Can Brands Claim Ignorance? Unauthorized Subcontracting in Apparel Supply Chains

Caro, Felipe; Lane, Leonard; Cuenca, Anna Sáez de Tejada

doi:10.2139/ssrn.3621141

Cited by 13 publications

(11 citation statements)

References 22 publications

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“…SCM scholars have developed sophisticated supply chain mapping and tracing tools, but researching informal supplier networks might pose unique challenges due to data access problems. It is not impossible, however, as the recent study of Caro et al (forthcoming) on unauthorized subcontracting demonstrates. The authors show that price pressures and “state dependence” (i.e., the status of an order carrying over to the next one) are critical drivers for unauthorized subcontracting by suppliers.…”

Section: Working Conditions In Supply Chains: a Humanizing Research Amentioning

confidence: 99%

Humanizing Research on Working Conditions in Supply Chains: Building a Path to Decent Work

Soundararajan

Wilhelm

Crane

2021

J Supply Chain Manag

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Research on managing working conditions in the supply chain is currently conducted under the umbrella of “social” sustainability. In this introduction to the 2021 Emerging Discourse Incubator, “Managing Working Conditions in Supply Chains: Towards Decent Work,” we argue that the trajectory of this research may be insufficient for addressing decent work. This is due to four characteristics of the extant literature—buyer‐centrism, product‐centrism, techno‐centrism, and social‐centrism. As an alternative, we offer ways to ‘humanize’ research on working conditions in supply chains across four dimensions: actors, issues, contexts, and methods. Through humanization, supply chain research has the potential to make a significant scholarly impact as well as to contribute to the realization of decent work in supply chains. We use our proposed path forward as a lens to elaborate on the core contributions of the four invited papers in the Emerging Discourse Incubator.

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Section: Working Conditions In Supply Chains: a Humanizing Research Amentioning

confidence: 99%

Humanizing Research on Working Conditions in Supply Chains: Building a Path to Decent Work

Soundararajan

Wilhelm

Crane

2021

J Supply Chain Manag

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“…In so doing, downward coupling with worker preferences is likely to be downplayed. And, to survive with typically thin profit margins, factory owners may compensate for the costs of compliance by intensifying work, using temporary workers, or subcontracting work to unauthorized factories (Alamgir & Banerjee, 2019;Barrientos & Kritzinger, 2004;Lund-Thomsen, 2013;Caro, Lane, Saez de Tejada Cuenca, 2021). It is not surprising then that some workers shun intense and rigid jobs at large compliant Indian garment factories and choose to work at small workshops for higher pay and autonomy (De Neve, 2014).…”

Section: Private Regulation In Global Supply Chains: Decoupling and T...mentioning

confidence: 99%

“…Constrained by low profit margins (Clelland, 2014), supplier factories may not have extra resources to implement practices that are crucial to attracting and retaining workers. Factory owners may compensate for the costs of compliance by intensifying work or subcontracting work to unauthorized factories (Alamgir & Banerjee, 2019;Lund-Thomsen, 2013;Caro et al, 2021). Indeed, Barrientos (2008) argues that corporate codes improved standards for some regular workers but simultaneously led to high labour mobility in global supply chains as suppliers use contract workers or subcontractors to reduce costs.…”

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confidence: 99%

Corporate codes of conduct and labour turnover in global apparel supply chains

Kuruvilla

2022

Brit J Industrial Rel

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Research on private regulation of labour issues in globalsupply 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. INTRODUCTIONAbout 25 years ago, multinational corporations (MNCs, e.g., Levi's and Nike) adopted codes of conduct (CoCs) and auditing for their supply chain factories. This 'private regulation' modelThis is an open access article under the terms of the Creative Commons Attribution License, which permits use, distribution and reproduction in any medium, provided the original work is properly cited.

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“…backdrop of global supply chains, the latter has focused on sourcing from suppliers prone to violating social and environmental standards. The literature on responsible operations explores the effectiveness of interventions such as supplier choice (Guo et al 2015), sourcing channel (de Zegher et al 2019), and certification (Chen and Lee 2016), and it highlights the perils of subcontracting (Caro et al 2020). Several authors have focused on incentives under different regulatory policies (e.g., Plambeck and Wang 2009, Atasu and Subramanian 2012, Serpa and Krishnan 2016.…”

Section: Related Literaturementioning

confidence: 99%

Prevent or Report? Managing Near Misses for Safer Operations

Bakshi

Peura

2022

M&SOM

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Problem Definition: Firms can reduce the risk of rare disasters by accounting for more frequent near misses: precursor events that could have escalated to a disaster but did not. Investigating a near miss reveals its root cause, allowing the firm to improve process safety and reduce disaster risk. A managing firm, however, usually does not directly observe the occurrence of a near miss but instead relies on the report of an agent (an employee or contractor) who is also responsible for precautionary measures that prevent such incidents. This paper explains why near-miss reporting may not take place in such a decentralized setting. Academic/practical relevance: Literature and practitioners have acknowledged the crucial role of near-miss reports in improving process safety. Nevertheless, even at sophisticated and experienced organizations, disaster inquiries invariably uncover a history of unreported or ignored near misses preceding an accident. We provide an explanation for this persistent phenomenon based on rational economic incentives. Methodology: We examine the firm’s problem through a dynamic principal-agent model that captures the agent’s potential for under-reporting near misses along with moral hazard related to their precautionary effort. Results: We find that the firm may fail to capitalize on near miss information because of conflicting incentives. For instance, the agent may be unwilling to report near misses because the resulting safety improvements hurt them financially. This happens because safety improvements replace the need for the agent’s precautionary effort, thereby lowering moral hazard and allowing the firm to extract more rent from the agent. However, even when the agent is willing to report near misses, we find that the firm may choose not to record them, opting instead to create stronger incentives for precaution. In both scenarios, the firm forgoes opportunities for process-safety improvement and instead focuses on existing precautionary measures. Managerial implications: Our findings highlight the challenges in providing incentives for both reporting and precautionary measures that can result in a failure to leverage near miss information. We examine remedies that alleviate these issues and increase reporting in both voluntary and mandatory reporting environments.

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Can Brands Claim Ignorance? Unauthorized Subcontracting in Apparel Supply Chains

Cited by 13 publications

References 22 publications

Humanizing Research on Working Conditions in Supply Chains: Building a Path to Decent Work

Humanizing Research on Working Conditions in Supply Chains: Building a Path to Decent Work

Corporate codes of conduct and labour turnover in global apparel supply chains

Prevent or Report? Managing Near Misses for Safer Operations

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