Assessing the social sustainability impact on suppliers: the role of global value chains governance strategies.

Abstract

Stakeholder awareness of social sustainability issues is growing, but few recognize what motivates companies to implement social sustainability in their supply chain management or return on investment in developing countries, where cultural norms might vary widely. We address this question by broadening stakeholder and institutional perspectives to investigate how customers, sustainability culture, management, and external stakeholders influence companies' acceptance of social sustainability in their supply chains. We collected information on 356 apparel and footwear manufacturers from 5 South Asian countries that sell to customers in Western Europe and North America. Our findings highlight the interdependence of organizational and institutional structures and define the boundaries of GVC governance mechanisms within a social sustainability framework. Our research shows that the success of examining social sustainability interventions applied by leading firms or the effects of collaboration-based global value chains depend on the supplier's local institutional framework. Social sustainability organizational practices influence supplier perceptions and responses to key corporate needs in the supplier's country. We demonstrate that GVC governance models are most conducive to suppliers' social sustainability implementation when contextualized with the local institutional needs for social sustainability in the supplier's country.