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In recent decades, the global economy has become increasingly structured around supply chains that connect firms within and across national borders, a reliance that has been the subject of controversy in light of disruptions from the COVID-19 pandemic. In response to these disruptions, firms have adapted in various ways to maintain their level of production. In this essay, we describe two approaches companies pursued during the pandemic: the “sweating” strategy in which firms shifted costs onto the worker, and the “securing” strategy in which firms chose instead to invest resources into supporting their workforce. In doing so, we argue that the companies’ respective approaches in the context of the COVID-19 pandemic reflected their long-standing management models. Furthermore, we suggest that the insights gained from examining these approaches may provide a novel perspective on how to reimagine the current political economy.

Despite decades of debate and efforts to improve global labor standards, multiple problems still persist. Whether arguing for a more active role for the state, persuading firms to adopt codes of conduct, improving monitoring and sanctioning processes or seeking a higher degree of commitment between supply chain actors, scholars still lack an adequate explanation for why labor problems do not show improvement. Existing theories, while they will help, are not sufficient to solve this issue because they are focused on the production side of markets—the result both of an intellectual and policy bias towards production and the tendency to look for solutions where problems occur. Using a case study of Hewlett-Packard’s (HP) supply chain, qualitative and quantitative data from field visits to plants in South East Asia and a unique dataset of HP’s code of conduct audits, we demonstrate that even under the most-likely conditions that favor previous theories of labor standards, code of conduct violations, in particular excess working hours, exhibit widespread persistence. Having explained this, we demonstrate that this persistence is the product of a set of policies and practices designed and implemented upstream by global buyers and their lead suppliers

Private, voluntary compliance programs, promoted by global corporations and nongovernmental organizations alike, have produced only modest and uneven improvements in working conditions and labor rights in most global supply chains. Through a detailed study of a major global apparel company and its suppliers, this article argues that this compliance model rests on misguided theoretical and empirical assumptions concerning the power of multinational corporations in global supply chains, the role information (derived from factory audits) plays in shaping the behavior of key actors (e.g., global brands, transnational activist networks, suppliers, purchasing agents, etc.) in these production networks, and the appropriate incentives required to change behavior and promote improvements in labor standards in these emergent centers of global production. The authors argue that it is precisely these faulty assumptions and the way they have come to shape various labor compliance initiatives throughout the world—even more than a lack of commitment, resources, or transparency by global brands and their suppliers to these programs—that explain why this compliance-focused model of private voluntary regulation has not succeeded. In contrast, this article documents that a more commitment-oriented approach to improving labor standards coexists and, in many of the same factories, complements the traditional compliance model. This commitment-oriented approach, based on joint problem solving, information exchange, and the diffusion of best practices, is often obscured by the debates over traditional compliance programs but exists in myriad factories throughout the world and has led to sustained improvements in working conditions and labor rights at these workplaces.

In the United States, historical oppression and discrimination have barred certain groups based on their gender, race, religion, sexuality, and socioeconomic class from full participation in higher education. While there has been a long history of protest and pressure to diversify, progress has been mixed. After a recent wave of protests at Brown University, Richard M. Locke faced the task of developing a realistic and coherent university plan for addressing concerns and demands. Implementing insights from Joshua Cohen’s work on deliberation, Locke led a process that resulted in one of the most ambitious university diversity and inclusion action plans in the country. In this chapter, Locke describes the process undertaken and seeks to generalize from the experience at Brown to argue that collective deliberation can be an effective model for how universities can address an array of complex issues faced today.

Concerns about poor working conditions in global supply chains have led to private initiatives that seek to regulate labor practices in developing countries. But how effective are these regulatory programs? We investigate the effects of transnational private regulation by studying Hewlett Packard’s (HP) supplier responsibility program. Using analysis of factory audit records, interviews with buyer and supplier management, and field research at production facilities across seven countries, we find that national context — not repeated audits, capability building, or supply chain power — is the most important predictor of workplace compliance. We then use field research to identify two local institutions that complement transnational private regulation: domestic regulatory authorities and civil society organizations. Although these findings imply limits to private regulation in institutionally poor settings, they also highlight opportunities for productive linkages between transnational actors and local state and society.

This paper argues that, rather than focus on Italy's well-known institutional deficits, especially vis-a-vis its larger, more prosperous European neighbours, we should examine instead the experiences of another set of countries (India, Israel, etc.) that have promoted economic reform and growth through entrepreneurship. Relying on cross-national networks to provide local firms with capital, technology, market access and managerial skills, firms in these other countries were able to supplement or even circumvent institutional deficiencies in their home countries and build successful enterprises. Perhaps a similar strategy could be pursued by Italy's small and medium-sized firms and thus help relaunch growth in the Italian economy.

This study tests the hypothesis that lean manufacturing improves the social performance of manufacturers in emerging markets. We analyze an intervention by Nike, Inc., to promote the adoption of lean manufacturing in its apparel supply chain across 11 developing countries. Using difference-in-differences estimates from a panel of more than 300 factories, we find that lean adoption was associated with a 15 percentage point reduction in noncompliance with labor standards that primarily reflect factory wage and work hour practices. However, we find a null effect on factory health and safety standards. This pattern is consistent with a causal mechanism that links lean to improved social performance through changes in labor relations, rather than improved management systems. These findings offer evidence that capability-building interventions may reduce social harm in global supply chains. Data, as supplemental material, are available at http://dx.doi.org/10.1287/mnsc.2015.2369 . This paper was accepted by Bruno Cassiman, business strategy.

How does international trade shape social institutions in the developing world? The research literature is conflicted: importing firms may demand their trading partners adhere to higher labor and environmental standards, or they may penalize higher standards that raise costs. This study offers the first large-scale analysis of how firm-level trade responds to information about social standards. Contrary to the "race to the bottom" hypothesis, it finds that importers reward exporters for complying with labor and environmental standards. In difference-in-differences estimates from over two thousand manufacturing establishments in 36 countries, achieving compliance is associated a 4% [1%, 7%] average increase in annual purchasing. The effect is robust to controlling for manufacturing performance and reflects both rewards for reaching compliance and penalties for falling out of compliance. The results suggest that activist campaigns and transnational private regulation have created economic incentives for higher social standards in certain trade relationships.

Que pueden hacer los codigos empresariales de buena conducta en pro de la vigilancia del cumplimiento de las normas internacionales del trabajo y de la mejora de las condiciones de trabajo en las cadenas de aprovisionamiento mundiales? Para contestar a esta pregunta, lo primero que hacen los autores es resumir las averiguaciones de un estudio de las condiciones de trabajo en 800 fabricas de cincuenta y un paises suministradoras de la empresa Nike Inc. y de dos monografias al respecto. Despues analizan hasta que punto encajan los codigos en el vasto mosaico de instituciones, politicas y practicas destinadas a regular y mejorar las condiciones de trabajo, y abogan por un metodo gradual y complementario para realizar esta labor en las cadenas de aprovisionamiento mundiales. Esbozan las innovaciones que son necesarias en materia institucional y de investigacion para poner a prueba estas ideas.

Resume. Quel role les codes de conduite des entreprises peuvent-ils jouer dans le controle du respect des normes internationales du travail et l'amelioration des conditions de travail dans les chaines mondiales de production? Les auteurs resument d'abord leur analyse des audits d'usine de 800 fournisseurs de Nike dans 51 pays et de deux etudes de cas. Ils examinent ensuite la facon dont les codes s'inserent dans un ensemble d'institutions, de politiques et de pratiques, et suggerent une approche fondee sur la complementarite et evolutive pour reglementer les conditions de travail dans ces chaines. Ils signalent quels types de recherches et d'innovations institutionnelles permettraient de valider ces suggestions.

What role can corporate codes of conduct play in monitoring compliance with international labour standards and improving working conditions in global supply chains? Addressing this question, the authors first summarize the results of research on factory audits of working conditions in 800 of Nike's suppliers in 51 countries and two intensive case studies. They then discuss how the codes fit into the broader array of institutions, policies and practices aimed at regulating and improving working conditions, suggesting an evolutionary and complementary approach to regulating working conditions in global supply chains. They outline additional research and institutional innovations needed to test these ideas.

Introduction Twenty-five years ago, I began my first full-time job, teaching seventh grade social studies at Francis W. Parker School in Chicago. I was a young and inexperienced teacher, just out of college. But I was filled with enthusiasm and convinced that education could play a progressive role in our society. I was hired to teach African and Latin American history (I had majored in European history and literature) to seventh grade students (known to be a challenging age group). I tackled this challenge by revamping the curriculum so that my students would learn not only about the cultures, histories, and geographies of these continents but also about themselves. I used a combination of textbooks, novels, and experiential exercises in my classes. For example, while discussing the conquest and colonization of Africa, we read Chinua Achebe’s Things Fall Apart. This wonderful book not only depicts this historical moment from an African perspective but also portrays the main character as someone who is struggling to define himself and his role in a rapidly changing society. I thought that a discussion of this text might help my students learn something about Africa while at the same time become aware of (perhaps clarify) some of their own (inner) struggles. Similarly, when covering the 1973 Chilean coup, I had the students read excerpts from the U.S. Congressional Records on CIA covert activities, memoirs of people who had been arrested and tortured by the military regime, and poems by Pablo Neruda. Films, guest speakers, and experiences supplemented the texts. We even learned to dance to African drumming! In short, I had organized a rigorous and engaging academic experience. (See Appendix 1 for a copy of the course curriculum.) Yet, beyond the academic learning that was (I hope) taking place in my classroom, a completely different, perhaps more powerful experience

Production in the Innovation Economy emerges from several years of interdisciplinary research at MIT on the links between manufacturing and innovation in the United States and the world economy. Authors from political science, economics, business, employment and operations research, aeronautics and astronautics, and nuclear engineering come together to explore the extent to which manufacturing is key to an innovative and vibrant economy. Chapters include survey research on gaps in worker skill development and training; discussions of coproduction with Chinese firms and participation in complex manufacturing projects in China; analyses of constraints facing American start-up firms involved in manufacturing; proposals for a future of distributed manufacturing and a focus on product variety as a marker of innovation; and forecasts of powerful advanced manufacturing technologies on the horizon. The chapters show that although the global distribution of manufacturing is not an automatic loss for the United States, gains from the colocation of manufacturing and innovation have not disappeared. The book emphasizes public policy that encourages colocation through, for example, training programs, supplements to private capital, and interfirm cooperation in industry consortia. Such approaches can help the United States not only to maintain manufacturing capacity but also, crucially, to maximize its innovative potential. Contributors Joyce Lawrence, Richard K. Lester, Richard M. Locke, Florian Metzler, Jonas Nahm, Paul Osterman, Elisabeth B. Reynolds, Donald B. Rosenfeld, Hiram M. Samel, Sanjay E. Sarma, Edward S. Steinfeld, Andrew Weaver, Rachel L. Wellhausen, Olivier de Weck

This chapter analyzes efforts by private firms – and at times, entire industries – to enforce labor standards in global supply chains through corporate self-regulation. In the wake of several well-publicized scandals involving child labor, hazardous working conditions, excessive working hours, and poor wages in the factories that supply major global brands, numerous multinational corporations developed their own “codes of conduct” and “monitoring” schemes aimed at promoting “compliance” with these codes. In fact, given the limited ability (perhaps even willingness) of many developing country governments to enforce their own laws, private compliance is currently the principal way both labor rights nongovernmental organizations (NGOs) and global corporations address poor working conditions in global supply chain factories. The underlying assumption of this model of “private voluntary regulation” is that information collected through factory audits will be used both by labor rights NGOs and consumer groups to exert pressure on global brands to reform their sourcing practices as well as by the brands themselves, who rely on this information to police and pressure their suppliers into improving standards in their factories. Should the factories fail to remedy various workplace problems, brands are expected to switch their orders to supposedly more “ethical” producers. Given their widespread use, we might expect these private compliance programs to be highly effective, but do these initiatives actually lead to better working conditions and enforced labor rights in global supply chains? If so, under what conditions? This chapter addresses these questions by first reviewing the various debates and controversies surrounding private compliance programs, then assessing the underlying assumptions and key features of this model of corporate self-regulation, and finally illustrating how these programs work in practice by analyzing the compliance efforts of two major global corporations – ABC and Hewlett-Packard – both seen as leaders in corporate social responsibility and pioneers in developing corporate codes of conduct and private monitoring schemes.

Introduction When an electronics worker in Suzhou, China, sought compensation for the chemical poisoning he suffered at work, he appealed neither to his employer nor to the government agencies responsible for supervising local workplace standards. Instead, he addressed the global brand that purchased the product he was working on: “We hope Apple will heed to its corporate social responsibility.” This incident reflects a broader trend in global supply chains. Throughout the world and in many industries, global buyers have acknowledged a degree of responsibility for workplace conditions in supplier factories. They have pledged efforts to ensure that the goods they eventually market are not made under abusive, dangerous, environmentally degrading, or otherwise unethical production conditions. They have committed, in short, to using private, voluntary regulation to address labor issues traditionally regulated by government or labor organizations. For the most part, they have acted on these commitments. But how effective are these private initiatives at improving labor standards? In this book, I explore both the promise and the limits of private voluntary regulation in today’s global economy. Through a detailed examination of initiatives undertaken by several global brands (e.g., Nike, Hewlett-Packard) – either alone or in collaboration with other firms, nongovernmental organizations (NGOs), and even international organizations such as the International Labor Organization (ILO) – this book sheds light on the conditions under which private, voluntary programs can successfully promote labor standards among their globally dispersed suppliers.

Since the early 1990s, major reform efforts aimed at reducing industrial conflict, rationalising public sector labour relations, restructuring collective bargaining arrangements, and re-establishing tripartite ‘con-certation’ have transformed Italian industrial relations. This article argues that because these new reforms have been accompanied by significant shifts in both Italy's political system and the unions’ own organisation, they stand a better chance of succeeding than previous reform projects.

This study tests the hypothesis that lean manufacturing improves the social performance of manufacturers in emerging markets. We analyze an intervention by Nike Inc. to promote the adoption of lean manufacturing in its apparel supply chain across eleven developing countries. Using difference-in-differences estimates from a panel of over three hundred factories, we find that lean adoption was associated with a 15 percentage point reduction in noncompliance with labor standards that primarily reflect factory wage and work hour practices. However, we find a null effect on factory health and safety standards. This pattern is consistent with a causal mechanism that links lean to improved social performance through changes in labor relations, rather than improved management systems. These findings offer evidence that capability-building interventions may reduce social harm in global supply chains.

In recent years, global corporations and national governments have been enacting a growing number of codes of conduct and labor laws to combat dangerous or degrading work conditions in global supply chains. On the receiving end of this activity, local producers must contend with multiple regulations and verification systems, but it is not clear how these systems interact and the results they produce. This paper examines the public and private enforcement of labor standards in the sugarcane, sugar and ethanol sector in Brazil. It finds that private and public agents refuse to communicate with each other, but they act in ways that reinforce each other’s actions. On one side, labor inspectors and prosecutors use their broad legal powers to outlaw some forms of outsourcing. On the other side, private auditors use their extensive access to targeted businesses and the trust they command as insiders to help them engage in a process of workplace transformation that makes it easier for firms to comply. Although these public and private agents refused to cooperate with one another, their parallel enforcement actions blocked the low road and steered targeted firms to a higher road that made compliance with labor standards not only viable, but sometimes even desirable.

Despite decades of debate and efforts to improve global labor standards, multiple problems still persist. Whether arguing for a more active role for the state, persuading firms to adopt codes of conduct, improving monitoring and sanctioning processes or seeking a higher degree of commitment between supply chain actors, scholars still lack an adequate explanation for why labor problems do not show improvement. Existing theories, while they will help, are not sufficient to solve this issue because they are focused on the production side of markets — the result both of an intellectual and policy bias towards production and the tendency to look for solutions where problems occur. Using a case study of Hewlett-Packard’s (HP) supply chain, qualitative and quantitative data from field visits to plants in South East Asia and a unique dataset of HP’s code of conduct audits, we demonstrate that even under the most-likely conditions that favor previous theories of labor standards, code of conduct violations, in particular excess working hours, exhibit widespread persistence. Having explained this, we demonstrate that this persistence is the product of a set of policies and practices designed and implemented upstream by global buyers and their lead suppliers

Poor working conditions in global supply chains have led to private initiatives that seek to regulate labor practices in developing countries. But how effective are these regulatory programs? We investigate the effects of transnational private regulation by studying Hewlett-Packard's (HP) supplier responsibility program. Using analysis of factory audits, interviews with buyer and supplier management, and field research at production facilities across seven countries, we find that national context – not repeated audits, capability building, or supply chain power – is the key predictor of workplace compliance. Quantitative analysis shows that factories in China are markedly less compliant than those in countries with stronger civil society and regulatory institutions. Comparative field research then illustrates how these local institutions complement transnational private regulation. Although these findings imply limits to private regulation in institutionally poor settings, they also highlight opportunities for productive linkages between transnational actors and local state and society.

What role can private voluntary regulation play in improving labor standards and working conditions in global supply chain factories? How does this system relate to and interact with other systems of labor regulation and work organization? This paper seeks to address these questions through a structured comparison of two factories supplying Nike, the world’s largest athletic footwear and apparel company. These two factories have many similarities - both are in Mexico, both are in the apparel industry, both produce more or less the same products for Nike (and other brands) and both are subject to the same code of conduct. On the surface, both factories appear to have similar employment (i.e., recruitment, training, remuneration) practices and they receive comparable scores when audited by Nike’s compliance staff. However, underlying (and somewhat obscured by) these apparent similarities, significant differences in actual labor conditions exist between these two factories. What drives these differences in working conditions? What does this imply for traditional systems of monitoring and codes of conduct? Field research conducted at these two factories reveals that beneath the code of conduct and various monitoring efforts aimed at enforcing it, workplace conditions and labor standards are shaped by very different patterns of work organization and human resource management policies.

This paper presents a matched pair case study of two factories supplying Nike, the world's largest athletic footwear and apparel company. These two factories have many similarities - both are in Mexico, both are in the apparel industry, both produce more or less the same products for Nike (and other brands) and both are subject to the same code of conduct. On the surface, both factories appear to have similar employment (i.e., recruitment, training, remuneration) practices and they receive comparable scores when audited by Nike's compliance staff. However, underlying (and somewhat obscured by) these apparent similarities, significant differences in actual labor conditions exist between these two factories. What drives these differences in working conditions? What does this imply for traditional systems of monitoring and codes of conduct? Field research conducted at these two factories reveals that beyond the code of conduct and various monitoring efforts aimed at enforcing it, workplace conditions and labor standards are shaped by very different patterns of work organization and human resource management policies.

Using a unique data set based on factory audits of working conditions in over 800 of Nike's suppliers in 51 countries, this paper seeks to explore whether or not monitoring for compliance with corporate codes of conduct - currently the principal way both global corporations and labor rights non-governmental organizations (NGOs) address poor working conditions in global supply chain factories - actually lead to remediation in terms of improved working conditions and enforced labor rights. The evidence presented suggests that notwithstanding the significant efforts and investments by Nike and its staff to improve working conditions among its suppliers, monitoring alone appears to produce only limited results. Instead, our research indicates that when monitoring efforts are combined with other interventions focused on tackling some of the root causes of poor working conditions - by improving the ability of suppliers to better schedule their work and improve their quality and efficiency - working conditions appear to significantly improve. This suggests that the current (highly polarized) debates over monitoring and labor standards need to be recast and new, more systemic approaches towards tackling these problems need to be pursued.

Union membership and collective bargaining coverage have declined dramatically in the U.S. to the point where there is a serious question of whether unions can now, or in the future, serve the functions American workers and society expect of them. Yet, most of us who are grounded in the values and traditions of the field of industrial relations continue to believe in the need for and value of unions. So do 75 per cent of the American public2 and at least some thoughtful leaders in the business community.3 History tells us, however, that unions are only successful when they adapt to and match up well with the structure of the economy, employer organisational forms, and the preferences and needs of the work-force. Given the significant changes in these features of the economy and society, it is obvious that unions have a tall order in store. This paper develops a view of what we believe American unions need to do if they are to be significant players in today’s and tomorrow’s labour markets and economy. We propose that the next generation unions4 view and position themselves as networked institutions that enroll, represent, and provide services to workers on a continuous life-long basis beginning when they are in school and about to enter the labour market, throughout their careers, and into their retirement years.5 This view of unions is part of a larger set of institutional changes we see as necessary for updating America’s labour market institutions and policies to catch up with changes in the workforce, nature of work and economy.