Value distribution and markets for social justice in global value chains: Interdependence relationships and government policy

Abstract

Global value chains are highly prone to distortions in value distribution among participants. Their global fragmentation and relational governance undermine the effectiveness of regulatory intervention in amending these distortions. In this paper, I propose a new mechanism to administer value distribution that is in tune with the nature of these production systems. Building on interdependence theory, I suggest that interdependencies inherent in the cospecialized nature of supply chains give participants the power to alter the trade-offs between investment in social causes and economic gains and to incentivize socially desired behavior. I show how the interdependence logic manifests at varying levels of the GVC, including the producing constituencies, governments, and international organizations, as well as civil society. These dynamics create markets for social justice that are driven by relationships among GVC participants and operate simultaneously at different scales. I further posit that the effectiveness of interdependence relationships as a valuedistributing mechanism is socially-constructed and outline the social conditions that determine the outcomes. I specify the varying impact of governments on interdependence relationships-as activators, facilitators, or inhibitors of the transformative power of interdependencies-and discuss their effectiveness.

Income inequality, social cohesion, and crime against businesses: Evidence from a global sample of firms

“…For example, income inequality has been associated with a range of health indicators (e.g., obesity, cardiovascular diseases, and mental illnesses) whose effect on organizational performance have yet to be examined. Future research could reveal the ways in which organizations might be bearing part of the costs of unequal socioeconomic circumstances, just as societies often bear the cost of organizational externalities such as the lack of health coverage for employees (Wilkinson & Pickett, 2009), adoption of environmental standards (Bapuji et al, 2020), or skewed distribution of revenues via global value chains (Nachum, 2021).…”

Local, yet global: Implications of caste for MNEs and international business

“…Second, studying caste aligns with the increasing attention paid by IB scholars to rising socioeconomic inequalities (Doh, 2019;Nachum, 2021;Rygh, 2019), the role of firms in reproducing inequalities (Amis et al, 2020;Brandl et al, 2021;van der Straaten et al, 2020), and the implications of such inequalities for MNEs Lupton et al, 2020). By studying caste, insights can be developed about how MNEs can design their policies and practices so that they do not unwittingly reproduce societal inequalities in their own operations.…”

“…The relevance of caste for socioeconomic action is substantiated by organizational research, which indicates that caste has implications for a range of socioeconomic interactions, including CEO selection (Damaraju & Makhija, 2018), entrepreneurs' network formation intentions (Vissa, 2011), friendships among MBA students (Bhardwaj et al, 2021), venture capitalists' valuations (Claes & Vissa, 2020), and microfinance lending (Patel et al, 2020). Therefore, studying caste is important for IB scholarship given (i) the growing significance of caste to MNEs around the world (Zwick-Maitreyi et al, 2018), (ii) increasing attention by IB scholars to societal economic inequalities (Doh, 2019;Nachum, 2021;Rygh, 2019), and (iii) the practical relevance of caste to operate in South Asia and achieve inclusive growth (Alamgir et al, 2022). However, IB scholarship has yet to produce a stream of work with a clear focus on the implications of caste to MNE research and practice and IB policy.…”

Making sense of global value chain-oriented policies: The trifecta of tasks, linkages, and firms

“…Along the same lines, Nachum ( 2021 ) in this special collection states that to push social upgrading there is a need for interdependence of objectives between producing and consuming countries. The author presents a comparative case about the apparel industry in Bangladesh and Cambodia.…”