Understanding the Emergence of Supply Chain Governance Institutions in Liberal Market Economies and Coordinated Market Economies

• In Event: 4366 - Section on Global and Transnational Sociology Refereed Roundtables (1 hour)
  In Refereed Roundtable 60min: 12. Markets and Labor in the Global Economy

Abstract

Pronounced differences between national corporate social responsibility (CSR) institutions persist, but existing explanations encounter awkward problems with outliers (Matten and Moon, 2008; Gjølberg, 2009; Bair and Palpacuer, 2009). Seeking to develop theory in this area, we analyse two supply chain governance institutions that originated in the UK and Germany: the Ethical Trading Initiative (ETI) and the Business Social Compliance Initiative (BSCI) respectively. Both institutions present paradoxes. For example, Bair and Palpacuer (2012) argue coordinated European economies tend to have labour-inclusive multistakeholder initiatives (MSIs). But the UK – a liberal market economy with adversarial industrial relations – houses the ETI, a significant labour-inclusive MSI. Meanwhile, in Germany – a coordinated market economy with well-developed social dialogue – the BSCI, a unitarist organisation with a credibility deficit among unions and NGOs (Bair and Palpacuer, 2012; Egels-Zandén and Wahlqvist, 2007), grew to be a dominant European CSR institution. Accordingly, Gjølberg (2009) argues that the “social dialogue” (“corporatist”) argument cannot be sustained, with countries strong on corporatism, such as Germany, being weak on CSR. Fransen (2013) conjectures that weaker campaigning pressure for multi-stakeholder governance on global solidarity issues in Germany may be the “flipside” of a stronger corporatist tradition of bargaining about domestic issues (see also Kinderman, 2008) and calls for more research to understand such surprising patterns.
Drawing on interviews and documentary material, we compare the emergence of the ETI and BSCI. We, first, explain how these two outliers emerged in contexts that would have predicted the emergence of less (in the case of the UK) or more (in the case of Germany) stakeholder inclusion. Secondly, we show how the formation of these organizations has path dependent impacts on the further development of the CSR environment through an analysis of the expectations these institutions have of their members and their outside interactions.

Authors

• Sarah Ashwin, London School of Economics

• Rachel Alexander, London School of Economics

• Niklas Egels Zandén, Department of Business Administration, University of Gothenburg

• Nora Lohmeyer, Freie Universität Berlin