Drivers of sub-supplier social sustainability compliance: An emerging economy perspective

Purpose: Tragic incidents like the Rana Plaza building collapse call into question the value and effectiveness of supplier codes of conduct (SCC) used in multi-tier supply chains. This paper investigates the drivers of sub-supplier social sustainability compliance from the perspective of suppliers that adopt a double agency role by complying with buyer-imposed SCC while managing sub-supplier compliance on behalf of the buyer. Design/Methodology: This research adopts a sequential, mixed-methods approach. The qualitative phase develops a conceptual model with the aid of the extant literature and semi-structured interviews with 24 senior manufacturing professionals. The quantitative phase uses hierarchical regression analysis to test the conceptual model using survey data from 159 apparel suppliers based in India. Findings: The findings reveal that sub-supplier compliance is positively impacted by effective buyer-supplier governance and by the focal supplier having a strategic partnership with the sub-supplier. Conversely, price pressure on sub-suppliers adversely impacts their compliance, while the institutional pressure on them to comply is generally ineffective. Research Limitations: The context of the study is limited to the apparel manufacturing industry in India. Practical implications: To improve SCC compliance rates, buyers and focal suppliers should actively develop strategic partnerships with selected upstream supply chain actors; should set a reasonable price across the supply chain; and, should include specific sub-supplier compliance requirements in the supply contract. The findings also suggest the need to develop social sustainability protocols that are cognisant of regional contexts. Originality/Value: Given the absence of prior research on SCC implementation by sub-suppliers, this study represents a pioneering empirical study into such multi-tier sourcing arrangements. It provides strong support that sub-supplier governance arrangements differ from those typically found in the focal supplier layer. It also provides empirical evidence of the critical factors that encourage sub-supplier compliance within the apparel industry of an emerging economy.