Supply Chain Governance for Social Sustainability : A Study of the Ready-Made Garment Industry in Bangladesh

Abstract: This PhD thesis approaches the phenomenon of supply chain governance for social sustainability in the ready-made garment industry in Bangladesh. This research is based on a study of eight large multinational corporations (e.g. clothing brands and retailers) and their ready-made garment suppliers. The purpose of this research is to understand how supply chain governance mechanisms and governance structures improve social sustainability performance when stakeholders are engaged.The study identifies four main governance systems, namely, market-based, hierarchical controlbased, collaborative multi-stakeholder-based and relational cross-sectoral-based. These governance systems are employed in the supply chain by the multinational corporations in combination with different stakeholders, such as suppliers, multi-stakeholder-initiatives, and non-government organisations. The study focuses on the challenges faced by the multinational corporations to ensure social sustainability, whilst at the same time, incorporating suppliers’ viewpoints on the consequences of different governance systems for social sustainability.This research shows the choice of governance structures from market-based, hierarchy-based, collaboration-based and relational-based depend on the cost of managing relationships with the stakeholders and potential risks of governance in a given situation. An effective governance structure for a multinational corporation in a particular context is determined by how well the structure supports governance mechanisms to reduce associated transaction risks that results from potential opportunistic behaviour of the suppliers. In this research, it is argued that governance structure provides the platform for practicing a set of governance mechanisms.The study claims that social sustainability governance incorporates three mechanisms with separate outcomes: one consists of buyer-driven control-based mechanisms which include codes of conduct, supplier assessment and monitoring, and supplier training for regular social compliance; the second consists of multi-stakeholder-based governance mechanisms for structural compliance when unexpected problems occur, for example, building collapse, electrical and fire safety risks emerge; and the third comprises cross-sectoral governance mechanisms when the multinational corporations involve with non-government organisations for social development of the garment workers and community by facilitating drinking water, health-hygiene, education, and so on.This thesis contributes to the Sustainable Supply Chain Management literature by expanding knowledge of supply chain governance through bringing an understanding of governance mechanisms, governance structures and stakeholder engagements for social sustainability. As the demand for supply chain governance for social sustainability are growing, this thesis can help responsible corporate sourcing managers to develop a deeper understanding of how supply chain governance can affect social sustainability.