ILR Review: Special Issue, August 2020
The New Conversations Project organized a special issue of the journal ILR Review for August 2020 with new research findings on sustainable labor practices in global supply chains. You can read the papers below.
Field Opacity and Practice-Outcome Decoupling: Private Regulation of Labor Standards in Global Supply Chains
Sarosh Kuruvilla, Mingwei Liu, Chunyun Li, Wansi Chen
Although firms in diverse industries increasingly adopt private regulation of labor standards for workers in their global supply chains, growing scholarly evidence suggests that this approach has not generated sustainable improvements in working conditions for those workers. The authors draw on recent developments in institutional theory regarding the development of opaque institutional fields that cause the decoupling between practices and outcomes to develop a new explanation for the lack of sustainable improvement in labor practices in supply chains. Using qualitative and quantitative data from a global apparel supplier and a global home products retailer, they demonstrate the various ways in which opacity causes decoupling between private regulation practices of global firms and outcomes for workers in supply chains.
Spillover Effects across Transnational Industrial Relations Agreements: The Potential and Limits of Collective Action in Global Supply Chains
Sarah Ashwin, Chikako Oka, Elke Schuessler, Rachel Alexander, Nora Lohmeyer
Using qualitative data from interviews with multiple respondents in 45 garment brands and retailers, as well as respondents from unions and other stakeholders, the authors analyze the emergence of the Action Collaboration Transformation (ACT) living wages initiative. They ask how the inter-firm coordination and firm–union cooperation demanded by a multi-firm transnational industrial relations agreement (TIRA) developed. Synthesizing insights from the industrial relations and private governance literatures along with recent collective action theory, they identify a new pathway for the emergence of multi-firm TIRAs based on common group understandings, positive experiences of interaction, and trust. The central finding is that existing union-inclusive governance initiatives provided a platform from which spillover effects developed, facilitating the formation of new TIRAs. The authors contribute a new mapping of labor governance approaches on the dimensions of inter-firm coordination and labor inclusiveness, foregrounding socialization dynamics as a basis for collective action and problematizing the limited scalability of this mode of institutional emergence.
Global Purchasing as Labor Regulation: The Missing Middle
Matthew Amengual, Greg Distelhorst, Danny Tobin
Do purchasing practices support or undermine the regulation of labor standards in global supply chains? This study offers the first analysis of the full range of supply chain regulatory efforts, integrating records of factory labor audits with purchase order microdata. Studying an apparel and equipment retailer with a strong reputation for addressing labor conditions in its suppliers, the authors show that the retailer persuaded factories to improve and terminated factories with poor labor compliance. However, the authors also find that purchase orders did not increase when labor standards improved. If anything, factories whose standards worsened tended to see their orders increase. Contrary to the conventional wisdom, this “missing middle” in incentives for compliance appears unrelated to any cost advantage of noncompliant factories. Instead, lack of flexibility in supplier relationships created obstacles to reallocating orders in response to compliance findings.
Lights On: How Transparency Increases Compliance in Cambodian Global Value Chains
This article evaluates the implementation of a transparency policy in garment factories in Cambodia through the Better Factories Cambodia program. Using a difference-in-difference approach that is often applied to control for endogeneity, the author finds that compliance improved following the implementation of the transparency policy. Compliance increased in a group of 21 critical compliance areas that represent fundamental worker rights relative to relevant comparison groups. Compliance among the least-compliant factories, however, did not increase relative to other factories, possibly reflecting limited access to resources.
The Political Economy of Private and Public Regulation in Post-Rana Plaza Bangladesh
Jennifer Bair, Mark Anner, and Jeremy Blasi
How do labor governance regimes intersect in global supply chains and with what effects? Based on fieldwork in Bangladesh that included interviews with garment industry stakeholders, the authors examine the main public and private regulatory reforms instituted in post-Rana Plaza Bangladesh: the Sustainability Compact and the Bangladesh Accord, respectively. Despite the Accord’s substantial achievements in improving workplace safety, particularly relative to the progress achieved under the Sustainability Compact, findings show that government and industry actors in Bangladesh have resisted the Accord’s efforts to empower workers for fear that improved labor standards would threaten managerial control over one of the global garment industry’s largest and cheapest labor forces. Rather than an example of complementarity between private and public governance, or an effective substitution of one by the other, post-Rana Plaza Bangladesh represents an undermining of effective private regulation by a state opposed to pro-labor reforms.
Improving Working Conditions in Global Supply Chains
Jodi L. Short, Michael W. Toffel, Andrea R. Hugill
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 and 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.
Voice in Supply Chains: Does the Better Work Program Lead to Improvements in Labor Standards Compliance?
This article examines whether the ILO’s Better Work initiative leads to improvements in labor standards compliance, through a six-year study of Better Work Lesotho (BWL). Data include 55 focus group discussions conducted with 426 workers during four waves of data collection between 2011 and 2017. In-depth qualitative research with workers before, during, and after BWL reveals the root causes underlying noncompliance. Findings indicate that improvements across a number of compliance areas are enabled by collective worker voice mechanisms established by BWL at the factory level. Workers also highlight additional positive impacts of these improvements beyond the workplace. The author concludes that worker voice is essential to long-term sustainable improvements in labor standards compliance. This study makes an empirical and a methodological contribution by demonstrating the importance of worker voice in both the implementation of Better Work and its evaluation and impact.