Abstract
Research on social sustainability in multi-tier supply chains is limited. Specifically, we know very little about a) the micro-processes involved in the way in which sub-suppliers (i.e., first-tier suppliers or sourcing agents) respond to the sustainability requirements imposed by their intermediaries; and b) the micro-level antecedents that condition their responses. To address these gaps, we used a longitudinal multiple case study method to explore multiple intermediary – sub-supplier dyads in South India's knitwear garment industry and drew upon constructs of behavioural economics. We found that the way in which intermediaries frame social sustainability requirements and their associated procedures influence both the way in which sub-suppliers perceive the procedural fairness of those requirements and the way in which they thus reciprocate. When intermediaries frame social sustainability requirements as ‘opportunity’ and engage in various procedures perceived to be procedurally fair by sub-suppliers, the latter reciprocate positively. Contrastingly, when intermediaries frame social sustainability requirements as ‘insulation’ and engage in various procedures perceived to be procedurally unfair by sub-suppliers, the latter reciprocate negatively. Under the production-dominant framing, sub-suppliers exhibit positive reciprocity only related to processing production orders. Our analysis inductively generated propositions that emphasize the important role played by framing in shaping the perceptions of fairness held by sub-suppliers towards social sustainability requirements and the reciprocity of the latter's responses to them.
Highlights
Social sustainability in supply chains is mainly concerned with improving the rights, welfare and entitlements of workers and enhancing the quality of their employment (Huq et al, 2016)
In this article, we ask two questions. a) What microprocesses are involved in the response of sub-suppliers to the social sustainability requirements imposed by their intermediaries? b) What are the micro-level antecedents that condition the responses of subsuppliers? We explore these questions by means of an in-depth longitudinal multiple case study of intermediary-sub-supplier dyads located in Tirupur, India
The lack of information and the absence of direct control intensify the challenges faced by lead firms in managing social sustainability in multi-tier global supply chains beyond first-tier suppliers—the hotspots for unsustainable conduct (Grimm et al, 2016; Wilhelm et al, 2016)
Summary
Social sustainability in supply chains is mainly concerned with improving the rights, welfare and entitlements of workers and enhancing the quality of their employment (Huq et al, 2016). The increasing global reach and complexity of many multi-tier global supply chains poses particular challenges for ‘lead’ firms trying to manage social sustainability (Mena et al, 2013). Much of this complexity stems from the supply chain's exposure to institutional environments characterized by weak legal frameworks (Khalid et al, 2015). Effectively influencing the practices of firms beyond first-tier dyadic relationships (direct buyer-supplier) is complicated by the increasingly global scope of supply relationships (Seuring et al, 2008), the lack of information on the identity and activities of subsuppliers (i.e., second-tier to nth-tier firms) (Wilhelm et al, 2016), and the absence or weakness of traditional contractual governance mechanisms and institutions responsible for enforcing contracts, more likely in developing countries (Grimm et al, 2014). The challenges linked to ensuring social sustainability beyond direct supply relationships have meant that many of the severe and damaging examples of unsustainable conduct have arisen in the context of sub-supplier factories (Grimm et al, 2016)
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