Elke Schüssler, a junior professor in the Management Department at Freie Universität Berlin, is coordinating an interdisciplinary study that is the first to incorporate the perspectives of all of the stakeholders involved in the production process in the textile industry. The overarching question: What preconditions do the political sphere, society at large, and the business sector have to create in order to achieve lasting improvements in labor conditions in countries where production takes place?
The Rana Plaza collapse brought an abrupt recollection of the conditions under which fashion is produced in developing countries. But many people complain that these kinds of disasters take place time and again without anything changing. At times, though, the shock felt after these kinds of accidents also spurs a desire for change.
What would have to change about production standards in the global value chain in the apparel industry is the subject of inquiry for an international research project called “Changes in the Governance of Garment Global Production Networks: Lead Firm, Supplier and Institutional Responses to the Rana Plaza Disaster.” The project is receiving 800,000 euros in funding under the “Europe and Global Challenges” program, which is jointly sponsored by the Volkswagen Foundation, the Wellcome Trust, and Riksbankens Jubileumsfond.
The international project team consists of scholars from the London School of Economics (UK), the University of Gothenburg (Sweden), the University of New South Wales (Australia), and BRAC University (Bangladesh). It is headed by Junior Professor Elke Schüssler, together with Professor Stephen Frenkel of the UNSW Business School. Freie Universität Berlin coordinates and administers the project.
Illuminating the Production Tunnel
The “value chain” – it’s a nice, tidy phrase. Every link has its place, creating a solid connection to the next. In reality, though, the middle of the chain typically disappears into a long, dark tunnel, where it branches out in various directions. There might be as many as 140 suppliers involved in producing a shirt, for example. With structures this complex, who wants to guarantee that the work is always performed according to the client’s standards?
“In some cases, Western firms lack important information about actual production conditions, and it is often unclear if they are unable or unwilling to gather that information,” Schüssler says. “On top of that, some factories in Bangladesh make garments for companies from ten different countries. Every company has its own requirements. That makes it hard for the suppliers to organize their production activities. And then the question remains, how much of the Western production standards actually filters down to the workers?”
Determining Overall Conditions
The scholars working on the project are tackling this issue by using qualitative and quantitative research tools from the fields of economics and social sciences at both ends of the value chain. Or, in other words: They are shining bright lights down the tunnel from both sides to illuminate where it leads.
First, they are studying the tunnel’s first opening, namely the Western firms’ practices and overall conditions and the question of how much they have changed since the Rana Plaza collapse. In Germany, for example, an organization called the Partnership for Sustainable Textiles was formed last October when 140 companies, non-governmental organizations, unions and politicians joined forces.
The partnership’s aim is to establish shared labor and environmental protection standards and ensure greater transparency across supply chains. A transnational coalition of unions also signed an agreement on fire and building safety in Bangladesh with 190 textile firms, most of them from Europe. And 26 other companies, primarily from the U.S., also joined forces in a comparable alliance.
Who Is Guided by Which Standards?
The scholars are studying the stance taken by Western firms. “Some are taking the initiative and making changes in workflows and processes, regardless of whether they join one of these alliances. We are especially interested in the issue of what standards of corporate social responsibility (CSR) guide these companies, and whether they actually take action and change anything about their supplier structure,” Schüssler says.
In one pilot study, Schüssler worked with two Australian colleagues to compare German and Australian companies first. The study showed that willingness to change depends on more than just where a firm is based; the company’s size and market segment are also crucial.
Studying Major Players
The participants in an extended comparison between Germany, Australia, Sweden, and the UK have not yet been identified. But Schüssler already has some ideas about what she would want: “H&M is a big company with professional CSR that we would like to study.” There are only a handful of what she calls “really big players.” After that, “it quickly moves down to the medium-sized segment. We subdivide the companies into four categories according to their size and sales and distribution channels,” she explains.
The goal is for the team to ask managers from the fields of purchasing and CSR about their production standards and processes, using an extensive list of questions. This is to take place at 20 companies in each of the four countries, with the companies’ information being anonymized for the study. The scholars’ aim in this process is to understand the mechanisms that different companies use to shape and manage change in their processes. The scholars will also interview experts from NGOs, unions, associations, and political institutions.
Translating Results to Other Countries and Industries
On the other side of the value chain, in Bangladesh, the study is examining how the changes made in the West affect the situation in the country where production takes place, and how those changes are viewed by local stakeholders, such as union members and politicians, and by factory managers.
In addition, about 2,000 factory workers are being asked about how Rana Plaza has affected their daily working conditions. To do this, the interviewers are traveling to the workers’ homes, where they are protected from pressure by their employers. Schüssler says, “Most of the workers at the garment factories are women. Their situation is highly ambivalent. For some of them, their work is an act of liberation, even if the working conditions are poor. That means demanding that the garment companies leave the country would be no solution.”
The team of 14 scholars plans to have moved closer to a solution to this complex issue by 2018, when the plan is to translate their findings based on the response to Rana Plaza to other countries and industries as well. The scholars plan to make recommendations in specialized publications and beyond, including taking their results straight to those involved in this field in politics and the business sector. After all, having more effective controls on globalized markets benefits everyone in the end.