Labor standard compliance and the role of buyers: the case of the Cambodian garment sector

This dissertation consists of four chapters investigating the role of buyers in regulating suppliers' compliance with labor standards in the Cambodian garment sector. The first chapter evaluates an innovative monitoring scheme of the International Labour Organization (ILO) in the Cambodian garment sector, Better Factories Cambodia (BFC). The findings suggest that monitoring standards and procedures are rigorous and positive impacts are felt in monitored factories. Nonetheless, BFC runs in parallel to state institutions and enforcement depends on buyers, throwing its sustainability into question. The second chapter examines the effects of 'reputation-conscious buyers' on labor standard compliance in supplier facilities. Using unique factory-level panel data, this chapter shows that factories producing for reputation-conscious buyers are associated with higher compliance levels than other factories, controlling for factory characteristics. Field interviews also demonstrate that reputation-conscious buyers regulate supplier compliance both 'reactively' and 'proactively.' The third chapter explores the determinants of labor standard compliance across different issue categories (i.e. contract, wage, hours, leave, welfare, occupational safety and health, fundamental rights). Suppliers of reputation-conscious buyers are consistently associated with better compliance levels across many different issue categories including fundamental rights. The result lends support to the behavioral theory rather than the deterrence theory of regulatory compliance and challenges claims that buyer-driven regulation produces effects that are confined only to visible and easyto-fix issues. The fourth chapter exploits original survey data and examines different channels through which buyers influence their supplier compliance. The findings suggest that the main channel linking buyers and supplier compliance-performance is the nature of their relationships: market-based relationships mediated through agents are systematically associated with poorer compliance performance than established relationships. The result suggests the need to develop longer-term buyer-supplier relationships marked by open dialogue, trust, and commitment, which in turn help to foster an environment supportive of continuous improvement in working conditions

Channels of buyer influence and labour standard compliance: the case of Cambodia's garment sector

International audienceGiven the continued growth in the globalization of production, working conditions in global supply chains have come under increased scrutiny. Although there has been much debate about corporate codes of conduct and monitoring procedures, the question of how buyers influence their suppliers' working conditions at the factory level remains poorly understood. Using a unique data set based on monitoring by the International Labour Organization (ILO) and original survey data collected in Cambodia's garment sector, this study shows that the main channel linking buyers and supplier compliance performance is the nature of their relationships. Market-based relationships mediated through sourcing agents are systematically associated with poorer compliance performance. In particular, when a reputation-conscious buyer is sourcing from a factory, it has a positive effect on compliance, and their presence appears to condition relationship variables. Deterrence and learning channels are not supported by the evidence. The findings signal the need to pay more attention to the nature of buyer-supplier relationships if we seek to improve labor standard compliance. Market-based relationships 153 motivate neither buyers nor suppliers to invest their time and resources to tackle the root causes of poor working conditions. Rather, the results here indicate the need to develop collaborative relationships marked by open dialogue, trust, and commitment, which in turn help to foster an environment supportive of continuous improvement in working conditions

Tensions in the strategic integration of corporate sustainability through global standards:Evidence from Japan and South Korea

International audienceDespite the importance of the conflicting dimensions of corporate sustainability for business strategy, little is known about the tensions that derive from adopting global environmental and social standards in East Asia. Through 65 in-depth interviews conducted in Tokyo and Seoul, this article examines the tensions—and reactions to these tensions—of corporate sustainability managers tasked with the implementation of such standards in Japanese and South Korean multinational corporations. These represent key contexts of inquiry because of their normative tradition of corporate sustainability and geographical closeness. While elucidating that corporate sustainability managers in both countries encounter societal-commercial, traditional-modern, and individual-collective tensions, the article describes the ways they react differently to these tensions. This article contributes to the literature on corporate sustainability and tensions and the contextual literature on corporate sustainability in Japan and South Korea, ultimately offering takeaways for the strategic planning of multinational corporations

Spillover Effects Across Transnational Industrial Relations Agreements:The Potential and Limits of Collective Action in Global Supply Chains

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

Accounting for the gaps in labour standard compliance: the role of reputation-conscious buyers in the Cambodian garment industry

Working conditions in global supply chains have come under increased public scrutiny. Faced with this growing demand for accountability, some multinational enterprises have come to play regulatory roles in developing countries where they do business. This article combines quantitative and qualitative methods to examine the effects of reputation-conscious buyers on supplier labour standard compliance in the Cambodian garment sector. Using unique factory-level panel data, this article shows that factories producing for reputation-conscious buyers are associated with better compliance levels than other factories, controlling for factory characteristics. Field-based interviews also demonstrate that reputation-conscious buyers regulate supplier compliance both ‘reactively’ and ‘proactively.’ The findings shed light on the opportunities and limits of buyer-driven regulation