Socially Irresponsible Employment in Emerging-Market Manufacturers

Are socially irresponsible employment practices, such as abusive discipline and wage theft, systematically tied to manufacturing outcomes in emerging-market countries? Drawing on a stream of stakeholder theory that emphasizes economic interdependencies and insights from the fields of industrial relations and human resource management, we argue that working conditions within a firm are facets of a systemic approach to value creation and value appropriation. Some manufacturers operate “low road” systems that rest on harmful practices. Others operate “high road” systems in which the need to develop employees’ human capital deters socially irresponsible employment practices. To test the theory, we conduct a large-scale study of labor violations and manufacturing outcomes by analyzing data on over four thousand export-oriented small manufacturers in 48 emerging-market countries. The analysis demonstrates that socially irresponsible employment practices are associated with inferior firm-level manufacturing outcomes even after controlling for the effects of firm size, industry, product mix, production processes, host country, destination markets, and buyer mix. The theory and results suggest an opportunity for multinational corporations to improve corporate social performance in global value chains by encouraging their suppliers to transition to systems of value creation that rely on the development of worker human capital.

Complementarities between Operations and Occupational Health and Safety in Garments

There is an ongoing debate in the extant literature regarding whether the relationship between occupational health and safety (OHS) and operational practices is contradictory or complementary. However, previous research has focused on companies situated in developed and highly industrialized countries. We contribute to the debate by investigating the relationship between OHS and operational practices in 50 selected garment factories in the context of a developing country (Bangladesh). We investigated OHS and operational practices in a developing country because the institutional context and the industrial tradition are different from those in developed countries, and these factors are very likely to influence how companies invest in enhancing work conditions and improving operational practices. Indeed, the main contribution of this study is that, in contrast to findings from developed countries, our results indicate that both the maturity levels of OHS and operational practices and the complementarity between them depended on plant size. In particular, large plants had higher levels of maturity and were more likely to perform well in both OHS and operational practices than small and medium plants. Based on these findings, we emphasize that, to enhance work conditions and remain competitive, small and medium companies must embrace multi-stakeholder initiatives involving international buyers, local government, and international labor. Organizations can contribute to building the capabilities of suppliers and balance the pressure of cost reduction with investment in OHS improvement.

Climate-Friendly Ethics Prescribed by Top World Airlines: Empirical Evidence

The aviation industry contributes substantially to the global climate change, and, thus, airline companies need development of climate-friendly ethics. The content of the codes of conduct of 16 airline companies boasting either the greatest number of daily departures or the largest air fleet (or both) are analyzed. It is established that 25% of these companies prescribe climate-friendly behavior often focusing on emissions. Moreover, many other companies prescribe pro-environmental behavior. The situation seems to be promising, although improvements of the existing corporate ethical prescriptions are necessary. Despite its tentative character and certain limitations, this study permits putting the climate-friendly ethics of airlines on the international agenda. Practically, it is important to add climate-related notions to those codes of conduct where these do not exist and to use successful examples as ethical templates for the entire aviation industry.