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Monitoring the Monitors: How Social Factors Influence Supply Chain Auditors

Harvard Business School Technology & Operations Mgt. Unit Working Paper No. 14-032

UC Hastings Research Paper No. 84

51 Pages Posted: 22 Jul 2014 Last revised: 26 Sep 2014

Jodi L. Short

University of California Hastings College of the Law

Michael W. Toffel

Harvard Business School

Andrea Hugill

Harvard Business School

Multiple version iconThere are 2 versions of this paper

Date Written: September 4, 2014

Abstract

Outsourcing firms increasingly rely on social auditors to provide strategic information about the conduct of their suppliers to manage the reputational risks that can arise from dangerous, illegal, and unethical behavior at supply chain factories. But little is known about what influences auditors’ ability to identify and report poor supplier conduct. We find evidence that private supply chain auditors’ reporting practices are shaped by several social factors including their experience, gender, and professional training; their ongoing relationships with suppliers; and the gender diversity of their audit teams. By providing the first comprehensive and systematic findings on supply chain auditing practices, our study suggests strategies companies can pursue to develop more credible monitoring regimes to reduce information asymmetries between themselves and their suppliers.

Keywords: industry self-regulation, auditing, codes of conduct, supply chains, corporate social responsibility, globalization

JEL Classification: F23, K20, K31, K32, K42

Suggested Citation

Short, Jodi L. and Toffel, Michael W. and Hugill, Andrea, Monitoring the Monitors: How Social Factors Influence Supply Chain Auditors (September 4, 2014). Harvard Business School Technology & Operations Mgt. Unit Working Paper No. 14-032; UC Hastings Research Paper No. 84. Available at SSRN: https://ssrn.com/abstract=2469953 or http://dx.doi.org/10.2139/ssrn.2469953

Jodi L. Short (Contact Author)

University of California Hastings College of the Law ( email )

200 McAllister Street
San Francisco, CA 94102
United States

Michael W. Toffel

Harvard Business School ( email )

Boston, MA 02163
United States
617.384.8043 (Phone)

Andrea Hugill

Harvard Business School ( email )

Soldiers Field Road
Morgan 270C
Boston, MA 02163
United States

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