Responsibility Boundaries in Global Value Chains: Supplier Audit Prioritizations and Moral Disengagement Among Swedish Firms

To address substandard working conditions in global value chains, companies have adopted private regulatory systems governing worker rights. Scholars agree that without onsite factory audits, this private regulation has limited impact at the point of production. Companies, however, audit only a subset of their suppliers, severely restricting their private regulatory attempts. Despite the significance of the placement of suppliers inside or outside firms’ “responsibility boundaries” and despite scholars’ having called for more research into how firms prioritize what suppliers to audit, few, if any, systematic studies have examined the topic. This is problematic, as the placement of firms’ responsibility boundaries determines what suppliers and workers are included in firms’ private regulatory attempts. Based on a study of 12 Swedish firms and the theory of moral disengagement, this paper starts to fill this research gap by exploring how firms’ responsibility boundaries are placed. The paper illustrates how firms’ responsibility boundary placement is best described as a patchwork with firms defining and delimiting their responsibilities differently. The paper also demonstrates that three supplier types (i.e., the worst, morally justified, and immediate suppliers) are particularly likely to be placed inside firms’ responsibility boundaries, while a fourth type (i.e., disregarded suppliers) is likely be placed outside.