Event Details

Eugenia Rosca will present a seminar to the Management Science Department

Abstract: Corporate social responsibility initiatives in global value chains have had limited success in improving labor conditions at supplier factories. While prior research has underscored the importance of buyers’ organizational practices and institutional contexts, we lack a micro-foundational account of why some firms are more effective than others in influencing suppliers’ working conditions. This study advances such an explanation by theorizing and testing the role of buyers’ employee-focused stakeholder orientation, an organizational culture that treats employees as salient stakeholders and values their dignity, safety, and voice. We argue that buyers with strong employee-focused stakeholder orientation are more likely to transfer values and practices conducive to better working conditions across their supply chains. However, the effectiveness of this transfer is shaped by institutional pressures in suppliers’ home countries, including formal institutions that protect democratic rights and informal cultural norms. We test our arguments using data on the internal employment practices of 87 global apparel and footwear companies, combined with hand-coded labor violations from 833 supplier factories. The results demonstrate that buyers’ employee-focused stakeholder orientation is significantly associated with improved working conditions at supplier factories, and this effect is moderated by the institutional environments of suppliers. Our findings contribute to the literature by illuminating how firms’ internal stakeholder orientation influences global labor standards, offering managerial and policy implications for improving working conditions in global supply chains.