Does Monitoring Improve Labor Standards?: Lessons from Nike (original) (raw)
Related papers
Beyond corporate codes of conduct: Work organization and labour standards at Nike's suppliers
International Labour Review, 2007
This paper presents a matched pair case study of two factories supplying Nike, the world's largest athletic footwear and apparel company. These two factories have many similarities-both are in Mexico, both are in the apparel industry, both produce more or less the same products for Nike (and other brands) and both are subject to the same code of conduct. On the surface, both factories appear to have similar employment (i.e., recruitment, training, remuneration) practices and they receive comparable scores when audited by Nike's compliance staff. However, underlying (and somewhat obscured by) these apparent similarities, significant differences in actual labor conditions exist between these two factories. What drives these differences in working conditions? What does this imply for traditional systems of monitoring and codes of conduct? Field research conducted at these two factories reveals that beyond the code of conduct and various monitoring efforts aimed at enforcing it, workplace conditions and labor standards are shaped by very different patterns of work organization and human resource management policies.
The Limits of Voluntary Governance Programs: Auditing Labor Rights in the Global Apparel Industry
2011
Corporations have increasingly turned to voluntary, multi-stakeholder governance programs to monitor workers' rights and standards in the global apparel industry. While much has been written on whether, in general terms, these Corporate Social Responsibility (CSR) programs are or are not effective, the literature has not fully explored under what conditions these programs fail and succeed. This paper argues that CSR effectiveness varies significantly depending on stakeholder involvement and issue areas under examination. Corporateinfluenced programs can be effective in detecting and remediating minimum wage, hour, and occupational safety and health violations because addressing these issues provides corporations with legitimacy and reduces the risks of uncertainty created by activist campaigns. Corporate-influenced programs, however, are less effective in ensuring workers' right to form unions, bargain, and strike because these rights are perceived as lessening managerial control. I explore this argument by first contrasting corporate and labor-influenced programs, and then analyzing 730 factory audits of the Fair Labor Association between 2002 and 2009. This analysis is complemented with a case study of Russell Athletic in Honduras. Since the 1990s, there has been a considerable shift toward voluntary, multi-stakeholder governance mechanisms to monitor compliance with labor standards and rights in the global economy (Fung et al. 2001; 2007; Rodríguez-Garavito 2005; Seidman 2007). These-Corporate Social Responsibility‖ (CSR) initiatives are a response to new challenges presented by economic globalization, notably corporate efforts to oversee the operations of increasingly-complex global supply chains. As media exposés and social movement activists highlight extreme labor abuses in factories producing for well-known global brands, corporations have been pushed to monitor their employment relations practices through multi-stakeholder programs. 1 The author thanks Dong Fang and Katherine Cornejo for their research assistance in coding FLA factory audits.
This book chapter considers the potential of corporate labour practice codes of conduct and their associated processes for monitoring and enforcement to advance the protection of trade union rights, taking as a case study the three codes which most strongly intersect with the debate on Nike Inc.'s labour practices: Nike's own code, the Fair Labor Association's code and the code of the Worker Rights Consortium. While only a minority of companies have adopted such codes, and even fewer have monitoring systems in place to ensure adherence, corporations like Nike are finding that a growing global civil society movement is in no mood to allow credibility with regard to labour rights and other social issues to be easily bought. Equally, activists are encountering strong resistance to independent and rigourous monitoring of corporate labour practices
British Journal of Industrial Relations, 2007
Concern over global labour standards has led to a profusion of nongovernmental forms of regulation. Systematic evaluation of these systems has been very limited to date. This article empirically explores an innovative system to regulate labour standards in the US garment industry combining public enforcement power and private monitoring, thereby drawing on different elements of global labour standards systems. We examine the impact of this system over time and in two distinct markets on employer compliance with minimum wage laws and find that these initiatives are associated with substantial reductions in minimum wage violations. The system therefore offers a useful model for international labour standards regulatory systems.
2009
Private, voluntary compliance programs, promoted by global corporations and nongovernmental organizations alike, have produced only modest and uneven improvements in working conditions and labor rights in most global supply chains. Through a detailed study of a major global apparel company and its suppliers, this article argues that this compliance model rests on misguided theoretical and empirical assumptions concerning the power of multinational corporations in global supply chains, the role information (derived from factory audits) plays in shaping the behavior of key actors (e.g., global brands, transnational activist networks, suppliers, purchasing agents, etc.) in these production networks, and the appropriate incentives required to change behavior and promote improvements in labor standards in these emergent centers of global production. The authors argue that it is precisely these faulty assumptions and the way they have come to shape various labor compliance initiatives throughout the world-even more than a lack of commitment, resources, or transparency by global brands and their suppliers to these programs-that explain why this compliance-focused model of private voluntary regulation has not succeeded. In contrast, this article documents that a more commitment-oriented approach to improving labor standards coexists and, in many of the same factories, complements the traditional compliance model. This commitment-oriented approach, based on joint problem solving, information exchange, and the diffusion of best practices, is often obscured by the debates over traditional compliance programs but exists in myriad factories throughout the world and has led to sustained improvements in working conditions and labor rights at these workplaces.
2009
Private, voluntary compliance programs, promoted by global corporations and nongovernmental organizations alike, have produced only modest and uneven improvements in working conditions and labor rights in most global supply chains. Through a detailed study of a major global apparel company and its suppliers, this article argues that this compliance model rests on misguided theoretical and empirical assumptions concerning the power of multinational corporations in global supply chains, the role information (derived from factory audits) plays in shaping the behavior of key actors (e.g., global brands, transnational activist networks, suppliers, purchasing agents, etc.) in these production networks, and the appropriate incentives required to change behavior and promote improvements in labor standards in these emergent centers of global production. The authors argue that it is precisely these faulty assumptions and the way they have come to shape various labor compliance initiatives throughout the world-even more than a lack of commitment, resources, or transparency by global brands and their suppliers to these programs-that explain why this compliance-focused model of private voluntary regulation has not succeeded. In contrast, this article documents that a more commitment-oriented approach to improving labor standards coexists and, in many of the same factories, complements the traditional compliance model. This commitment-oriented approach, based on joint problem solving, information exchange, and the diffusion of best practices, is often obscured by the debates over traditional compliance programs but exists in myriad factories throughout the world and has led to sustained improvements in working conditions and labor rights at these workplaces.
SSRN Electronic Journal, 2016
Worker rights advocates seeking to improve labor conditions in global supply chains have engaged in private political strategies prompting transnational corporations (TNCs) to adopt codes of conduct and monitor their suppliers for compliance, but it is not clear whether organizational structures established by TNCs to protect their reputations can actually raise labor standards. We extend the literature on private politics and organizational self-regulation by identifying several conditions under which codes and monitoring are more likely to be associated with improvements in supply chain working conditions. We find that suppliers are more likely to improve when they face external compliance pressure in their domestic institutional environment, when their buyers take a cooperative approach to monitoring, and when their auditors are highly trained. We find, further, that a cooperative approach to monitoring enhances the impact of auditor training, and that auditor training has a greater impact on improvement when coupled with a cooperative approach than with external compliance pressures. These findings suggest key considerations that should inform the design and implementation of monitoring strategies aimed at improving conditions in global supply chains as well as theory and empirical research on the organizational outcomes of private political activism for social change.
Does Lean Improve Labor Standards? Management and Social Performance in the Nike Supply Chain
Social compliance programs employed by MNEs face significant challenges in enforcing labor standards across global supply chains. This study examines whether buyers can improve social performance by introducing modern management systems to their suppliers. We analyze an intervention by Nike Inc. to promote the adoption of lean manufacturing in apparel suppliers across eleven developing countries since 2008. Using difference-in-differences estimates from a panel of over 300 factories, we find that lean adoption produced a 15 percentage point reduction in failing labor compliance grades, which are associated with wage and work hours violations. However, we find no effect of the lean program on health, safety, and environmental compliance. This pattern is consistent with the hypothesis that modern manufacturing systems improve labor standards primarily through changes in the relationship between labor and management, rather than increased managerial technical competence.