148), such as in the RPA, the question is whether this novel experimentation develops and extends social protection rights for workers, or erodes labor standards by privatizing rights that were designed to be part of national employment laws (Standing, 2008, p.356). In other words, do novel regulatory experiments complement or displace enforceable regulation (Bartley, 2005;Locke et al., 2009)? ...
After the 2013 collapse of Bangladesh’s Rana Plaza garment manufacturing building, the Rana Plaza Arrangement (RPA) provided work-injury compensation benefits to injured survivors and the families of those killed, funded by global apparel brands. This article draws upon qualitative interviews with international stakeholders—including global brands, activists, and the International Labour Organization (ILO)—who developed and implemented the RPA, and survivors who claimed compensation payments. We analyze the RPA as an experiment in transnational social protection, which attempted to recenter labor rights and state responsibility after three decades of neoliberal labor governance. Arguing that social protection can be a technocratic “fix” to restore and make tolerable an injurious economic system, we demonstrate the inherent paradox of attempting to integrate precarious labor into decent and dignified social protection. The RPA’s many failures suggest that state commitment to regulation and organized labor power are necessary ingredients for successful transnational social protection.
... Scholars have been questioning which methods work best for achieving higher sustainability-related performance in SSCM (Lund- Thomsen and Lindgreen, 2014). The traditional compliance model is a top-down model, and previous research points out that it has been successful in some fields such as health and safety but inadequate in areas such as freedom of association and working hours (Locke et al., 2009). Unlike the compliance-based approach, the collaboration-based approach is still in its infancy and is still being defined in literature. ...
... Second, global regulation of the value chain approach means that the organization engages in global and sectoral voluntary agreements and initiatives to better regulate its value chain (Partiti, 2022;Locke et al., 2009). Third, organizations need to design and implement policies that recognize local differences and yet act on global principles across the value chain (Bos et al., 2017). ...
The current coronavirus crisis demonstrated the need for transnational coordination to combat the pandemic. The crisis may be viewed as an opportunity to reconfigure our global economy for a better future that fosters equality and opportunity beyond national regulation and throughout the global value chains (GVCs). Taking the preservation of the common good as our philosophical approach, the paper moves the diversity management theory with the introduction of the GVC perspective as both a method of analysis and a theoretical lens from which to regulate the management of diversity in global organizations. The paper explicates the utility of moving from diversity management driven by shareholder and stakeholder value at the national and international levels towards a global value chain approach that accounts for how organizations use their resources and capabilities transnationally across the value chain.
... Typically US buyers seek larger volumes and strict process standards; competitive suppliers in basic products must be able to produce large outputs; while EU buyers tend to demand smaller volumes of higher quality product, and more flexibility in operations and lead times (Gibbon, 2008;Morris & Staritz, 2014;Palpacuer, Gibbon, & Thomsen, 2005;Whitfield et al., 2020). In addition, leveraging their purchasing power vis-à-vis suppliers, global buyers use codes of conduct to require suppliers to address social concerns in their operations (Locke, Amengual, & Mangla, 2009;Nath, Eweje, & Bathurst, 2021;van Tulder, 2009). This has increased notably since the deadly Rana Plaza accident in 2013 exposed extremely poor working conditions. ...
The textile and apparel industry is a highly globalized, multi-trillion-dollar sector. Today, production networks are dominated by low-cost Asian countries with very large labor-pools, which has made it increasingly difficult for other producers around the world to compete, including those in Latin America and the Caribbean (LAC). While the region has participated in the industry, there are currently no LAC countries amongst the leading ten exporters. The COVID-19 pandemic, together with rising geopolitical tensions between the US and China, however, has disrupted this well-established business model over the past two to three years. This creates the most significant opportunity of the past decade to reconfigure the geography of the supply chain; as a small, but long-term supplier, with proximity to the worlds largest single market, Central America is well-positioned to benefit from these changes. Nonetheless, the region needs to upgrade various aspects of their GVC participation in order to become a serious contender in the reconfiguration of the industry. Key policies should focus on developing human capital through industry-specific training initiatives; intensifying investment attraction efforts; and aggressively investing in both hard and soft infrastructure to reduce barriers to trade and enhance lead time responsiveness.
... Other major themes in this literature are the effectiveness and legitimacy of this "new mode of governance". In this context, scholars have studied business compliance with voluntary standards, their wider socioeconomic consequences (Cashore, Auld, & Newsom, 2004;Kalfagianni & Pattberg, 2013;Locke, Amengual, & Mangla, 2009), and inquired into the normative and sociological legitimacy of their rule-making activities (Bernstein, 2011;Dingwerth, 2007). Finally, a fast-expanding segment of this literature, studies patterns of interactions (e.g., competition and coordination) between standards systems as well as private standards and public regulatory frameworks (Abbott & Snidal, 2009;Fransen & Conzelmann, 2014;Meidinger, 2006;Overdevest & Zeitlin, 2014;Schleifer, 2013). ...
... Other major themes in this literature are the effectiveness and legitimacy of this "new mode of governance". In this context, scholars have studied business compliance with voluntary standards, their wider socio-economic consequences (Cashore, Auld, & Newsom, 2004;Kalfagianni & Pattberg, 2013;Locke, Amengual, & Mangla, 2009), and inquired into the normative and sociological legitimacy of their rule-making activities (Bernstein, 2011;Dingwerth, 2007). Finally, a fast-expanding segment of this literature, studies patterns of interactions (e.g., competition and coordination) between standards systems as well as private standards and public regulatory frameworks (Abbott & Snidal, 2009;Fransen & Conzelmann, 2014;Meidinger, 2006;Overdevest & Zeitlin, 2014;Schleifer, 2013). ...
... The use of the platform may also decrease the intensity and frequency of more traditional relationships between buyers and supplier factories. Previous research has shown that traditional relationships with focus on commitment between buyers and suppliers can significantly improve practices at supplier factories (Locke et al., 2009), however it is unclear how the existence of such platforms impacts the improvement of working conditions in global supply chains. ...
Purpose
Driven by increasing concerns for sustainable development and digitalization, intermediaries have emerged as relevant actors who can help supply chains tackle grand societal challenges. They can also trigger significant changes in structure, shape and governance models of supply chains. The goal of this research is to advance the understanding of supply chain intermediation and digital governance as coordinating mechanisms for enabling multi-level collective action to address the world's grand challenges.
Design/methodology/approach
This is a conceptual research paper that uses a vignette approach, where real examples are described to help question and expand theoretical insights and provide a basis for future research. The examples are drawn from past and ongoing extensive primary and secondary data collection efforts in diverse types of supply chains.
Findings
Three contexts are proposed to illustrate how intermediaries and digital governance can play a key role in helping supply chains tackle grand challenges. The first and second context highlight the differences between material and support flow intermediaries in a triadic supply chain relationship. The third context illustrates intermediation within a multi-level network which can be industry-specific or span across industries. The three contexts are evaluated on the level of intervention, the focus on material or support flows, and traditional or digital governance. The specific Sustainable Development Goals which can be tackled through intermediary intervention are also indicated.
Originality/value
Intermediaries are often hidden actors in global supply chains and have received limited attention in the academic literature. The conceptual foundation provided in this manuscript serves as the basis for future research opportunities. Three main avenues for further research in this domain are proposed: (1) novel forms of intermediation beyond economic and transactional arrangements; (2) novel forms of digital governance; and (3) translating multi-level collective action into sustainable development outcomes. Research on intermediation driven by sustainable development and digitalization trends can spur empirical advances in sustainable supply chain and operations management with important societal impact.
... A significant body of research provides evidence for the reasons why the social audit should not be used as a proxy for HRDD (Barrientos and Smith 2006;Egels-Zandén and Lindholm 2015;Locke et al. 2007). The research highlights the inherent limitations of the social audit, including but not limited to its superficial 'snapshot' approach to assessing working conditions (LeBaron and Lister 2015), the evidence of audit fraud or fatigue that relies on incomplete or inaccurate information (Baumann-Pauly et al. 2017;Locke et al. 2009) and its focus not on the root causes (why labour violations persist) but on the problem's symptoms (wage discrepancies and forced overtime) and, thus, often conveniently overlooks the role of a lead firm's own business model and purchasing practices in contributing to exploitative work practices further down the supply chain (Anner et al. 2013). Social audits can contribute to the identification pillar of HRDD to highlight specific workplace issues; however, given their often-limited engagement with workers, their utility, even for this, may be useful but not sufficient. ...
Mandatory human rights due diligence is the latest global example of a legislative scheme for fostering corporate action on human rights risks within business supply chains. Such proposals stem from more than 30 years of increased pressure on companies to tackle labour rights abuses. If not clearly defined and implemented, human rights due diligence risks enhancing the legitimacy of techniques such as social auditing to serve as inadequate proxies for due diligence. Without mechanisms to incorporate the views of rights holders in its design and implementation and ensure access to remedies for rights holders, it is perhaps more accurately depicted (for now) as the next shiny thing that may be more a distraction than a substantive mechanism for pursuing real change and redress for labour exploitation in global supply chains.
... SCQL encourages compliance by suppliers with the SC leader's quality standards and practices, while restricting their ability to mistreat their workers or abuse the environment. The result is innovative practices that improve the performance of both the SC leader and SC members (Distelhorst and Locke, 2018;Locke et al., 2009;Rahman, 2013;Rossi, 2013). Both the quality and social responsibility aspects of SCQL capture SC quality leaders' values, responsibilities and activities towards improving the quality of end products and services. ...
... SCQL encourages compliance by suppliers with the SC leader's quality standards and practices, while restricting their ability to mistreat their workers or abuse the environment. The result is innovative practices that improve the performance of both the SC leader and SC members (Distelhorst and Locke, 2018;Locke et al., 2009;Rahman, 2013;Rossi, 2013). Both the quality and social responsibility aspects of SCQL capture SC quality leaders' values, responsibilities and activities towards improving the quality of end products and services. ...
Purpose
As quality issues become more prominent in supply chain (SC) management, understanding the factors driving SC quality integration (SCI Q ) and quality performance has become increasingly important, shifting the focus of quality management to firms in SCs. This study aims to examine the role of SC quality leadership (SCQL) in facilitating SCI Q and its direct and indirect relationship with quality performance.
Design/methodology/approach
Data on 400 Chinese manufacturing firms were collected using survey questionnaires. The hypothesised relationships between SCQL, SCI Q and quality performance were tested using structural equation modeling in AMOS 22.0.
Findings
Empirical results show that SCQL has a positive and significant effect on quality performance and all three dimensions of SCI Q : supplier quality integration, internal quality integration and customer quality integration. The results also show that SCI Q mediates the relationship between SCQL and quality performance.
Practical implications
Executives should develop SCQL to improve SCI Q in their SCs and ultimately improve quality performance. In particular, nurturing SQI can potentially lead to unique capabilities, relative to competitors. They should be aware of their important role in integrating and coordinating between functional units within the firm and between SC members.
Originality/value
This study enriches the SCM literature by identifying SCQL as a new and significant antecedent of SCI Q in manufacturing firms. It contributes to the SC leadership literature by conceptualizing both the quality and social responsibility aspects of SC leadership, conceptualizing SCQL at the firm level and positioning SCI Q as a mediator between SCQL and quality performance.
Automated text analysis approaches such as text mining (TM) and natural language processing (NLP) hold great promise for dealing with the growing volume, diversity, and complexity of the data found within corporate sustainability reports (SRs). However, given the novelty of these approaches, we know little about how and how well these research studies have utilized these new tools-specifically, the methods employed, research objectives addressed, and progress in applying these tools in a manner that would allow us to fully maximize the insights generated from the growing wealth of sustainability data. Consequently, we conduct a systematic literature review (SLR) in order to synthesize and assess the literature utilizing TM-NLP to study SRs. Our contribution is threefold: First, we provide an overview of the methodologies and techniques that have been employed in the analysis of SRs. Second, we review the research objectives pursued by scholars employing TM-NLP in the analysis of SRs. Third, based on these, we present a critical assessment of the literature to date. Findings reveal that while there has been some progress, issues related to research depth, breadth, and methodological transparency are evident in the body of literature to date. As such, we argue that the potential of TM-NLP to generate significant insights from SR big data remains largely unrealized and offer suggestions for future research.
Mijn bijdrage aan het vriendenboek voor Romke's afscheid gaat over paradigmaverschuivingen in het denken over de rol van bedrijven bij het voorkomen van misstanden in mondiale productieketens (vooral de (ultra) fast fashion keten). Waar begin jaren 90 van de vorige eeuw het optimisme domineerde dat bedrijven het sturingsgat dat overheden lieten liggen konden dichten, zijn we nu in een situatie beland waarin de gedachte overheerst dat overheden weer meer verantwoordelijkheid naar zichzelf zou moeten toetrekken om het sturingsgat te dichten dat bedrijven sindsdien hebben laten bestaan.
À partir d’une revue de la littérature sur la responsabilité politique des entreprises dans les économies émergentes et de la notion de frontières – au double sens d’un plancher social et d’un plafond environnemental, cet article analyse les enjeux et les tensions liés à la mise en œuvre de cette responsabilité en s’appuyant sur le terrain empirique d’un projet du fonds Danone Ecosystem auprès de chiffonniers ( pepenadores ) au Mexique. L'article analyse les conditions de mise en œuvre d’une responsabilité politique de l’entreprise qui favorise la justice entre les êtres humains et le respect des frontières planétaires. Ces résultats ont à la fois une portée conceptuelle - étayage composante de la responsabilité politique du projet Danone au Mexique – et managériale – mise en évidence des marges de manœuvres et des tensions auxquelles sont confrontées les parties prenantes responsables des projets ayant une contribution sociétale.
In the rapidly evolving domain of e-commerce logistics, last-mile delivery management has taken centre stage as a critical challenge. This comprehensive study delves into the intricate web of emerging technologies, encompassing autonomous vehicles, drones, smart lockers, and IoT, to unveil their multifaceted impact on the e-commerce logistics sector. Additionally, it explores the indispensable role of real-time delivery tracking in elevating the customer experience. The research findings underscore that the adoption of these cutting-edge technologies not only significantly enhances delivery speed but also contributes to a substantial reduction in operational costs, marking a significant stride in the ever-persistent quest for efficiency and sustainability. Moreover, real-time delivery tracking emerges as a linchpin in customer satisfaction, fostering transparency and delivering enhanced consumer delight. In a broader context, this study illuminates the path toward operational optimization and customer-centric excellence within the e-commerce logistics landscape, heralding a future marked by efficiency, transparency, and heightened customer contentment.
Cultural Intelligence (CQ) is vital in a modern and global-oriented
cross-culture business and management environment. Apart from awareness
and theoretical constructs, business leaders and field-level experts need
practicality to harness CQ for optimal functioning in cross-cultural business.
This information is also vital for students as they prepare for the global
business workforce. Based on a comprehensive overview of the literature, this
chapter will provide students, managers, and field-level experts with practical
ideas and measures they can use to improve their performance in a crosscultural
work environment. While CQ has strong theoretical underpinnings,
drawing out practicality is vital for a thriving and prosperous business
environment. This chapter will better equip managers, field-level practitioners
and students to practice CQ. Readers will also benefit as they learn about
various measures which they can utilize to gauge their practice of CQ and
work towards sharpening and improving their skills.
In this article, I use the emerging concept of geographies of dissociation to examine fragmented labour regimes in global production networks (GPNs). The article takes informality in the Sri Lankan apparel industry and the application of ethical codes as a case example. Using qualitative research methods, I provide a critical analytical lens through which the concept of dissociation makes visible what has been obscured through much of the debate on ethical codes. In so doing, the article makes three contributions to the debate on ethical codes and dissociation. First, I illuminate uneven geographies of ethical codes manifested through highly fragmented workplaces where some workers are excluded from the protection of ethical codes. In so doing, the article challenges the notion of homogenous workplaces, in which, dialectics of inclusion and exclusion of ethical codes often go unnoticed. Secondly, by illustrating bifurcated and inequal labour regimes, I argue that both association and dissociation practices can co-exist in the same workplace at the same time. This is in contrast to the existing works that mostly frame places of dissociation as distant and hidden from the association places. Third, I advance the concept of dissociation beyond its current framing to argue for a notion of collective dissociation emerging from fluid and complex social relations of multi-scalar actors. I argue that in GPNs, such collective practices of dissociation are possible and even necessary given the complex ways firms and non-firm actors are connected to each other from the global scale to the workplace.
This paper explores the debate on MNCs and inequality. It argues that, due to inherent power imbalances in global supply chains, the benefits of MNC-driven growth accumulate to those firms at the top of supply chains at the expense of workers at the bottom, which disproportionately include women and migrant workers. The paper also provides data on shifts in MNCs' investment dynamics and patterns of inequality, and it explores the global apparel industries in Bangladesh and Honduras as important examples of the distributional consequences of MNCs. The paper then examines countermeasures, including domestic and transnational labour organizing strategies that have begun to address these patterns of inequality and exclusion. Multinational Corporations (MNCs) have increasingly linked countries of the Global South to global markets through a complex mix of intra-and inter-organizational networks. For some, they hold the promise of providing host countries with new opportunities to accelerate growth and development. Yet, as will be illustrated in this paper, MNCs also pose challenges to, and impose constraints on economic management. Most notably, the distribution of gains is often not fair, in particular for workers at the bottom of MNC supply chains relative to those at the top of the lead firms. The MNC-led growth model, which most often takes the form of considerable tax and tariff breaks, raises the question as to whether workers in MNCs might even under some circumstances earn less than they might otherwise had tax and other incentives been used to favour local businesses over foreign investors. Hence, the most relevant question-and the one that relates to the theme of this conference-is how the gains from MNC investment are
What makes bureaucracy work for the least advantaged? Across the world, countries have adopted policies for universal primary education. Yet, policy implementation is uneven and not well understood. Making Bureaucracy Work investigates when and how public agencies deliver primary education across rural India. Through a multi-level comparative analysis and more than two years of ethnographic field research, Mangla opens the 'black box' of Indian bureaucracy to demonstrate how differences in bureaucratic norms - informal rules that guide public officials and their everyday relations with citizens - generate divergent implementation patterns and outcomes. While some public agencies operate in a legalistic manner and promote compliance with policy rules, others engage in deliberation and encourage flexible problem-solving with local communities, thereby enhancing the quality of education services. This book reveals the complex ways bureaucratic norms interact with socioeconomic inequalities on the ground, illuminating the possibilities and obstacles for bureaucracy to promote inclusive development.
Despite a large academic interest in the topic of international business policy in recent years, there remains substantial ambiguity about its meaning. In this chapter, we define international business policy as the mix of actions that a public authority takes to shape international business with the goal of addressing societal challenges. We use this definition to delineate the field of international business policy and to demonstrate its distinctive characteristics. We discuss the central role that traditional international business research can play in the development of new studies on international business policy.
This article examines the construction and implementation of the Sullivan Principles, a two-decade effort to use corporate codes of conduct to improve the behavior of multinational corporations in South Africa under apartheid. Without organized social movement pressure, corporations would not have agreed to adopt the code, and corporate compliance required sustained pressure from the anti-apartheid movement. The system's independent monitoring process was problematic, and managers' definitions of “good corporate citizenship” were more guided by monitors'emphases than by substantive concerns. Based on the historic case, the article raises questions about the voluntaristic, stateless character of transnational corporate codes of conduct and questions whether such codes offer a viable strategy for improving working conditions.
Can workers’ rights and social protections be reconciled with firms’ competitiveness and productivity? In contrast to current development policy advice, which emphasizes the “flexibilization” of labour laws, this article contributes to an ongoing debate about styles of inspection by exploring the causal links between different regulatory practices and economic development and compliance outcomes. Findings from subnational comparisons in Brazil challenge established theories about the behaviours of firms and regulatory agencies, and indicate that labour inspectors have been able to promote sustainable compliance (legal and technical solutions linking up workers' rights with firms’ performance) by combining punitive and pedagogical inspection practices.
This article builds a theoretical framework to help explain governance patterns in global value chains. It draws on three streams of literature – transaction costs economics, production networks, and technological capability and firm-level learning – to identify three variables that play a large role in determining how global value chains are governed and change. These are: (1) the complexity of transactions, (2) the ability to codify transactions, and (3) the capabilities in the supply-base. The theory generates five types of global value chain governance – hierarchy, captive, relational, modular, and market – which range from high to low levels of explicit coordination and power asymmetry. The article highlights the dynamic and overlapping nature of global value chain governance through four brief industry case studies: bicycles, apparel, horticulture and electronics.
On the basis of interviews with regulatory agencies and business firms in the United States, we outline three implicit “theories” of why business firms violate the law-economic calculation, principled disagreement, and incompetence. Each gives rise to a different emphasis in enforcement-deterrence, negotiation, and education. Enforcement based on any single theory of noncompliance is shown to be counter-productive when violations occur for one of the other reasons. Flexible enforcement, based on the analysis of the specific cause of each particular violation, is inhibited by technical, bureaucratic and political contraints.
This paper situates the field of action known as “corporate social responsibility” within the theoretical context of global capitalism. I posit that corporate social responsibility (CSR) is a field of action that is shaped through the interplay of popular pressures and the response of corporations to such pressures thereof. Specifically, I analyze this field as consisting of a symbolic struggle over the meaning of the term “social responsibility.” I analyze a set of corporate practices relating to CSR and show how they shape the notion of responsibility in ways that diffuse its radical transformative potential. In particular, I look at various corporate strategies designed to prevent the use of law as means for bringing about greater corporate accountability. I also discuss particular agents that mobilize the CSR field. Specifically, I discuss the establishment of corporate-sponsored and corporate-oriented NGOs and analyze the role they play in structuring the CSR field. I designate such organizations as MaNGOs (Market Non-Governmental Organizations) and suggest that such organizations shape notions such as “social responsibility” and “social change” in ways that are amenable to business and employers' concerns.
Protesters now routinely fill the streets when any large, formal meeting dealing with international economic issues takes place. They express concern about the potential social and environmental costs of globalization and want negotiators to address these issues in trade agreements and international organizations. In addition, the debate over whether and how to link labor standards to trade has led to an impasse in American trade policy for much of the past decade and has tied the hands of US trade negotiators. Proposals to "let the market do it" or "let the International Labor Organization (ILO) do it" abound, but it is less common to find any serious analysis of just how activists can galvanize consumers to demand that corporations raise labor standards in their global operations or how the ILO can become more effective.In this study, Elliott and Freeman move beyond the debate on the relative merits and risks of a social clause in trade agreements and focus on practical approaches for improving labor standards in a more integrated global economy. The authors examine both what is being done in these areas and what more needs to be done to ensure that steady and tangible progress toward universal respect for core labor standards is made. While concluding that the ILO should have primary responsibility for labor standards, the book also suggests that the WTO should consider how to address egregious and willful violations of core labor standards if they are trade related.
This doctoral dissertation aims to offer new insights into the environmental compliance behavior of small firms (SFs). Specifically, the dissertation examines the impacts of two categories of factors. The first category concerns internal motivations that drive SFs' decisions to comply or not comply with a formal environmental regulation. The other comprises external factors that affect formation of SFs' perspectives on rule compliance. Rule compliance behavior results from complicated webs of both economic and social factors. Nevertheless, existing regulatory enforcement strategies have focused heavily on rational/economic factors without considering the significant effects of interactions between the two and consequently failed to produce the behavior they seek. Starting from an examination of the crucial characteristics of SFs that distinguish them from large firms, the dissertation sheds light on how social factors affect SFs' views on economic factors such as the price of penalty and compliance costs/benefits. In so doing, it contributes to knowledge of how formal regulatory enforcement can alter SFs' environmental compliance behavior. The regulatory programs in Massachusetts and southern California targeting the dry cleaning industry are excellent cases through which to evaluate the central issues of SFs' compliance.
Since the early 1980s there has been an explosion of auditing activity in the United Kingdom and North America. In addition to financial audits there are now medical audits, technology audits, value for money audits, environmental audits, quality audits, teaching audits, and many others. Why has this happened? What does it mean when a society invests so heavily in an industry of checking and when more and more individuals find themselves subject to formal scrutiny? The Audit Society argues that the rise of auditing has its roots in political demands for accountability and control. At the heart of a new administrative style internal control systems have begun to play an important public role and individual and organizational performance has been increasingly formalized and made auditable. Michael Power argues that the new demands and expectations of audits live uneasily with their operational capabilities. Not only is the manner in which they produce assurance and accountability open to question but also, by imposing their own values, audits often have unintended and dysfunctional consequences for the audited organization. Available in OSO: http://www.oxfordscholarship.com/oso/public/content/management/9780198296034/toc.html
I. Introduction Since the turn of the century, legislation in Western countries has expanded rapidly to reverse the brief dominance of laissez faire during the nineteenth century. The state no longer merely protects against violations of person and property through murder, rape, or burglary but also restricts "dis crimination" against certain minorities, collusive business arrangements, "jaywalking," travel, the materials used in construction, and thousands of other activities. The activities restricted not only are numerous but also range widely, affecting persons in very different pursuits and of diverse social backgrounds, education levels, ages, races, etc. Moreover, the likeli hood that an offender will be discovered and convicted and the nature and extent of punishments differ greatly from person to person and activity to activity. Yet, in spite of such diversity, some common properties are shared by practically all legislation, and these properties form the subject matter of this essay. In the first place, obedience to law is not taken for granted, and public and private resources are generally spent in order both to prevent offenses and to apprehend offenders. In the second place, conviction is not generally considered sufficient punishment in itself; additional and sometimes severe punishments are meted out to those convicted. What determines the amount and type of resources and punishments used to enforce a piece of legislation? In particular, why does enforcement differ so greatly among different kinds of legislation?
Using a unique data set based on factory audits of working conditions in over 800 of Nike’s suppliers across 51 countries over the years 1998–2005, the authors explore whether monitoring for compliance with corporate codes of conduct—currently the principal way both global corporations and labor rights non-governmental organizations (NGOs) address poor working conditions in global supply chain factories—achieved remediation, as indicated by improved working conditions and stepped-up enforcement of labor rights. Despite substantial efforts and investments by Nike and its staff to improve working conditions among its suppliers, monitoring alone appears to have produced only limited results. However, when monitoring efforts were combined with other interventions focused on tackling some of the root causes of poor working conditions—in particular, by enabling suppliers to better schedule their work and to improve quality and efficiency—working conditions seem to have improved considerably.
With the continuing expansion of global economic integration, labor standards in developingcountries have become a hot button issue. One result has been a proliferation of efforts to usethe market to put pressure directly on multinational corporations to improve wages andworking conditions in their overseas operations and to insist that their suppliers do so as well.This paper analyzes the dynamics of these efforts in terms of a 'market for standards' in whichconsumers, stimulated by human rights activists, demand that corporations improve workingconditions in supplier factories. The paper presents evidence that such a consumer demandexists and analyzes the incentives corporations face to respond to it. It examines the nature ofthe critical intermediary role played by activists in stimulating consumer demands andassesses the outcomes in the major anti-sweatshop campaigns of the 1990s. The paper alsoaddresses the limitations of such consumer-based campaigns and the concern expressed bysome that these activist campaigns may do more harm than good, by deterring investment inand trade with poor countries. It concludes with an overall assessment of when ¿doing good¿actually does good.
Workplaces in America and elsewhere show pervasive job dissatisfaction, distrust, and disengagement, with the evidence suggesting that these problems are getting worse and have a number of negative consequences for employers as well as employees. What follows is a necessarily selective exploration of human resource management in organizations, covering why it is often done so badly, what theory suggests about how to do it better, and why so little of what is known is actually implemented.
Ivanka MamicBusiness and Code of Conduct Implementation," (Geneva: International Labour OrganizationSocial Auditing, Freedom of Association and the Right to Collective Bargaining Corporate social responsibility: Myth or reality?
- Smith Barrientos
38 Barrientos and Smith, "Report on the ETI Impact Assessment 2006;" Ivanka Mamic, "Business and Code of
Conduct Implementation," (Geneva: International Labour Organization, 2003); Philip Hunter and Michael
Urminsky, "Social Auditing, Freedom of Association and the Right to Collective Bargaining," in Labour Education,
no. 130/1, Corporate social responsibility: Myth or reality? (Geneva: International Labor Organization, 2003) 47-
53.
Going by the Book; and for an early formulation of these two models, as they applied to US workplaces From Control to Commitment in the Workplace
- See Bardach
- Kagan Richard
- E Walton
See Bardach and Kagan, Going by the Book; and for an early formulation of these two models, as they applied to
US workplaces, see Richard E. Walton, " From Control to Commitment in the Workplace, " Harvard Business
Review 63, no. 2 (March-April 1985): 77-84.
Civil Society, NGOs and Decent Work Policies: Sorting out the Issues International Labor Organization (Geneva: International Institute for Labour Studies
- Lucio Baccaro
Lucio Baccaro, "Civil Society, NGOs and Decent Work Policies: Sorting out the Issues," International Labor
Organization (Geneva: International Institute for Labour Studies, 2001) at
http://www.ilo.org/public/english/bureau/inst/download/dp12701.pdf; Kimberly Ann Elliott and Richard B.
ABC's compliance program remains open to external monitoring and evaluation
- Moreover
Moreover, ABC's compliance program remains open to external monitoring and evaluation.
For another fascinating account of the limits of monitoring approaches, even by well-financed, well-trained, committed auditors, see Constructing a Culture of Compliance
- Gay W Sweatshop Inspector
- Seidman
Sweatshop Inspector, " Washington Monthly 40, no. 4 (April 2008): 34-37. For another fascinating account of the
limits of monitoring approaches, even by well-financed, well-trained, committed auditors, see Gay W. Seidman,
" Constructing a Culture of Compliance, " in Beyond the Boycott, 102-131.
10 For an overview of these debates, see: Richard Locke, Fei Qin, and Alberto BrauseDoes Monitoring Improve Labor Standards?: Lessons from Nike
10 For an overview of these debates, see: Richard Locke, Fei Qin, and Alberto Brause, "Does Monitoring Improve
Labor Standards?: Lessons from Nike," Industrial and Labor Relations Review 61, no. 1 (2007): 3-31.
Promoting International Worker Rights through Private Voluntary Initiatives: Public Relations or Public Policy University of Iowa Center for Human Rights (UICHR) at http://www.uiowa
- Elliot J Schrage
For a good description of this movement, see Elliot J. Schrage, "Promoting International Worker Rights through
Private Voluntary Initiatives: Public Relations or Public Policy?" University of Iowa Center for Human Rights
(UICHR) at http://www.uiowa.edu/~uichr/publications/documents/gwri_report_000.pdf and Ivanka Mamic,
Implementing Codes of Conduct: How Businesses Manage Social Performance in Global Supply Chains (Geneva:
International Labor Organization, 2004).
Regulating Labor Standards in the Garment Industry, " (paper presented at the " Just Supply Chain); and Roberto Pires Promoting sustainable compliance: Styles of labour inspection and compliance outcomes in Brazil
53 For interesting examples of analogous processes, see David Weil, Carlos Mallo and Amanda Pyles, " Regulating
Labor Standards in the Garment Industry, " (paper presented at the " Just Supply Chain " Workshop, Massachusetts
Institute of Technology, January 11, 2008); and Roberto Pires, " Promoting sustainable compliance: Styles of labour
inspection and compliance outcomes in Brazil, " International Labour Review 147, no. 2-3 (2008): 199-229.
The Impact of Private Codes and the Union Movement " (paper presented at XXIII International Congress of the Latin American Studies Association
- J Henry
- Frundt
Henry J. Frundt, " The Impact of Private Codes and the Union Movement " (paper presented at XXIII International
Congress of the Latin American Studies Association, Washington, D.C., 2001).
Smoke from a Hired Gun: A Critique of Nike's Labor and Environmental Auditing in Vietnam as Performed by Ernst & Young
- O' See Dara
- Rourke
For a critique of the auditing process, see Dara O'Rourke, "Smoke from a Hired
Gun: A Critique of Nike's Labor and Environmental Auditing in Vietnam as Performed
by Ernst & Young," Transnational Resource and Action Center, 1997, http://www.corpwatch.org/article.php?id=966.
Does Monitoring Improve Labor StandardsReport on the ETI Impact Assessment
- Qin Locke
- Brause Stephanie Barrientos
- Sally Smith
Locke, Qin, and Brause, "Does Monitoring Improve Labor Standards? " and Stephanie Barrientos and Sally Smith,
"Report on the ETI Impact Assessment 2006." (Institute of Development Studies, University of Sussex, 2006) at
http://www.ethicaltrade.org/Z/lib/2006/09/impact-report/index.shtml.
Can We Put an End to Sweatshops? A New Democracy Forum on Raising Global Labor Standards
- Archon Fung
- Dara O Rourke
- Charles Sabel
Archon Fung, Dara O'Rourke, and Charles Sabel, Can We Put an End to Sweatshops? A New Democracy Forum
on Raising Global Labor Standards (Boston: Beacon Press, 2001).
Activists Beyond Borders: Advocacy Networks in International Politics
- See
- N Y For Exampleithaca
See, for example: Margaret E. Keck and Kathryn Sikkink, Activists Beyond Borders: Advocacy Networks in
International Politics (Ithaca, N.Y.: Cornell University Press, 1998); Gay Seidman, Beyond the Boycott: Labor
Rights, Human Rights, and Transnational Activism (New York: American Sociological Association's Rose Series:
Russell Sage Foundation Press, 2007).
Excessive Overtime in Chinese Supplier Factories: Causes, Impacts, and Recommendations for Action
- See Verité
45 See Verité, "Excessive Overtime in Chinese Supplier Factories: Causes, Impacts, and Recommendations for
Action," http://www.verite.org/news/Excessiveovertime.
Civil Society, NGOs, and Decent Work Policies: Sorting Out the Issues
- Lucio Baccaro
Lucio Baccaro, "Civil Society, NGOs, and Decent Work Policies: Sorting Out
the Issues," International Institute of Labour Studies, Discussion Paper No. 127,
2001; Kimberly Ann Elliott and Richard B. Freeman, Can Standards Improve under
Globalization? (Washington, DC: Institute for International Economics, 2003).
pdf; and Ivanka Mamic, Implementing Codes of Conduct: How Businesses Manage Social Performance in Global Supply Chains
- Elliot J See
- Schrage
For a good description of this movement, see Elliot J. Schrage, "Promoting
International Worker Rights through Private Voluntary Initiatives: Public Relations or
Public Policy?" University of Iowa Center for Human Rights, http://www.uiowa.
edu/~uichr/publications/documents/gwri_report_000.pdf; and Ivanka Mamic, Implementing Codes of Conduct: How Businesses Manage Social Performance in Global
Supply Chains (Geneva, Switzerland: International Labor Organization, 2004).
For an interesting historical review of corporate codes of conduct and their evolution over time, see Rhys Jenkins
For an interesting historical review of corporate codes of conduct and their evolution over time, see Rhys Jenkins, "Corporate Codes of Conduct: Self-Regulation in a
Global Economy," United Nations Research Institute for Social Development, http://
www.eldis.org/static/DOC9199.htm. Another interesting historical parallel can be found
in Gay W. Seidman, "Monitoring Multinationals: Lessons from the Anti-Apartheid Era,"
Politics & Society 31, no. 3 (2003): 381-406.
For an overview of these debates
- Fei See Richard Locke
- Alberto Qin
- Brause
For an overview of these debates, see Richard Locke, Fei Qin, and Alberto Brause,
"Does Monitoring Improve Labor Standards? Lessons from Nike," Industrial and Labor
Relations Review 61, no. 1 (2007): 3-31.
Does Monitoring Improve Labor Standards?"; and Stephanie Barrientos and Sally Smith
- Locke
Locke et al., "Does Monitoring Improve Labor Standards?"; and Stephanie
Barrientos and Sally Smith, "Report on the ETI Impact Assessment 2006," Institute of
Development Studies, University of Sussex, 2006, http://www.ethicaltrade.org/Z/
lib/2006/09/impact-report/index.shtml.
Constructing a Culture of Compliance
- Seidman
Seidman, "Constructing a Culture of Compliance," in Beyond the Boycott, 102-31.
350
POLITICS & SOCIETY
This price reflects the free on board, or FOB, price, which denotes the price of the good minus its shipping to market. Companies vary on who
- Philip Hunter
- Michael Urminsky
Philip Hunter and Michael Urminsky, "Social
Auditing, Freedom of Association and the Right to Collective Bargaining," in Labour
Education, no. 130/1, Corporate Social Responsibility: Myth or Reality? (Geneva,
Switzerland: International Labor Organization, 2003), 47-53.
39. This price reflects the free on board, or FOB, price, which denotes the price of the
good minus its shipping to market. Companies vary on who (manufacturer or buyer) is
responsible for the cost of shipping.
For more on the differences and synergies between the forcing and fostering approaches to labor-management relations
- Richard E See
- Joel E Walton
- Robert B Cutcher-Gershenfeld
- Mckersie
For more on the differences and synergies between the forcing and fostering
approaches to labor-management relations, see Richard E. Walton, Joel E. Cutcher-Gershenfeld, and Robert B. McKersie, Strategic Negotiations: A Theory of Change in
Labor-Management Relations (Ithaca, NY: Cornell University Press, 2000).
The tensions and symbiotic relationship between elements of the traditional compliance model and commitment approach are brought out most clearly in Keith Hawkins, Law as a Last Resort: Prosecution Decision-making in a Regulatory Agency
- See Kagan
- Richard E Scholz
- Walton
See Kagan and Scholz, "Criminology of the Corporation."
50. See Bardach and Kagan, Going by the Book; and for an early formulation of these
two models as they applied to U.S. workplaces, see Richard E. Walton, "From Control
to Commitment in the Workplace," Harvard Business Review 63, no. 2 (March-April
1985): 77-84.
51. The tensions and symbiotic relationship between elements of the traditional compliance model and commitment approach are brought out most clearly in Keith Hawkins,
Law as a Last Resort: Prosecution Decision-making in a Regulatory Agency (Oxford,
UK: Oxford University Press, 2003);
Criminology of the Corporation"; and Wilson, Varieties of Police Behavior. 53. For interesting examples of analogous processes
- Scholz Kagan
Kagan and Scholz, "Criminology of the Corporation"; and Wilson, Varieties of
Police Behavior.
53. For interesting examples of analogous processes, see David Weil, Carlos Mallo, and
For further discussion of the limitations of private initiatives with regard to citizenship rights
- Amanda Pyles
Amanda Pyles, "Regulating Labor Standards in the Garment Industry" (paper, Just Supply
Chain Workshop, Massachusetts Institute of Technology, January 11, 2008); and Roberto
Pires, "Promoting Sustainable Compliance: Styles of Labour Inspection and Compliance
Outcomes in Brazil," International Labour Review 147, no. 2-3 (2008): 199-229.
54. For further discussion of the limitations of private initiatives with regard to citizenship rights, see Seidman, Beyond the Boycott.
Professor of Entrepreneurship and Professor of Political Science at the Massachusetts Institute of Technology. His research is focused on improving labor and environmental conditions in global supply chains. He is leading the MIT Sloan Sustainable Business and Society Initiative
- Richard Locke
Richard Locke (rlocke@mit.edu) is Deputy Dean of the MIT Sloan School of
Management and the Alvin J. Siteman (1948) Professor of Entrepreneurship and
Professor of Political Science at the Massachusetts Institute of Technology. His
research is focused on improving labor and environmental conditions in global
supply chains. He is leading the MIT Sloan Sustainable Business and Society
Initiative. His research is focused on improving labor and environmental conditions in global supply chains.
) is a PhD candidate in the Department of Political Science at the Massachusetts Institute of Technology. He is researching how relationships between government bureaucracies and societal groups influence the implementation of labor and environmental regulations in Argentina
- Matthew Amengual
Matthew Amengual (amengual@mit.edu) is a PhD candidate in the Department of
Political Science at the Massachusetts Institute of Technology. He is researching
how relationships between government bureaucracies and societal groups influence the implementation of labor and environmental regulations in Argentina.
) is a PhD candidate in the Department of Political Science at the Massachusetts Institute of Technology. His research examines how the state implements policies to universalize primary education in rural India
- Akshay Mangla
Akshay Mangla (amangla@mit.edu) is a PhD candidate in the Department of
Political Science at the Massachusetts Institute of Technology. His research examines
how the state implements policies to universalize primary education in rural India.