Drivers of Sub-Supplier Social Sustainability Compliance: An Emerging Economy Perspective

V.G. Venkatesh, A. Zhang, E. Deakins and V. Mani
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V.G. Venkatesh: Métis Lab EM Normandie - EM Normandie - École de Management de Normandie = EM Normandie Business School
A. Zhang: AUT - Auckland University of Technology
E. Deakins: Waikato Management School - Waikato University
V. Mani: Groupe Sup de Co Montpellier (GSCM) - Montpellier Business School

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Abstract: Purpose: Tragic incidents such as the Rana Plaza building collapse call into question the value and effectiveness of supplier codes of conduct (SCC) used in multi-tier supply chains. This paper aims to investigate the barriers to sub-supplier compliance and the drivers from the perspective of suppliers that adopt a double agency role by complying with buyer-imposed SCC while managing sub-supplier compliance on behalf of the buyer. Design/methodology/approach: This research adopts a sequential, mixed-methods approach. The qualitative phase develops a conceptual model with the aid of the extant the literature and semi-structured interviews with 24 senior manufacturing professionals. The quantitative phase then uses a hierarchical regression analysis to test the conceptual model using survey data from 159 apparel suppliers based in India. Findings: The findings reveal that sub-supplier compliance is positively impacted by effective buyer\textendashsupplier governance and by the focal supplier having a strategic partnership with the sub-supplier. Conversely, price pressure on sub-suppliers adversely impacts their compliance, while institutional pressure on them to comply is generally ineffective. Research limitations/implications: The context of the study is limited to the garment industry in India. Practical implications: To improve SCC compliance rates, buyers and focal suppliers should actively develop strategic partnerships with selected upstream supply chain actors; should set a reasonable price across the supply chain; and, should include specific sub-supplier compliance requirements within the supply contract. The findings also suggest the need to develop social sustainability protocols that are cognisant of regional contexts. Originality/value: The absence of prior research on SCC implementation by sub-suppliers, this study represents a pioneering empirical study into such multi-tier sourcing arrangements. It provides strong support that sub-supplier governance arrangements differ from those typically found in the focal supplier layer. It also provides empirical evidence of the critical factors that encourage sub-supplier compliance within the apparel industry of a regionally developing economy. © 2020, Emerald Publishing Limited.

Keywords: Empirical study; Garment industry; India; Suppliers; Sustainability (search for similar items in EconPapers)
Date: 2020
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Published in Supply Chain Management: An International Journal, 2020, 25 (6), pp.655-677. ⟨10.1108/SCM-07-2019-0251⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-04457145

DOI: 10.1108/SCM-07-2019-0251

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