Global Value Chains, Local Collective Action and Corporate Social Responsibility

Topics: Corporate social responsibility, Case study, International Labour Organization Pages: 35 (8153 words) Published: January 14, 2014
Business Strategy and the Environment
Bus. Strat. Env. 19, 1–13 (2010)
Published online in Wiley InterScience
(www.interscience.wiley.com) DOI: 10.1002/bse.670

Global Value Chains, Local Collective Action and
Corporate Social Responsibility: a Review of
Empirical Evidence
Peter Lund-Thomsen1* and Khalid Nadvi2
1

Centre for Business and Development Studies, Centre for Corporate Social Responsibility, Copenhagen Business School, Denmark
2
Institute for Development Policy and Management, School of Environment and Development, University of Manchester, Manchester, UK
ABSTRACT
A key debate in the corporate social responsibility (CSR) literature is the tension between global pressures and local responses. Developing country suppliers often grumble that CSR compliance adds costs. Yet, local collective action, articulated through industry associations, can potentially reduce costs and promote local embeddedness of CSR initiatives. Through case study analysis, this paper considers how demands for CSR compliance prompted collective action responses in selected developing country export industries. We argue that differences in collective responses can be partially explained by how local export industries are inserted into global value chains. We distinguish between ‘highly visible’ value chains, led by internationally well known brands as lead firms, and relatively ‘less visible’ chains, where external CSR pressures come from a variety of sources, including less dominant lead firms, international/national regulatory frameworks and national media. This differentiation suggests a possible trade-off between the independence and the embeddedness of collective CSR initiatives. Copyright © 2010 John Wiley & Sons, Ltd and ERP Environment.

Received 6 February 2009; revised 7 July 2009; accepted 16 November 2009 Keywords: global value chains; collective action; industrial associations; industrial clusters; corporate social responsibility; developing countries

Introduction

A

N IMPORTANT TREND IN THE LITERATURE ON CORPORATE SOCIAL RESPONSIBILITY (CSR) AND INTERNATIONAL development is the focus on how small and medium-sized enterprises (SMEs) in the developing world are increasingly confronted with pressures to comply with international labour standards and CSR norms as a pre-condition to access developed world markets. Proponents of CSR codes emphasize that compliance can improve business processes, increase transparency in global supply chain operations and ratchet up social * Correspondence to: Peter Lund-Thomsen, Associate Professor, Centre for Business and Development Studies, Centre for Corporate Social Responsibility, Copenhagen Business School, Porcelænshaven 18A, 2000 F, Denmark. E-mail: [email protected] Copyright © 2010 John Wiley & Sons, Ltd and ERP Environment

2

P. Lund-Thomsen and K. Nadvi

and environmental standards in the developing world (Jenkins et al., 2002). Yet, these codes, which are usually based upon internationally agreed labour standards, are also criticized for being formulated in corporate headquarters in Europe or North America without any significant input from the intended beneficiaries, suppliers and workers, in the Global South (De Neve, 2009). Individual global brands insist that their suppliers follow their particular codes of conduct. This often results in local producers facing multiple, costly, and at times contradictory, CSR requirements and audits (Lund-Thomsen, 2008). Consequently, there have been moves towards greater convergence in CSR codes within and across industries (Nadvi, 2008). However, it is unsurprising that many developing country producers feel little ownership for the CSR standards that their Northern buyers press upon them. This raises doubts about the long-term sustainability of social compliance, especially when sustained pressure from international buyers is absent (Barrientos, 2008). In the context of the debate on global pressures and local responses around...

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