Abstract
Drawing on a study of a Scottish government initiative to ensure the provision of a living wage to social care workers, the article sheds new light on the value of regulating domestic supply chains to enhance labour standards in supplier organisations, and the factors that facilitate and hinder such regulation. The study confirms that supply chains driven by monopsonistic purchasers tend to drive down employment conditions, while indicating that the studied initiative met with a good deal of success due to a combination of the government generated ‘soft’ regulation and support from care providers that reflected both value and pragmatic considerations. It also highlights the contradictory tensions that can arise between policy aspirations and business objectives and suggests that to be effective, initiatives to enhance labour standards in supply chains need to address adverse market dynamics.
Highlights
Over the last three decades or so the role of commercial supply relationships in shaping employment conditions has taken on a growing significance as large public and private sector organisations have chosen to place a greater emphasis on management by ‘contracting’ rather than through ‘internal hierarchies’ (Williamson, 1975, 1985)
The present study usefully extends this evidence by showing that, in the case of domestic supply chains, government sponsored ‘soft regulation’ can be influential in this regard, at least in a public sector context and where its focus resonates with the values and more pragmatic business concerns of those in supplier organisations
The article has sought to address the lack of knowledge that currently exists on attempts to regulate domestic supply chains to protect and enhance labour standards in supplier organisations
Summary
Over the last three decades or so the role of commercial supply relationships in shaping employment conditions has taken on a growing (and, in historical terms, renewed) significance as large public and private sector organisations have chosen to place a greater emphasis on management by ‘contracting’ rather than through ‘internal hierarchies’ (Williamson, 1975, 1985). David Weil (2011) has drawn attention to how the shift towards externalisation has led to the creation of ‘fissured’ employment relationships in a number of industries with large concentrations of low paid workers (Weil, 2011, 2014). In these industries, powerful lead firms are noted to shape product market conditions, while to a large extent being separated from the employment of the workers who produce the goods and services for them.
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