Improving work conditions in a global supply chain

MIT Sloan Management Review

Volumn 48, Issue 2, 2007, Pages

  Locke, Richard ^a,b   Romis, Monica ^c  

^a MASSACHUSETTS INSTITUTE OF TECHNOLOGY   (United States)

^b MASSACHUSETTS INSTITUTE OF TECHNOLOGY   (United States)

^c INTER AMERICAN DEVELOPMENT BANK   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

EID: 33846550652     PISSN: 15329194     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Review

References (28)

1. For recent reports on these conditions, see Verité Inc., "Excessive Overtime in Chinese Supplier Factories: Causes, Impacts, and Recommendations For Action," September 2004, www.verite.org/news/ Excessiveovertime; Clean Clothes Campaign, "Looking For a Quick Fix: How Weak Social Auditing Is Keeping Workers in Sweatshops," November 2005, www.cleanclothes.org/ftp/05-quick_fix.pdf; T. Connor and K. Dent, "Offside! Labor Rights and Sportswear Production in Asia," May 2006, www.oxfam.org/en/policy/briefingnotes/offside_labor_report/; and C. Kernaghan, National Labor Committee, "U.S. Jordan Free Trade Agreement Descends Into Human Trafficking and Involuntary Servitude," May 2006, www.nlcnet.org/live/admin/media/document/jordan.pdf.
2. L. Baccara, "Civil Society, NGOs and Decent Work Policies: Sorting Out the Issues," 2001, www.ilo.org/public/english/bureau/inst/download/ dp12701.pdf; and K.A. Elliott and R.B. Freeman, "Can Standards Improve Under Globalization?" (Washington, D.C.: Institute for International Economics, 2003).
3. For a good description of this movement, see E. J. Schrage, "Promoting International Worker Rights Through Private Voluntary Initiatives: Public Relations Or Public Policy?" January 2004, www.uiowa.edu/~uichr/publications/documents/gwri_report_000.pdf; and I. Mamic, "Implementing Codes of Conduct: How Businesses Manage Social Performance in Global Supply Chains" (Geneva: International Labor Office and Greenleaf Publishing, 2004).
4. For an interesting historical review of corporate codes of conduct and their evolution over time, see R. Jenkins, "Corporate Codes of Conduct: Self-Regulation in a Global Economy," April 2001, www.eldis.org/static/ DOC9199.htm. Another interesting historical parallel can be found in G.W. Seidman, "Monitoring Multinationals: Lessons From the Anti-Apartheid Era," Politics & Society 31, no. 3 (September 2003): 381-406.
5. J. Esbenshade, "Monitoring Sweatshops: Workers, Consumers and the Global Apparel Industry" (Philadelphia: Temple University Press, 2004).
6. K. Nadvi and F. Wältring, "Making Sense of Global Standards," chap. 3 in "Local Enterprises in the Global Economy: Issues of Governance and Upgrading," ed. H. Schmitz (Northampton, Massachusetts: Edward Elgar Publishing, 2004).
7. L. Petrecca and T. Howard, "Adidas-Reebok Merger Lets Rivals Nip At Mike's Heels," USA Today, Aug. 4, 2004.
8. Nike Inc., "FY04 Corporate Responsibility Report," www.nike.com/nikebiz/nikebiz.jhtml?page=29&item=fy04, 2-4.
9. Ibid., 3-4.
10. Detail about these events can be found in R.M. Locke, "The Promise and Perils of Globalization:The Case of Nike, Inc.," in "Management: Inventing and Delivering Its Future," ed. T.A. Kochan and R. Schmalensee (Cambridge, Massachusetts: MIT Press, 2003), 39-70.
11. For more on Nike's current compliance activities, see Nike Inc., "FY04," 15-48.
12. S. Zadek," The Path to Corporate Responsibility," Harvard Business Review 82 (December 2004): 125-132.
13. R.M. Locke, F. Qin and A. Brause, "Does Monitoring Improve Labor Standards?: Lessons From Nike," working paper 4612-06, MIT Sloan School of Management, Cambridge, Massachusetts, July 2006. In this companion paper, we analyzed data from factory audits, conducted between 1998 and 2005, of 800 suppliers located in 51 countries. We found that variation in working conditions among Nike's suppliers is related to country effects (the ability of the labor inspectorate to enforce labor laws and standards in the country in which the factory is located), factory characteristics (the age and size of the factory) and the relationship between Nike and the particular supplier. In addition we found that, notwithstanding Nike's very real interests in improving its image and the company's significant efforts and investments over the last decade to improve working conditions among its suppliers, these efforts have produced mixed results. While working conditions and labor rights have improved among some of Nike's suppliers, conditions have either remained stable or deteriorated among others.
14. The name of the state will remain anonymous in order to protect the identity of the plant.
15. Based on interviews with several senior compliance managers at Nike world headquarters, August 2005.
16. For more on the M-Audit and its scoring system, see Nike Inc., "Fy04," 35-36.
17. Based on Locke's examination of factory audit protocols of several global corporations and multistakeholder initiatives.
18. For a good, general description of lean manufacturing, see J.F. Krafcik, "Triumph of the Lean Production System," Sloan Management Review 30, no. 1 (fall 1988): 41-52.
19. In 1995, the owners expanded their plant with another building. They adopted a modular production system in the new structure in order to have a more flexible and shorter production cycle. However, in 2003, the owners of the factory attended a meeting with one of their global buyers and heard about lean manufacturing and its application in the footwear sector. They became interested and learned more about it. The following year, they decided to implement this new system in their plant. For more on the different systems of production in the apparel industry, see F.H. Abernathy, J.T. Dunlop, J.H. Hammond and D. Weil, "A Stitch in Time: Lean Retailing and the Transformation of Manufacturing - Lessons From the Apparel and Textile Industries" (New York: Oxford University Press, 1999); and J.T. Dunlop and D. Weil, "Diffusion and Performance of Modular Production in the U.S. Apparel Industry," Industrial Relations 35, no. 3 (July 1996): 334-355.
20. C. Ichniowski, T.A. Kochan, D.I. Levine, C.A. Olson and G. Strauss, "What Works At Work: Overview and Assessment," Industrial Relations 35, no. 3 (July 1996): 299-333; and P. Osterman, "How Common Is Workplace Transformation and Who Adopts It?," Industrial and Labor Relations Review 47, no. 2 (January 1994): 173-188.
21. For more on this system, see J. Knauss, "Modular Mass Production: High Performance On the Low Road," Politics & Society 26, no. 2 (June 1998): 273-296.
22. F. W. Taylor, "The Principles of Scientific Management" (1911; repr., New York: W.W. Norton & Company, 1967).
23. For more on this, see J.P. MacDuffie and J.F. Krafcik, "Integrating Technology and Human Resources For High-Performance Manufacturing: Evidence From the International Auto Industry," chap. 13 in "Transforming Organizations," ed. T.A. Kochan and M. Useem (New York Oxford University Press, 1992); and Knauss, "Modular Mass Production."
24. D.M. McGregor, "The Human Side of Enterprise" (NewYork: McGraw Hill, 1960).
25. M.S. Granovetter, "The Strength of Weak Ties," American Journal of Sociology 78, no. 6 (1973): 1360-1380; and R.M. Locke, "Remaking the Italian Economy" (Ithaca, New York: Cornell University Press, 1995).
26. S.J. Frenkel and D. Scott, "Compliance, Collaboration and Codes of Labor Practice: The Adidas Connection," California Management Review 45, no.1 (2002): 29-49.
27. For more on how trustlike relations are built, not inherited, see R.M. Locke, "Building Trust" (paper presented at Annual Meeting of the American Political Science Association, San Francisco, September 1, 2001)
28. For more on the evolution of these practices, see F. Dobbin and J.R. Sutton, "The Strength of a Weak State: The Rights Revolution and the Rise of Human Resources Management Divisions," American Journal of Sociology 104, no. 2 (September 1998): 441-476; and D. Weil, "If OSHA Is So Bad, Why Is Compliance So Good?" RAND Journal of Economics 27, no. 3 (autumn 1996): 618-640.