On Wednesday, June 5th, CREATe.org hosted MIT’s Richard Locke for a discussion on his recently released book The Promises and Limits of Private Power: Promoting Labor Standards in a Global Economy. The book outlines the key findings from Professor Locke’s extensive research on company compliance and audit reports, as well as field observations and interviews in factories from Mexico to Bangladesh.
Professor Locke outlined several key findings from his book.
He found that most companies researched followed a traditional compliance pattern that included a supplier code of conduct with ongoing monitoring and auditing. However, these audits did not lead to systemic institutional change. There is anecdotal evidence that some auditors develop relationships with the suppliers and then engage on a deeper level to help them build management capabilities. But while these individuals became agents of innovation, their reach was limited, technical solutions were often insufficient, and their efforts did not lead to widespread systemic change.
He advocated for the “capability-building” approach, based on the assumption that factory managers merely lacked operational management expertise, and advised dialogue between buyers and suppliers to promote an economy that is “more efficient and more just.”
Although the key findings from Professor Locke’s research show there is much work to be done, he ended on a positive note by suggesting that companies that engage with their suppliers and help to build capabilities, whether it’s in labor practices, intellectual property or anti-corruption, can improve the culture of compliance. As the old adage says, “A rising tide lifts all boats.”
Locke’s research was recently featured in a Boston Review forum titled ‘Can Global Brands Create Just Supply Chains.’ CREATe.org’s Pamela Passman provided a response to the piece, which discusses how CREATe.org has adopted best practices identified in this research and other sources to build capacity by working collaboratively with supply chain partners.