Why do Firms Support Transnational Industrial Relations Arrangements? A Processual Lens

Abstract

Looking at the emergence of transnational industrial relations (TIRA) systems in the global garment industry, this paper explores firms’ decisions to join TIRAs. Taking a multi-level processual lens, we examine the case of the Action Collaboration Transformation initiative (ACT), a new multi-firm TIRA aiming to implement living wages in the global garment industry. Our data shows that ACT membership cannot be fully explained by the drivers emphasized in the existing literature, such as firms’ reputational sensitivity, firm size, market segment or firm type. Rather, our inductive approach shows that the creation of ACT occurred through the interaction of multi- level processes connecting micro and macro level dynamics. Our analysis makes two contributions to extant literature. First, we show how labor governance and CSR institutions – such as CSR departments within firms and multi-stakeholder initiatives – can foster particular kinds of agency and stimulate further institutional development across issue domains within the same industry. Second, we highlight the importance of interpersonal relationships and human agency in the development of TIRAs as a new, union-inclusive form of labor governance.