Accounting for the Gaps in Labour Standard Compliance: The Role of Reputation-Conscious Buyers in the Cambodian Garment Industry
Key Insights for Managers
Do Cambodian garment factories serving reputation-conscious buyers exhibit better working conditions than factories serving other buyers? This quantitative study by Chikako Oka finds that they do, by showing that such compliance is significantly higher among factories that supply at least one buyer participating in Better Factories Cambodia, the Fair Labor Association, and/or the Ethical Trading Initiative.
Drawing on 61 interviews with buyers, factory managers, labor activists, and government officials, the study concludes that buyers’ reputation concerns lead them to regulate suppliers’ compliance with labor standards in two ways. Such buyers regulate suppliers preemptively by attending to working conditions when they select suppliers before placing orders, and they regulate them through remediation by monitoring and enforcing working condition standards after they have placed orders.