Beyond brokering: Sourcing agents, boundary work and working conditions in global supply chains

Soundararajan, Vivek; Khan, Zaheer; Tarba, Shlomo

doi:10.1177/0018726716684200

Cited by 62 publications

(62 citation statements)

References 76 publications

(135 reference statements)

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“…Munir, Ayaz, Levy, and Willmott (2018) scrutinized how corporate, state, multilateral, and civil society actors have served as intermediaries in global production network (GPN) governance. More closely related to our study's focus, Soundararajan, Khan, and Tarba (2018) highlight the role of sourcing agents as boundary spanners between Western buyers and local suppliers who contribute to labor standards in the Indian garment industry. Building on this, the present research studies, among other things, the role of first‐tier suppliers as intermediaries to diffuse labor standards from the focal buying company toward subcontractors.…”

Section: Diffusion Of Sustainability Along Supply Networkmentioning

confidence: 76%

Diffusion of labor standards through supplier–subcontractor networks: An agent‐based model

Gold

Chesney

Gruchmann

et al. 2020

J of Industrial Ecology

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Subcontracting represents a popular business model in supply chains across industries. In the case of hidden subcontracting, subcontractors are beyond the visible horizon of the (focal) buying firm. Hence, buyers must rely on a cascading effect for diffusing practices such as compliance with labor standards through their supply networks. Motivated by the case of the Bangladeshi garment industry, we constructed an agent‐based model with buyers, first‐tier suppliers, and subcontractors as agents in a supply network in order to study the impact of network characteristics on the diffusion of labor standards. Our model followed a power‐based diffusion rule that emphasized the coercive power that buyers use to pressure their suppliers into adopting labor standards. This rule is a key underlying assumption of compliance‐based supplier management. Hypotheses regarding power asymmetries through centrality and density of specific network components, as well as structural elements of the network, such as complexity and distance, were tested for different industry scenarios. Our analysis demonstrated that network asymmetries have ample negative effects on the adoption of labor standards, whereas complexity plays a minor role. Moreover, the impact of the tested structural determinants for sustainability diffusion was found to be contingent on specific industry types in the garment industry. This paper discusses its findings in light of previous research on subcontracting and multitier supply chain management. Among others, we highlight how subcontracting increases horizontal complexity at each supply chain tier, and how intermediaries such as sustainability nexus suppliers may crucially affect the adoption of labor standards within industries.

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Section: Diffusion Of Sustainability Along Supply Networkmentioning

confidence: 76%

Diffusion of labor standards through supplier–subcontractor networks: An agent‐based model

Gold

Chesney

Gruchmann

et al. 2020

J of Industrial Ecology

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“…The limitation of cheap talk is that it might not always work. Parties may have lack a socio-cognitive common ground, language barriers may deter communication, and geographic distance may inhibit that discourages face-to-face exchanges (Abdi and Aulakh 2017;Soundararajan et al 2017). This can be managed, however, by deliberate engagement with the other party and the use of intermediaries to translate messages through socio-cognitive lenses.…”

Section: Signaling In the Precontractual Environmentmentioning

confidence: 99%

The Role of Precontractual Signals in Creating Sustainable Global Supply Chains

Bird

Soundararajan

2018

J Bus Ethics

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Global supply chains enhance value, but are subject to governance problems and encourage evasive practices that deter sustainability, especially in developing countries. This article proposes that the precontractual environment, where parties are interested in trade but have not yet negotiated formal terms, can enable a unique process for building long-term sustainable relations. We argue that precontractual signals based on relation-specific investments, promises of repeated exchange, and reassuring cheap talk can be leveraged in precontract by the power of framing. We show how these framing signals are amplified in precontract because the lack of credible information, minimal time for reflection, and the role of risk-aversion present in supply chain contract negotiations. The result is a process that is uniquely productive for building long-term and valuegenerating contractual relations in supply chains, particularly in skeptical or even hostile negotiating contexts. We then show how framed precontractual signals generate a joint contractual surplus through a supernormal profit known as a relational rent. This rent can be invested to improve sustainable practices, an efficient option in a competitive market due to the second order effects that sustainable practices generate. This novel process we propose thus potentially generates superior returns to other trust measures and encourages focus on precontract as a fertile environment for building sustainable investments. Keywords Sustainability • Global supply chains • Precontract • Framing • Developing countries Sustainability is an important component of multi-tier global supply chains (Levy et al. 2015). 1 There is evidence that sustainable supply chains improve product quality (Van der Vorst et al. 2009), unlock new markets (Hassini et al. 2012), increase consumer engagement (Linton et al. 2007), and deliver superior economic performance (Rao and Holt 2005). Sustainability in global supply chains is also of pressing social importance, impacting the health, safety, human rights, and economic development of workers (Maloni and Brown 2006). Sustainable practices also influence important environmental challenges such as climate change, pollution, and hyper-exploitation of non-renewable resources (Linton et al. 2007). As a result, a growing literature has emerged

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“…The realisation of the complexities associated with the direct management of the social sustainability practices adopted by sub‐suppliers has led lead firms to transferring their responsibilities to intermediaries, such as first‐tier suppliers and sourcing agents. However, research has just begun to the scratch the surface of the relationship between intermediaries and sub‐suppliers with respect to the management of supply chain sustainability (e.g., Soundararajan et al, 2018; Wilhelm et al, 2016). Our study complements these studies by shedding light on the ‘micro‐level behavioural processes’ (Staw and Sutton, 2000) involved in the exchanges between sub‐suppliers and intermediaries with respect to social sustainability.…”

Section: Resultsmentioning

confidence: 99%

“…By adopting such measures, both types of lead firms shifted part of their responsibilities to intermediaries (i.e., first-tier suppliers or sourcing agents), which were expected to play double-agency (Wilhelm et al, 2016) or boundary-spanning roles (Soundararajan et al, 2018), ascertaining that the sub-supplier networks under their control complied with lead firm expectations in terms of working conditions. The ways in which the lead firms shifted their responsibilities in part influenced the type of framing adopted by their intermediaries towards social sustainability requirements.…”

Section: Factors Influencing Intermediaries' Framing Of Social Sustaimentioning

confidence: 99%

“…For example, Wilhelm et al (2016) showed how and under what conditions first‐tier suppliers take on a double agency role that sees them acting as agents for their lead firms implementing the sustainability requirements in their own operations, and acting as agents to make their suppliers implement the sustainability requirements imposed by the lead firms. Similarly, Soundararajan et al (2018) explored the boundary‐spanning role played by the sourcing agents commonly found in the textile and garment supply chains in improving working conditions. They showed that, under certain conditions, sourcing agents act as boundary spanners performing work aimed at dismantling or bridging the various boundaries that affect the interaction between lead firms and sub‐suppliers with respect to improving working conditions.…”

Section: Introductionmentioning

confidence: 99%

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Developing country sub‐supplier responses to social sustainability requirements of intermediaries: Exploring the influence of framing on fairness perceptions and reciprocity

Soundararajan

Brammer

2018

J of Ops Management

Self Cite

101

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Research on social sustainability in multi‐tier supply chains is limited. Specifically, we know very little about a) the micro‐processes involved in the way in which sub‐suppliers (i.e., first‐tier suppliers or sourcing agents) respond to the sustainability requirements imposed by their intermediaries; and b) the micro‐level antecedents that condition their responses. To address these gaps, we used a longitudinal multiple case study method to explore multiple intermediary – sub‐supplier dyads in South India's knitwear garment industry and drew upon constructs of behavioural economics. We found that the way in which intermediaries frame social sustainability requirements and their associated procedures influence both the way in which sub‐suppliers perceive the procedural fairness of those requirements and the way in which they thus reciprocate. When intermediaries frame social sustainability requirements as ‘opportunity’ and engage in various procedures perceived to be procedurally fair by sub‐suppliers, the latter reciprocate positively. Contrastingly, when intermediaries frame social sustainability requirements as ‘insulation’ and engage in various procedures perceived to be procedurally unfair by sub‐suppliers, the latter reciprocate negatively. Under the production‐dominant framing, sub‐suppliers exhibit positive reciprocity only related to processing production orders. Our analysis inductively generated propositions that emphasize the important role played by framing in shaping the perceptions of fairness held by sub‐suppliers towards social sustainability requirements and the reciprocity of the latter's responses to them.

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Beyond brokering: Sourcing agents, boundary work and working conditions in global supply chains

Cited by 62 publications

References 76 publications

Diffusion of labor standards through supplier–subcontractor networks: An agent‐based model

Diffusion of labor standards through supplier–subcontractor networks: An agent‐based model

The Role of Precontractual Signals in Creating Sustainable Global Supply Chains

Developing country sub‐supplier responses to social sustainability requirements of intermediaries: Exploring the influence of framing on fairness perceptions and reciprocity

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