Unveiling the Black Box in Retail Firms’ Supply Chain Labor Standards Performance: A Theory of Supply Chain Labor Compliance Integration

Audio summary

Multinational retail brands and firms often struggle to ensure that their global suppliers comply with labor standards due to conflicting demands from their own internal departments, leading to limited success in corporate social responsibility initiatives. To overcome these challenges, multinational firms must minimize cross-functional tensions related to human capital, identities, processes, and goals within their firm. This "supply chain labor compliance integration" (SCLC integration) is achieved through specific organizational practices such as selective hiring for social responsibility knowledge, extensive labor compliance training, appointing pluralistic leaders, establishing cross-functional responsible sourcing teams, and implementing shared information systems and performance-based rewards. Higher SCLC integration enables multinational retail firms to achieve better supply chain labor standards performance by fostering internal efficiencies in compliance innovation and enhancing collaboration with external stakeholders. Ultimately, this approach helps multinational retail firms build more resilient and adaptive responsible sourcing strategies, allowing them to balance financial pursuits with upholding labor standards.

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Jayasinghe, M., & Cao, Y. (2024). Unveiling the Black Box in Retail Firms’ Supply Chain Labor Standards Performance: A Theory of Supply Chain Labor Compliance Integration. Business & Society, 64(1), 87-125. https://doi.org/10.1177/00076503241235311 (Original work published 2025)