Supplier strategies towards economic and social upgrading: the drivers and implications for workers

Abstract

Purpose: The thesis sets out to investigate the different upgrading strategies adopted by suppliers, the firm-level and relational conditions driving these, and their implications for employees' working and personal lives. The study is based on 18 Bangladeshi garment manufacturing firms involved in a specific form of international outsourcing relationship with their buyers, namely, tacit promissory contracting. Within this relational arrangement, the studied firms have been engaged in recurrent discrete transactions with the same buyers since their inception, but without the existence of any original legally binding written agreement. Design: The study adopts a multiple case study approach. Face-to-face interviews have been conducted with 25 owners/managers of the studied firms and 35 workers of those firms. Additionally, organisational documents and local newspaper articles have been collected wherever possible. The data analysis has been conducted using template analysis and fuzzy set analysis.Findings: The analysis has led to three key findings. First, the small suppliers have mainly focused on output (capacity) enhancement in their initiation of economic upgrading. In contrast, relatively larger firms have concentrated on higher value-adding actions. The social upgrading strategies of the small firms have mainly involved implementing measurable dimensions of the codes, while, in the case of large and medium sized firms, these have also involved addressing more sophisticated rights of the workers. Second, the suppliers are more eager to unilaterally pursue economic upgrading compared to undertaking social upgrading. Third, the upgrading initiatives have generated mixed results for workers in different sized firms. Their socially grounded needs have been neglected in the process of implementing the labour standards prescribed by the buyers. Originality: The thesis contributes to the IB and GVC literatures in three ways. First, the thesis elucidates a to-date unexplored form of international outsourcing relationship, namely tacit promissory contracting. Second, the thesis has emphasised the role of suppliers as the initiators of their firm-level upgrading strategies. Third, the study has revealed the broader implications of upgrading strategies by identifying the root causes of the problems associated with them, including their human rights implications. The study advances understanding in IB by moving beyond the typical MNE-centric approach and placing central focus on suppliers, along with integrating the voices of their workers. It has also identified the limitations of the social upgrading approach in GVC and has pointed out how focusing on a wider range of human rights would yield more insights into this concept.  

Date of Award	1 Aug 2016
Original language	English
Awarding Institution	The University of Manchester
Supervisor	Rudolf R. Sinkovics (Supervisor) & Noemi Sinkovics (Supervisor)