Social upgrading and cooperative corporate social responsibility in global value chains: the case of Fairphone in China

Abstract

In this article, we explore how a lead firm's strategy for corporate social responsibility influences the social upgrading of a supplier in a global value chain. Based on a single case study approach, we investigate the interaction between Dutch smartphone producer Fairphone and its Chinese supplier Guohong. On the one hand, the case illustrates how a cooperative approach to corporate social responsibility can lead to progress in suppliers' social upgrading. In particular, we highlight the role of a so‐called workers' welfare fund as a mechanism not only for improving measurable labour standards but also for enabling rights. On the other hand, the case demonstrates how the limited production and technological capabilities of the suppliers, a competitive market environment and lead firms' limited strategic access to the supply chain might constrain the extent of social upgrading through a cooperative approach towards corporate social responsibility in a global value chain.

Inviting Critical Political Economy to the Table

“…Then there is the question of how green these phones are, in terms of the Congolese rape and slavery that mine their components (Taylor 2011); the Chinese quasi-incarceration and exploitation that manufacture them; and the African, Latin American, and Asian informal sectors that riskily recycle them (Maxwell and Miller 2020). Not a lot of CSR in the lives of prominent cellphone companies (Jindra et al 2019).…”

Working Conditions in Global Value Chains: Evidence for European Employees

“…The governance within GVC, including social strategy of a leading firm, may be crucial for suppliers' social well-being. For instance, the evidence concerning mobile value chains (Jindra et al, 2019)…”

“…In particular, brokers (like sourcing agents) (Soundararajan et al, 2018), non-government organisations (Kaine and Josserand, 2018) or such institutions as the ILO (Thomas and Turnbull, 2018) may be relevant sources of pressure on the improvement of labour standards. Putting it differently, it is essential to understand under which conditions social upgrading may be possible, including the role of governance within a GVC (Jindra et al, 2019), governance at a local level and influence from non-state actors (Bair and Palpacuer, 2015; Gereffi and Lee, 2016).…”

“…The governance within GVC, including social strategy of a leading firm, may be crucial for suppliers’ social well-being. For instance, the evidence concerning mobile value chains (Jindra et al, 2019) confirms that the strategy of the leading firm has a great impact on social benefits (limits to overtime, health and safety regulations, or one-off bonuses) of the supplier.…”

Corporate social responsibility in long‐term supply chain management

“…Hsueh (2014) studied CSR improvement in a supply chain through a revenue‐sharing contract. From the perspective of conceptual framework development, Perry and Towers (2013) investigated CSR implementation in fashion supply chains. CSR management under the condition of supply chain globalization (Cruz, 2013; Jindra et al, 2019). For example, Hahn (2013) pointed out that multinational corporations and small and medium‐sized enterprises have different abilities to engage in extensive CSR management.…”