Social sustainability in developing country suppliers

Abstract

Purpose

– The purpose of this paper is to investigate why developing country suppliers are adopting socially sustainable practices and how the implementation process is both impeded and enabled.

Design/methodology/approach

– A multi-case study approach is adopted based on four ready made garment (RMG) industry suppliers in Bangladesh and the Bangladeshi buying houses of two large UK retailers. The primary mode of data collection is exploratory face-to-face interviews with 14 senior representatives. Findings are later interpreted using the transaction cost economics (TCE) theory lens.

Findings

– One factor motivating implementation is labour retention – a skilled labour shortage means employees will migrate to other factories if suppliers do not improve certain social standards. Barriers to implementation include a misalignment between the requirements of western codes of conduct and the cultural and socio-economic context in Bangladesh. Enablers include a shift from auditing and monitoring to more open dialogue and trust between buyers and suppliers. The paper also reveals evidence of mock compliance, e.g. suppliers keeping two sets of timesheets, and of the complexities of social sustainability. For example, while some initiatives are unanimously positive, removing child labour from RMG industry suppliers has simply diverted it to other, less regulated and more hazardous industries such as construction.

Research limitations/implications

– An early, exploratory contribution is provided. The work could be extended, e.g. to other stakeholders such as third-party auditors and Non-Governmental Organisations (NGOs).

Practical implications

– Being aware of the motivations, barriers and enablers will help multi-national corporations (MNCs) promote good practice and anticipate the challenges they are likely to face in improving the social sustainability of their supply chains. Use of TCE leads to suggesting MNCs need to move beyond immediate suppliers and incorporate tier-two suppliers in implementation efforts.

Social implications

– Social sustainability improvements should benefit vulnerable workers, help suppliers develop longer term relationships with MNCs, and contribute to economic growth.

Originality/value

– Most prior studies have been in the context of developed countries and focused on the perspective of the buying firm only.