IDEAS home Printed from https://ideas.repec.org/a/kap/jbuset/v134y2016i1d10.1007_s10551-014-2418-y.html
   My bibliography  Save this article

Voluntary Governance Mechanisms in Global Supply Chains: Beyond CSR to a Stakeholder Utility Perspective

Author

Listed:
  • Vivek Soundararajan

    (University of Birmingham)

  • Jill A. Brown

    (Bentley University)

Abstract

Poor working conditions remain a serious problem in supplier facilities in developing countries. While previous research has explored this from the developed buyers’ side, we examine this phenomenon from the perspective of developing countries’ suppliers and subcontractors. Utilizing qualitative data from a major knitwear exporting cluster in India and a stakeholder management lens, we develop a framework that shows how the assumptions of conventional, buyer-driven voluntary governance break down in the dilution of buyer power and in the web of factors rooted in suppliers’ traditions, beliefs, local demands and resource dependency. We reveal out how success in governing collaborative global supply chains often falls short within the subcontracting stage, where a stakeholder management mindset is elusive to most participants. We suggest that success in governing collaborative global supply chains is dependent on concepts of stakeholder utility and the presence of shared value that is often at odds with the realities of power, information asymmetry and compliance/reward systems inherent in the non-market coordination of global supply chains. Our findings offer important insights for delineating the concepts of value creation from CSR concepts and practices, and for modifying the basic assumptions of conventional supply chain governance.

Suggested Citation

  • Vivek Soundararajan & Jill A. Brown, 2016. "Voluntary Governance Mechanisms in Global Supply Chains: Beyond CSR to a Stakeholder Utility Perspective," Journal of Business Ethics, Springer, vol. 134(1), pages 83-102, March.
    • Handle: RePEc:kap:jbuset:v:134:y:2016:i:1:d:10.1007_s10551-014-2418-y
    DOI: 10.1007/s10551-014-2418-y
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s10551-014-2418-y
    File Function: Abstract
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/s10551-014-2418-y?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Richard Welford & Stephen Frost, 2006. "Corporate social responsibility in Asian supply chains," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 13(3), pages 166-176, July.
    2. Valentina Mele & Donald Schepers, 2013. "E Pluribus Unum? Legitimacy Issues and Multi-stakeholder Codes of Conduct," Journal of Business Ethics, Springer, vol. 118(3), pages 561-576, December.
    3. Fulponi, Linda, 2006. "Private voluntary standards in the food system: The perspective of major food retailers in OECD countries," Food Policy, Elsevier, vol. 31(1), pages 1-13, February.
    4. Fara Azmat & Ramanie Samaratunge, 2009. "Responsible Entrepreneurship in Developing Countries: Understanding the Realities and Complexities," Journal of Business Ethics, Springer, vol. 90(3), pages 437-452, December.
    5. Suk-Jun Lim & Joe Phillips, 2008. "Embedding CSR Values: The Global Footwear Industry’s Evolving Governance Structure," Journal of Business Ethics, Springer, vol. 81(1), pages 143-156, August.
    6. Stephen Frost & Margaret Burnett, 2007. "Case study: the Apple iPod in China," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 14(2), pages 103-113, May.
    7. Gary S. Becker, 1974. "Crime and Punishment: An Economic Approach," NBER Chapters, in: Essays in the Economics of Crime and Punishment, pages 1-54, National Bureau of Economic Research, Inc.
    8. Günseli Berik & Yana Van Der Meulen Rodgers, 2010. "Options for enforcing labour standards: Lessons from Bangladesh And Cambodia," Journal of International Development, John Wiley & Sons, Ltd., vol. 22(1), pages 56-85.
    9. Adam Lindgreen & José-Rodrigo Córdoba & François Maon & José Mendoza, 2010. "Corporate Social Responsibility in Colombia: Making Sense of Social Strategies," Journal of Business Ethics, Springer, vol. 91(2), pages 229-242, February.
    10. Abbott, Kenneth W. & Snidal, Duncan, 2000. "Hard and Soft Law in International Governance," International Organization, Cambridge University Press, vol. 54(3), pages 421-456, July.
    11. Thomas Beschorner & Martin Müller, 2007. "Social Standards: Toward an Active Ethical Involvement of Businesses in Developing Countries," Journal of Business Ethics, Springer, vol. 73(1), pages 11-20, June.
    12. Stigzelius, Ingrid & Mark-Herbert, Cecilia, 2009. "Tailoring corporate responsibility to suppliers: Managing SA8000 in Indian garment manufacturing," Scandinavian Journal of Management, Elsevier, vol. 25(1), pages 46-56, March.
    13. Jensen, Michael C. & Meckling, William H., 1976. "Theory of the firm: Managerial behavior, agency costs and ownership structure," Journal of Financial Economics, Elsevier, vol. 3(4), pages 305-360, October.
    14. David Detomasi, 2007. "The Multinational Corporation and Global Governance: Modelling Global Public Policy Networks," Journal of Business Ethics, Springer, vol. 71(3), pages 321-334, March.
    15. Dubbink, G.W. & Graafland, J.J. & Liederkerke, L., 2008. "CSR: Transparency and the role of intermediate organisations," MPRA Paper 17892, University Library of Munich, Germany.
    16. Kenneth M. Amaeshi & Onyeka K. Osuji & Paul Nnodim, 2008. "Corporate Social Responsibility in Supply Chains of Global Brands: A Boundaryless Responsibility? Clarifications, Exceptions and Implications," Journal of Business Ethics, Springer, vol. 81(1), pages 223-234, August.
    17. Wilfried Luetkenhorst, 2004. "Corporate social responsibility and the development agenda," Intereconomics: Review of European Economic Policy, Springer;ZBW - Leibniz Information Centre for Economics;Centre for European Policy Studies (CEPS), vol. 39(3), pages 157-166, May.
    18. Khalid Nadvi & John T. Thoburn & Bui Tat Thang & Nguyen Thi Thanh Ha & Nguyen Thi Hoa & Dao Hong Le & Enrique Blanco De Armas, 2004. "Vietnam in the global garment and textile value chain: impacts on firms and workers," Journal of International Development, John Wiley & Sons, Ltd., vol. 16(1), pages 111-123.
    19. Locke, Richard M. & Qin, Fei & Brause, Alberto, 2007. "Does monitoring improve labor standards? Lessons from Nike," LSE Research Online Documents on Economics 59405, London School of Economics and Political Science, LSE Library.
    20. Djankov, Simeon & Ramalho, Rita, 2009. "Employment laws in developing countries," Journal of Comparative Economics, Elsevier, vol. 37(1), pages 3-13, March.
    21. Spence, Laura & Bourlakis, Michael, 2009. "Moving from Corporate Social Responsibility to Supply Chain Responsibility: The Case of a Leading UK Food Retailer," 2009 International European Forum, February 15-20, 2009, Innsbruck-Igls, Austria 59204, International European Forum on System Dynamics and Innovation in Food Networks.
    22. Harrison, Jeffrey S. & Wicks, Andrew C., 2013. "Stakeholder Theory, Value, and Firm Performance," Business Ethics Quarterly, Cambridge University Press, vol. 23(1), pages 97-124, January.
    23. Thomas I. Palley, 2005. "Labour standards, democracy and wages: some cross-country evidence," Journal of International Development, John Wiley & Sons, Ltd., vol. 17(7), pages 883-898.
    24. Stefan Gold & Stefan Seuring & Philip Beske, 2010. "Sustainable supply chain management and inter‐organizational resources: a literature review," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 17(4), pages 230-245, July.
    25. Peter Lund‐Thomsen & Khalid Nadvi, 2010. "Global value chains, local collective action and corporate social responsibility: a review of empirical evidence," Business Strategy and the Environment, Wiley Blackwell, vol. 19(1), pages 1-13, January.
    26. Carr, Marilyn. & Chen, Martha Alter., 2002. "Globalization and the informal economy : how global trade and investment impact on the working poor," ILO Working Papers 993541723402676, International Labour Organization.
    27. R. Kaplinsky, 2000. "Globalisation and Unequalisation: What Can Be Learned from Value Chain Analysis?," Journal of Development Studies, Taylor & Francis Journals, vol. 37(2), pages 117-146.
    28. Richard M. Locke & Fei Qin & Alberto Brause, 2007. "Does Monitoring Improve Labor Standards? Lessons from Nike," ILR Review, Cornell University, ILR School, vol. 61(1), pages 3-31, October.
    29. Baden, D.A. & Harwood, I.A. & Woodward, D.G., 2009. "The effect of buyer pressure on suppliers in SMEs to demonstrate CSR practices: An added incentive or counter productive?," European Management Journal, Elsevier, vol. 27(6), pages 429-441, December.
    30. Martin Mueller & Virginia dos Santos & Stefan Seuring, 2009. "The Contribution of Environmental and Social Standards Towards Ensuring Legitimacy in Supply Chain Governance," Journal of Business Ethics, Springer, vol. 89(4), pages 509-523, November.
    31. Antonio Tencati & Laszlo Zsolnai, 2009. "The Collaborative Enterprise," Journal of Business Ethics, Springer, vol. 85(3), pages 367-376, March.
    32. Mena, Sébastien & Palazzo, Guido, 2012. "Input and Output Legitimacy of Multi-Stakeholder Initiatives," Business Ethics Quarterly, Cambridge University Press, vol. 22(3), pages 527-556, July.
    33. Paolo Perego & Ans Kolk, 2012. "Multinationals’ Accountability on Sustainability: The Evolution of Third-party Assurance of Sustainability Reports," Journal of Business Ethics, Springer, vol. 110(2), pages 173-190, October.
    34. Richard LOCKE & Thomas KOCHAN & Monica ROMIS & Fei QIN, 2007. "Beyond corporate codes of conduct: Work organization and labour standards at Nike's suppliers," International Labour Review, International Labour Organization, vol. 146(1-2), pages 21-40, March.
    35. Muhammad Azizul Islam & Craig Deegan, 2008. "Motivations for an organisation within a developing country to report social responsibility information," Accounting, Auditing & Accountability Journal, Emerald Group Publishing Limited, vol. 21(6), pages 850-874, August.
    36. repec:ilo:ilowps:354172 is not listed on IDEAS
    37. Michael Maloni & Michael Brown, 2006. "Corporate Social Responsibility in the Supply Chain: An Application in the Food Industry," Journal of Business Ethics, Springer, vol. 68(1), pages 35-52, September.
    38. Verwaal, Ernst & Hesselmans, Maurice, 2004. "Drivers of Supply Network Governance:: An Explorative Study of the Dutch Chemical Industry," European Management Journal, Elsevier, vol. 22(4), pages 442-451, August.
    39. Gilbert, Dirk Ulrich & Rasche, Andreas & Waddock, Sandra, 2011. "Accountability in a Global Economy: The Emergence of International Accountability Standards," Business Ethics Quarterly, Cambridge University Press, vol. 21(1), pages 23-44, January.
    40. Patricia Werhane, 2008. "Mental Models, Moral Imagination and System Thinking in the Age of Globalization," Journal of Business Ethics, Springer, vol. 78(3), pages 463-474, March.
    41. Matthew Drake & John Schlachter, 2008. "A Virtue-Ethics Analysis of Supply Chain Collaboration," Journal of Business Ethics, Springer, vol. 82(4), pages 851-864, November.
    42. Richard Locke & Matthew Amengual & Akshay Mangla, 2009. "Virtue out of Necessity? Compliance, Commitment, and the Improvement of Labor Conditions in Global Supply Chains," Politics & Society, , vol. 37(3), pages 319-351, September.
    43. Muel Kaptein & Mark Schwartz, 2008. "The Effectiveness of Business Codes: A Critical Examination of Existing Studies and the Development of an Integrated Research Model," Journal of Business Ethics, Springer, vol. 77(2), pages 111-127, January.
    44. Tom Fox, 2004. "Corporate Social Responsibility and Development: In quest of an agenda," Development, Palgrave Macmillan;Society for International Deveopment, vol. 47(3), pages 29-36, September.
    45. Betsy Stevens, 2008. "Corporate Ethical Codes: Effective Instruments For Influencing Behavior," Journal of Business Ethics, Springer, vol. 78(4), pages 601-609, April.
    46. Douglas A. Bosse & Robert A. Phillips & Jeffrey S. Harrison, 2009. "Stakeholders, reciprocity, and firm performance," Strategic Management Journal, Wiley Blackwell, vol. 30(4), pages 447-456, April.
    47. Bin Jiang, 2009. "Implementing Supplier Codes of Conduct in Global Supply Chains: Process Explanations from Theoretic and Empirical Perspectives," Journal of Business Ethics, Springer, vol. 85(1), pages 77-92, March.
    48. Clodia Vurro & Angeloantonio Russo & Francesco Perrini, 2009. "Shaping Sustainable Value Chains: Network Determinants of Supply Chain Governance Models," Journal of Business Ethics, Springer, vol. 90(4), pages 607-621, December.
    49. Khalid Nadvi, 2008. "Global standards, global governance and the organization of global value chains," Journal of Economic Geography, Oxford University Press, vol. 8(3), pages 323-343, May.
    50. Michelle Amazeen, 2011. "Gap (RED): Social Responsibility Campaign or Window Dressing?," Journal of Business Ethics, Springer, vol. 99(2), pages 167-182, March.
    51. Riisgaard, Lone, 2009. "Global Value Chains, Labor Organization and Private Social Standards: Lessons from East African Cut Flower Industries," World Development, Elsevier, vol. 37(2), pages 326-340, February.
    52. Jeffrey S. Harrison & Douglas A. Bosse & Robert A. Phillips, 2010. "Managing for stakeholders, stakeholder utility functions, and competitive advantage," Strategic Management Journal, Wiley Blackwell, vol. 31(1), pages 58-74, January.
    53. Gereffi, Gary, 1999. "International trade and industrial upgrading in the apparel commodity chain," Journal of International Economics, Elsevier, vol. 48(1), pages 37-70, June.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Sadaat Ali Yawar & Stefan Seuring, 2017. "Management of Social Issues in Supply Chains: A Literature Review Exploring Social Issues, Actions and Performance Outcomes," Journal of Business Ethics, Springer, vol. 141(3), pages 621-643, March.
    2. Venkatesh, V.G. & Zhang, Abraham & Deakins, Eric & Mani, Venkatesh, 2021. "Antecedents of social sustainability noncompliance in the Indian apparel sector," International Journal of Production Economics, Elsevier, vol. 234(C).
    3. Aurélien Acquier & Bertrand Valiorgue & Thibault Daudigeos, 2017. "Sharing the Shared Value: A Transaction Cost Perspective on Strategic CSR Policies in Global Value Chains," Journal of Business Ethics, Springer, vol. 144(1), pages 139-152, August.
    4. Nick Lin-Hi & Igor Blumberg, 2017. "The Power(lessness) of Industry Self-regulation to Promote Responsible Labor Standards: Insights from the Chinese Toy Industry," Journal of Business Ethics, Springer, vol. 143(4), pages 789-805, July.
    5. Mia Mahmudur Rahim, 2017. "Improving Social Responsibility in RMG Industries Through a New Governance Approach in Laws," Journal of Business Ethics, Springer, vol. 143(4), pages 807-826, July.
    6. Niklas Egels-Zandén, 2014. "Revisiting Supplier Compliance with MNC Codes of Conduct: Recoupling Policy and Practice at Chinese Toy Suppliers," Journal of Business Ethics, Springer, vol. 119(1), pages 59-75, January.
    7. Christina Niforou, 2015. "Labour Leverage in Global Value Chains: The Role of Interdependencies and Multi-level Dynamics," Journal of Business Ethics, Springer, vol. 130(2), pages 301-311, August.
    8. Clodia Vurro & Angeloantonio Russo & Francesco Perrini, 2009. "Shaping Sustainable Value Chains: Network Determinants of Supply Chain Governance Models," Journal of Business Ethics, Springer, vol. 90(4), pages 607-621, December.
    9. Cristina Gimenez & Vicenta Sierra, 2013. "Sustainable Supply Chains: Governance Mechanisms to Greening Suppliers," Journal of Business Ethics, Springer, vol. 116(1), pages 189-203, August.
    10. Deniz Köksal & Jochen Strähle & Martin Müller, 2018. "Social Sustainability in Apparel Supply Chains—The Role of the Sourcing Intermediary in a Developing Country," Sustainability, MDPI, vol. 10(4), pages 1-35, March.
    11. Oguz Morali & Cory Searcy, 2013. "A Review of Sustainable Supply Chain Management Practices in Canada," Journal of Business Ethics, Springer, vol. 117(3), pages 635-658, October.
    12. Dong Hoang, 2019. "Labour Standards in the Global Supply Chain: Workers’ Agency and Reciprocal Exchange Perspective," Societies, MDPI, vol. 9(2), pages 1-25, May.
    13. Constantin Blome & Antony Paulraj, 2013. "Ethical Climate and Purchasing Social Responsibility: A Benevolence Focus," Journal of Business Ethics, Springer, vol. 116(3), pages 567-585, September.
    14. Sartor, Marco & Orzes, Guido & Di Mauro, Carmela & Ebrahimpour, Maling & Nassimbeni, Guido, 2016. "The SA8000 social certification standard: Literature review and theory-based research agenda," International Journal of Production Economics, Elsevier, vol. 175(C), pages 164-181.
    15. Stephanie Schrage & Dirk Ulrich Gilbert, 2021. "Addressing Governance Gaps in Global Value Chains: Introducing a Systematic Typology," Journal of Business Ethics, Springer, vol. 170(4), pages 657-672, May.
    16. Thomas Clarke & Martijn Boersma, 2017. "The Governance of Global Value Chains: Unresolved Human Rights, Environmental and Ethical Dilemmas in the Apple Supply Chain," Journal of Business Ethics, Springer, vol. 143(1), pages 111-131, June.
    17. Fu Jia & Yan Jiang, 2018. "Sustainable Global Sourcing: A Systematic Literature Review and Bibliometric Analysis," Sustainability, MDPI, vol. 10(3), pages 1-26, February.
    18. Francesco Perrini & Angeloantonio Russo & Antonio Tencati & Clodia Vurro, 2011. "Deconstructing the Relationship Between Corporate Social and Financial Performance," Journal of Business Ethics, Springer, vol. 102(1), pages 59-76, March.
    19. Fahian Anisul Huq & Mark Stevenson, 2020. "Implementing Socially Sustainable Practices in Challenging Institutional Contexts: Building Theory from Seven Developing Country Supplier Cases," Journal of Business Ethics, Springer, vol. 161(2), pages 415-442, January.
    20. Robert C. Bird & Vivek Soundararajan, 2020. "The Role of Precontractual Signals in Creating Sustainable Global Supply Chains," Journal of Business Ethics, Springer, vol. 164(1), pages 81-94, June.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:jbuset:v:134:y:2016:i:1:d:10.1007_s10551-014-2418-y. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.