Social responsibility in apparel supply chains : Exploring drivers, enablers, and barriers in Vietnam and Indonesia

Abstract

Despite the slowly growing presence of SSCM related research and given the prominent social issues in the apparel industry, in-depth research on the spot that concentrates particularly on developing country suppliers is highly critical to provide further grounding and fuel the debate. As a result three qualitative Research Studies on social SSCM have been conducted that explore (1) the drivers, enablers, and barriers to social SSCM in apparel supply chains based on the current state of literature, (2) the role that an apparel sourcing agent plays for the implementation of social management strategies in case apparel retailers opt for a mediated sourcing strategy, (3) threats to social compliance strategies in apparel buyer-supplier relationships. A distinctive highlight of the dissertation at hand is the investigation of multiple apparel supply chain actors incorporating the views of a global apparel retailer in Europe and multiple suppliers in Vietnam and Indonesia. More specifically, the dissertation presents a coherent investigation starting with the depiction of a conceptual framework for social management strategies as a means for social risk management (SRM), exclusively aiming at the apparel industry. In accordance to the identified research gaps and suggested research directions from the conceptual framework, the role of the apparel sourcing agent for social management strategies was analysed by conducting a multiple case study approach with evidence from Vietnam and Europe, ultimately suggesting ten propositions. Whereas a further multiple case study data collection in Vietnam, Indonesia and Europe allowed for the investigation of buyer-supplier relationships with regards to social compliance strategies by using core tenets of agency theory to interpret the findings and outline ten propositions. Based on the development of a conceptual framework on social SSCM in the apparel industry, the formulation of related 20 propositions with evidence from crucial developing (apparel sourcing) countries, and the application of agency theory which has been declared as a shortfall in this context, this thesis contributes with further grounding to SSCM theory and substantially contributes to the debate by addressing numerous research gaps. Findings indicate that apparel retailers adopt SRM to their supply chains that typically include collaboration, assessment, and reporting strategies. While collaboration is a major antecedent to generate trust and transparency between supply chain partners, the assessment practice ensures social performance measures of apparel suppliers. Usually the achievements of collaboration and assessment practices become part of the CSR reports that conveys transparency to stakeholders in order to gain credibility, legitimacy and protect their brand image. However, these practices have become subject to scrutiny, as there is evidence that apparel supply chain actors are likely to use SRM practices instrumentally to mitigate social risk pressures derived from e.g. non-governmental organizations (NGOs) or media. Consequently, the findings suggest that the most dominant driving factor for SRM implementation is due to pressure from stakeholders that act as watchdogs and are able to substantially harm a brand`s image. In this regard, for effective SRM in apparel supply chains, a high degree of a firm`s internal orientation and commitment towards social responsibility of any apparel supply chain actor is the most critical enabling precondition. A significant barrier to SRM was detected at the apparel supplier stage, as suppliers not only face pressures deriving from their buyers but do also create self-induced obstacles in improving their social performance for the sake of profit maximization. Moreover, the findings clearly confirm that there is an ongoing lack regarding the social dimension in SSCM disciplines and little research that investigates predominantly the view of apparel suppliers in developing countries. Based on the evidence from the first Research Study, there have not only been gaps detected, but also promising research avenues. As such, a highly neglected supply chain actor, the apparel sourcing agent located in Vietnam, was approached in the second Research Study. Findings reveal that an internal sustainability oriented sourcing agent can play a critical role as an enabler for the implementation and effectiveness of social management strategies typically initiated by apparel retailers. The social sustainability roles assumed by an internal sustainability oriented sourcing agent are: supplier developer and coordinator, gatekeeper and safeguard, cultural broker and social risk manager, all of which substantially facilitate the implementation of social management strategies. As the conceptual framework in Research Study 1 revealed obstacles to SRM and the researcher observed various challenges to social management strategies during data collection in Research Study 2, the third Research Study takes another direction focusing exclusively on barriers. Consequently, further evidence from Vietnamese and Indonesian cases was collected with the primary aim to understand failures to international social accountability standards, which is yet the most prevalent tool for managing social issues in apparel supply chains. By the application of the agency theory lens, the results of this third study clearly demonstrates the defective nature of an apparel supply chain setting that is governed by substantial goal conflicts amongst supply chain actors. As a logical result, opportunistic behaviour emerges and translates into non-compliance and violations against respective codes of international social standards, threatens the implementation of social management strategies. Findings show that apparel retailers perform hidden characteristics and hidden intentions, whereas sourcing agents and Tier 1 suppliers are likely to perform hidden characteristics, hidden intentions, and hidden actions all with the predominant aim to meet their economic self-interest (homo oeconomicus).