Richard M. Locke

Does Monitoring Improve Labor Standards?: Lessons from Nike

Using a unique data set based on factory audits of working conditions in over 800 of Nikes suppliers across 51 countries over the years 1998–2005, the authors explore whether monitoring for compliance with corporate codes of conduct—currently the principal way both global corporations and labor rights non-governmental organizations (NGOs) address poor working conditions in global supply chain factories—achieved remediation, as indicated by improved working conditions and stepped-up enforcement of labor rights. Despite substantial efforts and investments by Nike and its staff to improve working conditions among its suppliers, monitoring alone appears to have produced only limited results. However, when monitoring efforts were combined with other interventions focused on tackling some of the root causes of poor working conditions—in particular, by enabling suppliers to better schedule their work and to improve quality and efficiency—working conditions seem to have improved considerably.

Employment relations in a changing world economy

To address contemporary issues, industrial relations as a field of study will have to take an increasingly international and comparative dimension. Accordingly, Employment Relations in a Changing World Economy looks at the critical role employment relations play in firm performance and industry competitiveness worldwide. The essays employ a common framework to examine changes in the employment practices of eleven OECD (Organization for Economic Cooperation and Development) countries: the United States, the United Kingdom, Canada, France, Germany, Italy, Spain, Norway, Sweden, Austria, and Japan. They constitute the first phase in a large ongoing project at the Center for Industrial Performance at MIT to update our understanding of comparative industrial relations and human resource policies. The authors, scholars in economics, political science, sociology, industrial relations and law, first identify a representative set of employment practices and then look at the outcomes of those practices and the changes they are undergoing across different national settings. By collaborating, the contributors seek to clarify the dynamics of employment relations across the world today, and to set the terms of reference for a new generation of international-comparative employment research.

Complements or Substitutes? Private Codes, State Regulation and the Enforcement of Labour Standards in Global Supply Chains

Recent research on regulation and governance suggests that a mixture of public and private interventions is necessary to improve working conditions and environmental standards within global supply chains. Yet less attention has been directed to how these different forms of regulation interact in practice. The form of these interactions is investigated through a contextualized comparison of suppliers producing for Hewlett-Packard, one of the world’s leading global electronics firms. Using a unique dataset describing Hewlett-Packard’s supplier audits over time, coupled with qualitative fieldwork at a matched pair of suppliers in Mexico and the Czech Republic, this study shows how private and public regulation can interact in different ways — sometimes as complements; other times as substitutes — depending upon both the national contexts and the specific issues being addressed. Results from our analysis show that private interventions do not exist within a vacuum, but rather these efforts to enforce labour and environmental standards are affected by state and non-governmental actors.

THE DEMISE OF THE NATIONAL UNION IN ITALY: LESSONS FOR COMPARATIVE INDUSTRIAL RELATIONS THEORY

Using data collected during field research in Italy on the reorganization of the auto industry, the author analyzes recent changes in Italian industrial relations. Based on this case study, he argues for a new approach to comparative industrial relations research and theory. Instead of treating national systems as the basic unit of analysis and searching for macro-institutional features as the key dimensions to use in constructing comparative typologies of industrial relations systems, the author develops an approach focusing on micro-level developments and the politics of strategic choice to explain variation within nations. Two factors appear to be crucial in explaining this variation: local socioeconomic conditions that shape the strategies of unions and management in firms undergoing adjustment, and the choices unions make in reallocating responsibilities between local and national structures.

The Promise and Perils of Private Voluntary Regulation: Labor Standards and Work Organization in Two Mexican Garment Factories

What role can private voluntary regulation play in improving labor standards and working conditions in global supply chain factories? How does this system relate to and interact with other systems of labor regulation and work organization? This paper seeks to address these questions through a structured comparison of two factories supplying Nike, the world’s largest athletic footwear and apparel company. These two factories have many similarities - both are in Mexico, both are in the apparel industry, both produce more or less the same products for Nike (and other brands) and both are subject to the same code of conduct. On the surface, both factories appear to have similar employment (i.e., recruitment, training, remuneration) practices and they receive comparable scores when audited by Nike’s compliance staff. However, underlying (and somewhat obscured by) these apparent similarities, significant differences in actual labor conditions exist between these two factories. What drives these differences in working conditions? What does this imply for traditional systems of monitoring and codes of conduct? Field research conducted at these two factories reveals that beneath the code of conduct and various monitoring efforts aimed at enforcing it, workplace conditions and labor standards are shaped by very different patterns of work organization and human resource management policies.

Production goes global, compliance stays local: Private regulation in the global electronics industry

Poor working conditions in global supply chains have led to private initiatives that seek to regulate labor practices in developing countries. But how effective are these regulatory programs? We investigate the effects of transnational private regulation by studying Hewlett-Packards (HP) supplier responsibility program. Using analysis of factory audits, interviews with buyer and supplier management, and field research at production facilities across seven countries, we find that national context – not repeated audits, capability building, or supply chain power – is the key predictor of workplace compliance. Quantitative analysis shows that factories in China are markedly less compliant than those in countries with stronger civil society and regulatory institutions. Comparative field research then illustrates how these local institutions complement transnational private regulation. Although these findings imply limits to private regulation in institutionally poor settings, they also highlight opportunities for productive linkages between transnational actors and local state and society.

Parallel Paths to Enforcement: Private Compliance, Public Regulation, and Labor Standards in the Brazilian Sugar Sector

In recent years, global corporations and national governments have been enacting a growing number of codes of conduct and public regulations to combat dangerous and degrading work conditions in global supply chains. At the receiving end of this activity, local producers must contend with multiple regulatory regimes, but it is unclear how these regimes interact and what results, if any, they produce. This article examines this dynamic in the sugar sector in Brazil. It finds that although private and public agents rarely communicate, let alone coordinate with one another, they nevertheless reinforce each other’s actions. Public regulators use their legal powers to outlaw extreme forms of outsourcing. Private auditors use the trust they command as company insiders to instigate a process of workplace transformation that facilitates compliance. Together, their parallel actions block the low road and guide targeted firms to a higher road in which improved labor standards are not only possible but even desirable.

Beyond Corporate Codes of Conduct: Work Organization and Labor Standards in Two Mexican Garment Factories

This paper presents a matched pair case study of two factories supplying Nike, the worlds largest athletic footwear and apparel company. These two factories have many similarities - both are in Mexico, both are in the apparel industry, both produce more or less the same products for Nike (and other brands) and both are subject to the same code of conduct. On the surface, both factories appear to have similar employment (i.e., recruitment, training, remuneration) practices and they receive comparable scores when audited by Nikes compliance staff. However, underlying (and somewhat obscured by) these apparent similarities, significant differences in actual labor conditions exist between these two factories. What drives these differences in working conditions? What does this imply for traditional systems of monitoring and codes of conduct? Field research conducted at these two factories reveals that beyond the code of conduct and various monitoring efforts aimed at enforcing it, workplace conditions and labor standards are shaped by very different patterns of work organization and human resource management policies.

Extended Networks: A Vision for the Next Generation Unions

Union membership and collective bargaining coverage have declined dramatically in the U.S. to the point where there is a serious question of whether unions can now, or in the future, serve the functions American workers and society expect of them. Yet, most of us who are grounded in the values and traditions of the field of industrial relations continue to believe in the need for and value of unions. So do 75 per cent of the American public2 and at least some thoughtful leaders in the business community.3 History tells us, however, that unions are only successful when they adapt to and match up well with the structure of the economy, employer organisational forms, and the preferences and needs of the work-force. Given the significant changes in these features of the economy and society, it is obvious that unions have a tall order in store. This paper develops a view of what we believe American unions need to do if they are to be significant players in today’s and tomorrow’s labour markets and economy. We propose that the next generation unions4 view and position themselves as networked institutions that enroll, represent, and provide services to workers on a continuous life-long basis beginning when they are in school and about to enter the labour market, throughout their careers, and into their retirement years.5 This view of unions is part of a larger set of institutional changes we see as necessary for updating America’s labour market institutions and policies to catch up with changes in the workforce, nature of work and economy.

Looking in the Wrong Places?: Labor Standards and Upstream Business Practices in the Global Electronics Industry

Despite decades of debate and efforts to improve global labor standards, multiple problems still persist. Whether arguing for a more active role for the state, persuading firms to adopt codes of conduct, improving monitoring and sanctioning processes or seeking a higher degree of commitment between supply chain actors, scholars still lack an adequate explanation for why labor problems do not show improvement. Existing theories, while they will help, are not sufficient to solve this issue because they are focused on the production side of markets — the result both of an intellectual and policy bias towards production and the tendency to look for solutions where problems occur. Using a case study of Hewlett-Packard’s (HP) supply chain, qualitative and quantitative data from field visits to plants in South East Asia and a unique dataset of HP’s code of conduct audits, we demonstrate that even under the most-likely conditions that favor previous theories of labor standards, code of conduct violations, in particular excess working hours, exhibit widespread persistence. Having explained this, we demonstrate that this persistence is the product of a set of policies and practices designed and implemented upstream by global buyers and their lead suppliers