Advertisement

Journal of Business Ethics

, Volume 81, Issue 3, pp 513–529 | Cite as

Impacts of Corporate Code of Conduct on Labor Standards: A Case Study of Reebok’s Athletic Footwear Supplier Factory in China

  • Xiaomin YuEmail author
Article

Abstract

This study examines the social impacts of labor-related corporate social responsibility (CSR) policies or corporate codes of conduct on upholding labor standards through a case study of CSR discourses and codes implementation of Reebok – a leading branded company enjoying a high-profiled image for its human rights achievement – in a large Taiwanese-invested athletic footwear factory located in South China. I find although implementation of Reebok labor-related codes has resulted in a “race to ethical and legal minimum” labor standards when notoriously inhumane and seriously illegal labor rights abuses were curbed, Chinese workers were forced to work harder and faster but, earned less payment and the employee-elected trade union installed through codes implementation operated more like a “company union” rather than an autonomous workers’ organization representing worker’ interests. In order to explain the paradoxical effects of Reebok labor-related codes on labor standards, I argue the result is determined by both structural forces and agency-related factors embedded in industrial, national and local contexts. To put it shortly, I find the effectiveness of Reebok labor-related codes is constrained not only by unsolved tension between Reebok’s impetus for profit maximization and commitment to workers’ human rights, but also by hard-nosed competition realities at marketplace, and Chinese government’s insufficient protection of labor rights. Despite drawing merely from a single case study, these findings illuminate key determinants inhibiting the effectiveness of labor-related CSR policies or codes in upholding labor standards, and hence two possible way-outs of the deadlock: (1) sharing cost for improving labor standards among key players in global supply chain; and (2) combining regulatory power of voluntary codes and compulsory state legislations.

Keywords

athletic footwear industry China corporate codes of conduct corporate social responsibility labor standards Reebok trade union wages 

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

References

  1. Armbruster-Sandoval R. (2005) Globalization and Cross-border Labor Solidarity in the Americas: the Anti-sweatshop Movement and the Struggle for Social Justice. Routledge, New YorkGoogle Scholar
  2. Berman S. L., Wicks A. C., Kotha S., Jones T. M. (1999) Does Stakeholder Orientation Matter? The Relationship between Stakeholder Management Models and Firm Financial Performance. Academy of Management Journal 42:488–506CrossRefGoogle Scholar
  3. Chen F. (2004) Legal Mobilization by Trade Unions: The Case of Shanghai. The China Journal 52:27–45CrossRefGoogle Scholar
  4. Clean Clothes Campaign: 2004, ‹Sportswear Industry Data and Company Profiles: Background Information for the Play Fair at the Olympics Campaign’, See http://www.cleanclothes.org/publications/olympic-profiles.htm
  5. Connor T.: 2001, ‹Still Waiting for Nike to Do it’, See http://www.globalexchange.org/campaigns/sweatshops/ nike/stillwaiting.html
  6. Diller J. (1999) A Social Conscience in the Global Marketplace? Labour Dimensions of Codes of Conduct, Social Labelling and Investor Initiatives. International Labour Review 138(2):99–129CrossRefGoogle Scholar
  7. Ding D. Z., Goodall K., Warner M. (2002) The Impact of Economic Reform on the Role of Trade Unions in Chinese Enterprises. International Journal of Human Resource Management 13:431–449CrossRefGoogle Scholar
  8. Drumwright M. E., Murphy P. E. (2001) Corporate Societal Marketing. In: Bloom P. N., Gundlach G. T. (eds) Handbook of Marketing and Society. Sage, Thousand Oaks, Calif., pp. 163–183Google Scholar
  9. Elliott K. A., Freeman R. B. (2003) Can labor Standards Improve under Globalization?. Institute for International Economics, Washington, DCGoogle Scholar
  10. Esbenshade J. (2004) Codes of Conduct: Challenges and Opportunities for Workers’ Rights. Social Justice 31(3):40–59Google Scholar
  11. Frenkel S. (2001) Globalization, Athletic Footwear Commodity Chains and Employment Relations in China. Organization Studies 22(4):531–562CrossRefGoogle Scholar
  12. Frenkel S., Kim S. (2004) Corporate Codes of Labor Practice and Employment Relations in Sport Shoe Contractor Factories in South Korea. Asia Pacific Journal of Human Resources 42(1):6–31CrossRefGoogle Scholar
  13. Frundt H. J. (2004) Unions Wrestle with Corporate Codes of Conduct. Working USA 7(4):36–53Google Scholar
  14. Gallagher M. E. (2004) Time is Money, Efficiency is Life: The Transformation of Labor Relations in China. Studies in Comparative International Development 39:11–44CrossRefGoogle Scholar
  15. Godfrey P. C., Hatch N. W. (2007) Researching Corporate Social Responsibility: An Agenda for the 21st Century. Journal of Business Ethics 70:87–98CrossRefGoogle Scholar
  16. Haisley T. (2003) AAFA Salutes Firms for Social Responsibility. Apparel 44:5–6Google Scholar
  17. Jones P., Comfort D., Hillier D. (2005) Corporate Social Responsibility as a Means of Marketing to and Communicating with Customers Within Stores: A Case Study of UK Food Retailers. Management Research News 28(10):47–56CrossRefGoogle Scholar
  18. Lantos G. P. (2001) The Boundaries of Strategic Corporate Social Responsibility. The Journal of Consumer Marketing 18(7):595–638CrossRefGoogle Scholar
  19. Lantos G. P. (2002) The Ethicality of Altruistic Corporate Social Responsibility. The Journal of Consumer Marketing 19(2/3):205–208CrossRefGoogle Scholar
  20. Mahon J., Wartick S. (2003) Dealing with Stakeholders: How reputation, Credibility and Framing Influence the Game. Corporate Reputation Review 6(1):19–35CrossRefGoogle Scholar
  21. Margolis J. D., Walsh J. P. (2001) People and Profits? The Search for a Link between a Company’s Social and Financial Performance. Erlbaum, Mahwah, NJGoogle Scholar
  22. Marom I. Y. (2006) Toward a Unified Theory of the CSP–CFP Link. Journal of Business Ethics 67:191–200CrossRefGoogle Scholar
  23. McAlister D. T., Ferrell L. (2002) The Role of Strategic Philanthropy in Marketing Strategy. European Journal of Marketing 36(5/6):689–706CrossRefGoogle Scholar
  24. Orlitzky M., Schmidt F. L., Rynes S. L. (2003) Corporate Social and Financial Performance: A Meta-Analysis. Organization Studies 24(3):403–441CrossRefGoogle Scholar
  25. O’Rourke D. (2003) Outsourcing Regulation: Analyzing Nongovernmental Systems of Labor Standards and Monitoring. Policy Studies Journal 31(1):1–29CrossRefGoogle Scholar
  26. Prieto-Carrón M. (2004) Is There Anyone Listening? Women Workers in Factories in Central America, and Corporate Codes of Conduct. Development 47(3):101–105CrossRefGoogle Scholar
  27. Pun N. (2005) Global Production, Company Codes of conduct, and Labor Conditions in China: A Case Study of Two Factories. The China Journal 54:101–124Google Scholar
  28. Rodriguez-Garavito C. A. (2005) Global Governance and Labor Rights: Codes of Conduct and Anti-Sweatshop Struggles in Global Apparel Factories in Mexico and Guatemala. Politics & Society 33(2):203–233CrossRefGoogle Scholar
  29. Ross R. (2006) A Tale of Two Factories: Successful Resistance to Sweatshops and the Limits of Firefighting. Labor Studies Journal 30(4):65–85CrossRefGoogle Scholar
  30. Sen S., Bhattacharya C. B. (2001) Does Doing Good Always Lead to Doing Better? Consumer Reactions to Corporate Social Responsibility. Journal of Marketing Research 38(2):225–243CrossRefGoogle Scholar
  31. Sethi S. P. (2003) Setting Global Standards: Guidelines for Creating Codes of Conduct in Multinational Corporations. John Wiley & Sons, Hoboken, N.JGoogle Scholar
  32. Siltaoja M. E. (2006) Value Priorities as Combining Core Factors Between CSR and Reputation –A Qualitative Study. Journal of Business Ethics 68:91–111CrossRefGoogle Scholar
  33. Sum N. L., Pun N. (2005) Globalization and Paradoxes of Ethical Transnational Production: Code of Conduct in a Chinese Workplace. Competition & Change 9(2):181–200CrossRefGoogle Scholar
  34. Timothy B. W. (2002) ‹Learn from Daqing’: More Dark Clouds for Workers in State-owned Enterprises. Journal of Contemporary China 11(33):721–734CrossRefGoogle Scholar
  35. Tsogas G. (2001) Labor Regulation in a Global Economy. ME Sharpe, Armonk, NYGoogle Scholar
  36. Tulder R. V., Kolk A. (2001) Multinationality and Corporate Ethics: Codes of Conduct in the Sporting Goods Industry. Journal of International Business Studies 32(2):267–283CrossRefGoogle Scholar
  37. Wang H. Z. (2005) Asian Transnational Corporations and Labor Rights: Vietnamese Trade Unions in Taiwan-Invested Companies. Journal of Business Ethics 56(1):43–53CrossRefGoogle Scholar
  38. Zhu Y., Warner M. (2005) Changing Chinese Employment Relations since WTO Accession. Personnel Review 34(3):354–370CrossRefGoogle Scholar
  39. Zumbansen P. (2006) The Parallel Worlds of Corporate Governance and Labor Law. Indiana Journal of Global Legal Studies 13(1):261–312CrossRefGoogle Scholar

Copyright information

© Springer Science+Business Media B.V. 2007

Authors and Affiliations

  1. 1.Hong Kong University of Science and TechnologyHong KongChina

Personalised recommendations