Improving Working Conditions in Global Supply Chains: The Role of Institutional Environments and Monitoring Program Design

Abstract

<jats:p> Activism seeking to improve labor conditions in global supply chains has led many transnational corporations to adopt codes of conduct and to monitor suppliers for compliance. Drawing on thousands of audits conducted by a major social auditor, the authors identify structural contingencies in the institutional environment and program design under which codes and monitoring are more likely to be associated with improvements in conditions. At the institutional level, suppliers improve more when they face greater risk that nongovernmental organizations and the press will expose harmful working conditions. They also improve more when their buyers have experienced negative publicity for supply chain labor abuses. At the program design level, suppliers improve more on average when audits are pre-announced, when auditors are highly trained, and especially when both elements are present. Extended analysis of variations across violation types reveals nuances to these findings. For instance, pre-announced audits were followed by greater improvement in occupational safety and health practices but not child labor practices. These findings can inform strategies for improving supply chain working conditions. </jats:p>

The Ineffectiveness of CSR: Understanding Garment Company Commitments to Living Wages in Global Supply Chains

“…A large interdisciplinary literature split across management and business studies, law, political science and other disciplines focuses on CSR's positive potential, seeing corporate engagement with stakeholders as a key site for 'deliberative democracy' (Scherer and Palazzo 2007) and a means of reorienting corporations beyond their shareholders and narrow financial interests (Schoeneborn et al 2020). This literature tends to conceptualise CSR initiatives as a positive or neutral force within global governance, explaining any lacking progress as relating to procedure, design, or technical considerations that can be rectified (Short et al 2020).…”

Corporate labour standards and work quality: insights from the agro-export sector of Guanajuato, Central Mexico

“…Distelhorst et al (2015), amongst others, show that compliance with corporate labour standards is often better in countries that have stronger national labour law enforcement. Another important factor that has proven to support improvements on the side of suppliers are a relatively free press, a denser NGO network and openness regarding factory-level assessments through which civil society can monitor compliance (Robertson 2020;Short, Toffel, and Hugill 2020). While not legally binding, compliance with these corporate labour standards has increasingly become an important condition for suppliers to gain and maintain access to global markets (Auret and Barrientos 2004;Donaghey et al 2014).…”

“…Several studies point to the continued need for institutional change aimed at making private regulation work better. One important element in bringing this about is the ability of civil society to expose labour standard violations (Short, Toffel, and Hugill 2020). Other elements include institutional changes at different scales (from local to global) (Bair, Anner, and Blasi 2020), and broader collaboration among buyers and brands to ensure consistency in compliance along the supply chain (Kuruvilla et al 2020).…”

Editorial Essay: Introduction to a Special Issue on Improving Private Regulation of Labor in Global Supply Chains: Theory and Evidence

“…Jodi Short, Michael Toffel, and Andrea Hugill’s (this volume) contribution also takes a theoretical perspective that highlights the role of decoupling policies and outcomes. They ask which factors reduce decoupling by tracking the improvement in suppliers’ compliance with labor standards.…”