The Growth of Private Regulation of Labor Standards in Global Supply Chains: Mission Impossible for Western Small and Medium-Sized Firms?

42 Pages Posted: 1 Sep 2012

See all articles by Jette Steen Knudsen

Jette Steen Knudsen

Tufts University - The Fletcher School of Law and Diplomacy

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Date Written: August 31, 2012

Abstract

Multinational corporations (MNCs) have come under pressure to adopt private regulatory initiatives such as supplier codes of conduct in order to address poor working conditions in global supply chain factories. While a well-known literature explores drivers and outcomes of such monitoring schemes, this literature focuses mainly on large firms and has ignored the growing integration of small and medium-sized enterprises (SMEs) into global supply chains. Furthermore, the literature on corporate social responsibility (CSR) in SMEs primarily emphasizes domestic initiatives and not global challenges. Focusing on the Business for Social Compliance Initiative (BSCI) this article examines the positions of private actors, who demand and supply private regulation as well as the positions of those firms, who are the targets of such schemes. As the BSCI has grown its membership, MNCs increasingly request that SMEs meet BSCI requirements in global supply chains even though compliance is a ‘mission impossible’ for many smaller firms. As a result of this development, the private regulatory system is facing growing strain.

Keywords: Corporate Social Responsibility (CSR), Small and Medium-Sized Enterprises (SMEs), global supply chains, Business for Social Compliance Initiative (BSCI)

Suggested Citation

Knudsen, Jette S., The Growth of Private Regulation of Labor Standards in Global Supply Chains: Mission Impossible for Western Small and Medium-Sized Firms? (August 31, 2012). Journal of Business Ethics, Forthcoming, Available at SSRN: https://ssrn.com/abstract=2139229

Jette S. Knudsen (Contact Author)

Tufts University - The Fletcher School of Law and Diplomacy ( email )

Medford, MA 02155
United States

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