Buyer Power and Supplier Motivation for Code of Conduct Compliance: A Global Apparel Industry Perspective

The prevalence of sub-standard working conditions and labor exploitation is reported globally in the apparel industry. Although code of conduct (CoC) policies is in place, the buyer-driven and the top-down nature of social compliance management system rendered CoC policies ineffective in regulating suppliers’ compliance behavior. There is a limited understanding on how buyer-supplier interact, and what motivates or limits suppliers’ ability to comply with social standards. To fill this gap, a meta-analysis of literature was conducted to identify potential drivers or restrictors for suppliers to engage in CoC compliance management. A conceptual framework of buyer-supplier compliance-influencing model emerged, indicating the impact of buyers’ hard and soft powers on supplier intrinsic and extrinsic motivations. An understanding of buyer-supplier interaction process is valuable in gaining a deeper insight on how buyers’ can utilize different powers to promote efficient integration of compliance policies at suppliers firms, while balancing effects of the power imbalance.