Drivers of sub-supplier social sustainability compliance: an emerging economy perspective. Issue 6 (4th June 2020)

• Record Type: Journal Article
• Authors: Venkatesh, V.G.; Zhang, Abraham; Deakins, Eric; Mani, Venkatesh
• Is Part Of: Supply chain management. Volume 25:Issue 6(2020)
• Page Start: 655
• Page End: 677
• Publication Date: 2020-06-04
• Subjects: India -- Sustainability -- Garment industry -- Empirical study -- Suppliers; Business logistics -- Periodicals; 658.7
• DOI: 10.1108/SCM-07-2019-0251
• Languages: English
• ISSNs: 1359-8546

Abstract

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–supplier 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.