Articlehybrid2019

Emerging Roles of Lead Buyer Governance for Sustainability Across Global Production Networks

75 citations0/0 files storedJournal of Business Ethics

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Global trade, sustainability, and social impact Sustainable Supply Chain Management Software Engineering and Design Patterns

Abstract

Global production networks (GPNs) connect multiple producers involved in fragmented manufacturing processes. Major brands and retailers, considered as lead firms, are under increasing pressure to ensure products made through GPNs are produced sustainably. Theories of governance developed to understand dynamics in outsourced production can provide insight into this issue. However, these theories and related empirical research have often focused on relationships between lead firms and upper-tier suppliers. When manufacturing involves multiple fragmented stages, understanding the role of lead firms becomes more difficult. This article considers new governance roles that lead firms, as buyers, are playing when attempting to promote sustainable practices across all stages of production for buyer-driven industries. The focus is exploring the nature of new governance approaches which lead firms have developed in order to address diverse sustainability challenges found within GPNs, particularly related to lower-tier suppliers. These approaches can involve lead firms working through vertical buyer–seller links or developing new horizontal relationships, which link lead firms with lower-tier suppliers and governance processes in these suppliers’ local productive systems. The findings draw from field research examining how top UK garment retailers provide governance to producers involved in creating cotton garments in India and a review of publicised policies and practices of these retailers related to promoting sustainable production. Five types of governance mechanisms that can involve vertical or horizontal links are identified. Considering the growth of new governance relationships expands previous conceptions of the roles of lead firm governance.

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References

1937The Nature of the Firm 1979Transaction-Cost Economics: The Governance of Contractual Relations 1998The Relational View: Cooperative Strategy and Sources of Interorganizational Competitive Advantage 2017Economic and Political Weekly 2005The governance of global value chains 1981The Economics of Organization: The Transaction Cost Approach 2008A framework of sustainable supply chain management: moving toward new theory 1973Free Competition and the Optimal Amount of Fraud

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