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Channels of buyer influence and labor standard compliance: the case of Cambodia's garment sector

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  • Chikako Oka

    (LSE - Department of Management - London School of Economics and Political Science - LSE - London School of Economics and Political Science)

Abstract

Given the continued growth in the globalization of production, working conditions in global supply chains have come under increased scrutiny. Although there has been much debate about corporate codes of conduct and monitoring procedures, the question of how buyers influence their suppliers' working conditions at the factory level remains poorly understood. Using a unique data set based on monitoring by the International Labour Organization (ILO) and original survey data collected in Cambodia's garment sector, this study shows that the main channel linking buyers and supplier compliance performance is the nature of their relationships. Market-based relationships mediated through sourcing agents are systematically associated with poorer compliance performance. In particular, when a reputation-conscious buyer is sourcing from a factory, it has a positive effect on compliance, and their presence appears to condition relationship variables. Deterrence and learning channels are not supported by the evidence. The findings signal the need to pay more attention to the nature of buyer-supplier relationships if we seek to improve labor standard compliance. Market-based relationships 153 motivate neither buyers nor suppliers to invest their time and resources to tackle the root causes of poor working conditions. Rather, the results here indicate the need to develop collaborative relationships marked by open dialogue, trust, and commitment, which in turn help to foster an environment supportive of continuous improvement in working conditions.

Suggested Citation

  • Chikako Oka, 2010. "Channels of buyer influence and labor standard compliance: the case of Cambodia's garment sector," Post-Print hal-02952274, HAL.
    • Handle: RePEc:hal:journl:hal-02952274
    DOI: 10.1108/S0742-6186(2010)0000017008
    Note: View the original document on HAL open archive server: https://hal.science/hal-02952274
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    Cited by:

    1. Raymond Robertson & Drusilla Brown & Rajeev Dehejia, 2021. "Working conditions and factory survival: Evidence from better factories Cambodia," Review of Development Economics, Wiley Blackwell, vol. 25(1), pages 228-254, February.
    2. Yanhua Bird & Jodi L. Short & Michael W. Toffel, 2019. "Coupling Labor Codes of Conduct and Supplier Labor Practices: The Role of Internal Structural Conditions," Organization Science, INFORMS, vol. 30(4), pages 847-867, July.
    3. Mendez, Samara & Peacock, Jacob & Butner, Matt, 2020. "Impact of Corporate Commitments to Source Cage-Free Eggs on Layer Hen Housing," OSF Preprints hkrsm, Center for Open Science.
    4. Kevin Kolben, 2017. "A Supply Chain Approach to Trade and Labor Provisions," Politics and Governance, Cogitatio Press, vol. 5(4), pages 60-68.
    5. Phon, Sophat & Khan, Sophy & Pich, Chansothi, 2017. "The simultaneous impacts of the increased minimum wage on the labor market and economy growth in Cambodia: Inside -Outside model or Monopoly-Union model?," MPRA Paper 88075, University Library of Munich, Germany, revised 26 Jul 2018.
    6. Christina Niforou, 2015. "Labour Leverage in Global Value Chains: The Role of Interdependencies and Multi-level Dynamics," Journal of Business Ethics, Springer, vol. 130(2), pages 301-311, August.

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