Emerging Roles of Lead Buyer Governance for Sustainability Across Global Production Networks

Rachel Alexander

doi:10.1007/s10551-019-04199-4

Rachel Alexander

Open Access

https://doi.org/10.1007/s10551-019-04199-4

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Abstract

Global production networks (GPNs) connect multiple producers involved in fragmented manufacturing processes. Major brands and retailers, considered as lead firms, are under increasing pressure to ensure products made through GPNs are produced sustainably. Theories of governance developed to understand dynamics in outsourced production can provide insight into this issue. However, these theories and related empirical research have often focused on relationships between lead firms and upper-tier suppliers. When manufacturing involves multiple fragmented stages, understanding the role of lead firms becomes more difficult. This article considers new governance roles that lead firms, as buyers, are playing when attempting to promote sustainable practices across all stages of production for buyer-driven industries. The focus is exploring the nature of new governance approaches which lead firms have developed in order to address diverse sustainability challenges found within GPNs, particularly related to lower-tier suppliers. These approaches can involve lead firms working through vertical buyer–seller links or developing new horizontal relationships, which link lead firms with lower-tier suppliers and governance processes in these suppliers’ local productive systems. The findings draw from field research examining how top UK garment retailers provide governance to producers involved in creating cotton garments in India and a review of publicised policies and practices of these retailers related to promoting sustainable production. Five types of governance mechanisms that can involve vertical or horizontal links are identified. Considering the growth of new governance relationships expands previous conceptions of the roles of lead firm governance.

Highlights

Contemporary manufacturing processes can involve lead firms identified with final products created through activities carried out by a network of suppliers each responsible for a different stage of production
Having a network as a case study provides an approach which differs from much research on sustainable supply chain managment (SSCM) as most empirical studies have focused on lead firms’ and often not looked at even first-tier suppliers (Carter and Easton 2011)
The Promotion of Voluntary Change approach may be useful in local regions which do not have strong key governance actors, for reaching producers who are in the lower-tiers of an extended supplier network (ESN) or for broadly disseminating information related to an innovative sustainable practice

Summary

Introduction

Contemporary manufacturing processes can involve lead firms identified with final products created through activities carried out by a network of suppliers each responsible for a different stage of production. Within a GPN framework, a model that can facilitate the analysis of governance flows across fragmented production processes is provided by Alexander (2018) This approach identifies key structures that are important to consider in ESNs as the identities of the actors at the top of the network, the types of vertical links that connect network members, the types of businesses involved as producers and the locations of network members. These considerations are seen as important for understanding why particular production practices are being used and how to promote changes.

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